how did you do on your night perfect your honor you may proceed when you're ready man please the court bradley cooper sure on behalf of the appellant chad mentor hill deadlines may lead to one welcome results but they prompt parties to act and they produce  finality that's the united states supreme court decision no decision of taylor v freeland in crohn's five o three united states reporter six thirty eight page six forty four one thousand nine hundred two and ask the court to keep that in mind as i discuss this case i represent a debtor appealing from an order of the bankruptcy court he had filed a chapter seven case and he was denied the bankruptcy discharge after an adversary case brought by the united states trustee that case was brought pursuant to a retroactively extended deadline  the federal rules of bankruptcy for a siege or set a deadline it's rule four thousand and four a that any objection to a debtor obtaining a discharge in a bankruptcy case be made by motion for cause prior to the deadline or prior ever answer prior to the deadline for objecting that deadline is set at sixty days from the first date set for the meeting of creditors in the bankruptcy case  up until two thousand and eleven but rule four thousand and four governed that motion for cause prior to the original deadline and the only other provision was section seven twenty seven of the bankruptcy code which governed what needed to be done to revoke the debtors discharge after entry of the discharge entry of the discharge is generally entered at sixty days again from the date of the conclusion of the meaning of creditors now in bankruptcy practice there are occasions where the court will defer entry of the discharge and what that means is perhaps that the debtor did not fully comply with all the requests of the bankruptcy trustee for documentation the trustee asked the court to please defer the discharge and then it is not entered at that point sixty days after the first meeting of creditors and so in two thousand and eleven it came to a head where there was this gap period so in that situation where the old four thousand and four the motion had to be made prior to the original deadline and the only other option was under section seven twenty seven which only applied to after entry of the discharge there could be a gap and in that period there were some courts that looked at that and tried to fashion remedies to fill that gap none that are really relevant because what happened is that the bankruptcy rules were amended and the amendment to four thousand and four b two is what we're talking about here now the important and the issue that arose in this particular case is that the united states trustee again brought its motion in after the original deadline and four thousand four b two requires that in that situation the movement has to show one facts that if proven would form the basis for revocation of discharge if made pursuant to seven twenty seven  that the movant did not have knowledge of those facts in time to object under the original deadline and then third point is that the motion has to me be made to promptly after discovery of those facts in this particular case the facts are important because there was a motion that was filed by a creditor who was in a court appointed receiver appointed by a florida court to file the motion prior to the deadline that motion was served on the united states trustee and it's very specific and it was verified under oath and it contained  information again very specific talking about the receiver this creditor being a court appointed receiver the receiver's investigation showed that the debtor received over three hundred thousand dollars in payments from an entity that he controlled during twenty thirteen in two thousand and fourteen a total that significantly exceeds the roughly twenty thousand dollars reported by the debtor on his petition and supporting schedules the next paragraph of this is that  the next paragraph sets out examples and puts it in the form of two columns what was reported and what does the evidence show that's being verified by the attorney for the receiver and so in the usual course this extension and asked for another one in the meantime the original deadline passed that extension was only to this particular creditor it did not include the united states trustee and after the deadline pas few months after the deadline passed the united states trustee brought a motion under four thousand and four b to counsel at the time the trustee was served with the receivers the information you just read the verified information is right would the trustee have had enough information to be able to make an objection i think absolutely your honor because it's one very detailed to based on the circumstances that are confronted by the party in that party's attorney including the deadline for filing so if an attorney has sixty days to file has information that's reliable in the fact that it's detailed enough and it's sworn under oath that certainly would qualify as as being appropriate under rule eleven even if the trustee had no independent knowledge to verify any of these allegations they would have to take sort of the not the advice but the  allegations of a third party here they would you taking the sworn statement of especially a witness the u s trustee can say well here's a witness here's a creditor somebody who who's knows what this is about what they've sworn under oath that this is true and it has sufficient detail for us to meet the rule not in front standard because it sets forth in the petition the debtor claim seventeen thousand seven hundred ninety four dollars of income for twenty thirteen the bank records show sixty one thousand six hundred five twenty fourteen four thousand nine hundred forty two claimed by the debtor and the bank records show two hundred sixty two thousand one hundred forty seven is why i asked the question is because it seems like that's what the bankruptcy court was really getting at i think the district court added a lot of a lot of detail to what the bankruptcy court had don and you know it's justifiably so because the bankruptcy court ruled from the badge and it wasn't a little confusing as to what the baker court was doing but i think that that's what the bankruptcy court was getting at was not necessary the timing in between the six days but was the fact that at that particular point time without doing further investigation the trustee may not have had enough information to file an objection it sounds like you disagree with that i disagree with it but i also think that it's an abuse of the bankruptcy courts discretion to make that finding and the reason being is because there was absolutely no evidence to support it so the motion itself brought by the united states counsel for united states trustee is starting at page seventy two of the appendix and page seventy three of the appendix paragraph six and are really seem to be the only ones that have any sort of factual allegations any sort of testimony that should have evidentiary value for what it's worth on paper because it was in fact verified sworn under oath but all it says is that on march tenth two thousand and fifteen burton w y and as a receiver for trying that corporation filed an application for an order authorizing a rule to those in for examination the debtor and a large amount of deadlines to object to discharge and discharge lady of the dead moves on to talk about some procedural issues and at nine appeared offensive shortly before rule two thousand and four examination was scheduled to occur the united states trustee became aware of the debtors piece in the rule two thousand and four examination nowhere in this verified motion is there any statement that said we didn't have enough time based on this timeline and set forth and sets forth very briefly the timeline but it does not say our office is not equipped to be able to turn evidence into a complaint in six days there is absolutely no testimony on which the bankruptcy court could have made that finding a fact that six days was insufficient for the united states t able to act what about the ordering of the rule two thousand and four examination itself i mean i think what the phrase was that's the whole point of doing that is to get some more information is that enough or arguments that aren't under oath and we're not going to take your oral statements that are not under oath as