claim is construed as a caremark claim that it would fail and that right correct ok so under the circumstances what is your best argument that this is not a caremark claim of simply that we should not lose sight of what care market is and what the caremark decision holds caremark addresses corporate director of liability for losses and officer and arguably officers there's one bankruptcy court decision that says let and that decision states that the caremark decision in applause is bat in may appl officers but it does not say you have any other contrary authority that senses then it's not applied officers no but it's the the issue is the what directors are charged with them with officers are charged with with caremark says is that if a board of directors sets up for cedar and sets up systems to assure that employees are not violating the law or regulations and officers are to be treated just like directors because there is no modern one circuit about that right well in in the in delaware what it what it is in that's the controlling law it says of both officers and directors have the officer of compliance he's supposed to be doing the things that implicate more activity but it but i what i want to be clear about is that this is not a caremark claim and i and i are there really want to get back to sufficient to distinguish this case from caremark case yes that what you would reverse to well yes in that in each charging allegation in which the word oversight is used in this is something that the defendants ignored and something respectfully the court below didn't focus on is is that along with oversight there's either an end in front of it or an end after  receiving that states it breach of duty of care claim which is different from a caremark breach of duty of loyalty clay and in a i just want to know before i go through th understand what you're saying or are you claiming that this is a duty of care kline absolutely it's stated as a breach of duty of care claim that's what it's called and that's what the the factual allegations in difference between a caremark claim as defined by care market self liability it's of the corporation for a loss by reason of a failure may be said to rise from an un considered a un considered failure of the board to act in circumstances in which do with tension would arguably have prevented the loss of help me with this is that understanding a duty of care claim always involves a business decision correct  not an individual thing to business decision it's it's a business decision or an action or inaction taken or a course of conduct that is irrational ok versus caremark where you can have an individual as opposed to a board acting in and you have to be a bad faith when you've said that won't happen here sell you're claiming that these nine allegations constitute they are not responsible to the corporation if for mere negligence it's a new thing they they are responsible for gross negligence gross negligence and what we have shown of what the facts show and what the allegations show which is not this considered liability that arise which caremark deals with and dealt with only on the corporate level because corporations know all day today but on the day to day level these defendants knew and especially cohen and liebowitz knew for a decade and they were warned every single at least every single year by their outside accountant that they were running at a negative  capital balance that they were robbing peter to pay paul that's amazon and we don't put them out well robbing peter to pay paul you sure do if if you're running a business and you're understand your point because as i understand that's when amazon didn't it wanted to grow and growing growing growing didn't care so much about the profit or i believe what is different between this and that because this is a company that that is selling services they tell a client that comes in deposit these loans and will buy this media for you for your time and then they take those funds and pay other bills they could grow revenue if they just grew revenues they were to rectify their financial condition is kind of lost isn't that more open and hope or slightly issue as opposed to a specific decision no i don't believe so let me ask you this does it delaware law applies is that right the director and the disney case would you say is the really best case on this issue of duty of care and directors or owners are not guarantors of corporate performance absent extraordinary circumstances individuals are simply not obligated for corporate debts right so as a practical matter in this case the directors and officers certainly mr levy which mr cohen who are also owners have every incentive to maintain profitability and avoid bankruptcy where they actually directors officers and alters they were your hand held all through those positions mr levy which was a was the majority owner mr cohen was a moral minority over mr myself had no ownership interest he was he was an officer or so in the delaware law which governs here the trustee has to do more than just allege that these officers and directors were negligent or even grossly negligent he's got to show bad faith and in the oversight of his will there is none of that i'm sorry to hear your honor i'm so i did didn't he stipulate before the trial court that there was no bad fa allegations they don't deal with oversight they're not they absolutely do your honor absolutely do all of the allegations in the complaint this is what the district court found the you know the judge went through the whole complaint pointed out  there were nine times when they use the term oversight to describe what the defendants had done that in even when they didn't use the word oversight what it effectively was was lack of oversight failure to get the right accounting systems involved failure to look at you know tax  look at profitability information so so it was all about oversight of your perspective what is the difference between a breach of the duty of care and the care markwell ition well a breach of the duty of care involves a specific business decision and that's exactly as as your honor pointed out when mr khan was arguing and i let me just read what they did with the disney court said about that it says that it said that  that a breach of the duty of care is a failure to consider all material information reasonably available in making business decisions and so of course that presupposes the existence of a business decision having been made in distinguishing between the duty of care and the oversight claims the caremark court said that that duty of care liability flows from a board decision that results in a loss because that decision was ill advised or negligent whereas a lack of oversight comes from considered in action how would you see what if you bet the single business decision right that's one thing well we have here is a question of c that or arguably we have here of course of conduct that striving in business into the ground and here the duty and your position is that the duty of oversight does not have there is no duty to do anything in that circumstance but if it's just a duty of oversight there is a duty of oversight and you know don't don't mistake us to say that the duty of oversight has no teeth yes it does if a board or member or or an officer fail or still fails to oversee difference well it does if there's no business decision then there's no duty of care liability if there if there's over it and the only possible thing there could be then would be the oversight no i this is the way they allege the case right they allege in the complaint an oversight no oversight no oversight and they said you know that this was you didn't look at tax returns you didn't you know you didn't look at profitability etc they didn't talk about any specific business decision that was made that led to any specific loss right so look at the good example of how that breaks down if you look at the disney case which is of the trust he relies on very heavily and it disney you know it was it was about the board's decision in that it offers the board's decision to give michael ovitz this  hundred thirty million dollar you know no fault severance agreement if he was terminated without cause right and so the question there was well that's a business decision you made you gave this guy a contract you promise to pay him a lot of money if he gets terminated for no cause and now we're going to pay honored thirty million dollars all right so so some so that business decision led to a specific loss and the question was there was that business decision did it you know did violate the duty of due care right and now contrast that to the to the to the discussion of in the stone case stone versus ritter which came out from the delaware supreme court a few months after the disney case and in the stone case the  said very clearly that because a showing of bad faith conduct in the sense described in disney its earlier decision and caremark is essential to establish director oversight liability the fiduciary duty violated by that conduct is the duty of loyalty if you have a violation the duty of loyalty that silver age to you got to have bad faith to make the claim that's the law and i ask you this clarification when i look at these nine allegations some of them involve a single individual since a business decision must be involved in connection with the duty of care can a single individual be liable for breaching the duty of care or does it require more than one officer in this case well i say each to do i suppose your honor that if if the officer or the person whose whose decision you're looking at had the authority to speak visually make that decision and i suppose the answer to that is that that that could have been but if it were something like financial who you hire for example is a public accountant right i suppose of the c f o alone had the authority that would be involved at the board of directors could be also be involved then you couldn't have a duty of care claim unless you had the directors as well well if if yes you can either way if you're talking about a specific his business decision and you have damage that flows from that then yes you could it could be a duty of care and i'm trying to understand that because i want to parse out these nine allegations to determine whether they could plausibly even be duty of care claims if they're just a single individual involved right and so you know the answer to that i think is that if the if there's an allegation that that individual had the authority to make that business decision then i suppose one could one could look at it that way but but that's not what's that's not what's alleged i mean we have you know as the district court found nine times the complaint talks about oversight oversight oversight oversight so so in that situation you know we clearly have duty boil to oversight claims covered by caremark i want to i want to turn just for a while i have a little bit more time to the question of whether the caremark standard applies to officers and mr kahn talked about that with you a little bit and that the two cases i think that are the most important of them that's helpful to our position and is our are the the world health alternatives case which is a delaware bankruptcy court sitting in delaware in which the trustee thank you made made an argument here he had knowledge his claim was an oversight claim the court found that the oversight claim could be made against an officer but the bad faith standard applies and then after that more recently there was a case called reader versus fair bank which we've cited in our brief in which the delaware chancery court applied to bad faith standard to oversight claims made against a corporate c e o as well as directors of the company so so you've got two decisions here that are that are you know relying on delaware law saying that officers are are covered you also have the caremark decision that talks about senior officers being being covered by the standard so into the mix well it's once again it's a question of focusing on specific decisions that were or were not made here i think that's that's the key here and you know the delaware courses cases talk about business decisions being the fundamental of causation of moving forward got to show some facts and all he's done here is say well you got these guys are liable for all the loss of the company incurred in all of our bankruptcy expenses and now in addition to that be you know it's sort of really highlighting once again that this is about oversight and not about business decisions it doesn't there's no causal link between these alleged losses and and the alleged conduct and you know if you look at the and i just have a couple more seconds here but if you look at the opinion of the expert witness that the trustee leans very heavily on on this you'll see that it just it's this broad statement well gee if they would cut expenses if they would had more profitability they could this company could have survived but nothing specific you know what expenses you know what  excellent use of it and mr card i do have a question for you truly that and that is that there were three things that happened to k s before the bankruptcy and i think one was you know some sure yeah and they had a lawsuit that they had to deal with and those that aren't those really the things that sent the companies spiraling into bankruptcy no no they're not and that's what our expert witness complaint it turns out the facts were a bit different in the losses from that were substantially less of if you back all three things out they were still operating negatively by six million dollars you know and that was that was passed on another question when my colleagues and i mean to give you extra time but you've got to be given a wonderful answer to my colle so i should sit down and shut up or sit down anyway but thank you very much to all counsel for your presentation the case just argued is submitted thank you ron thank you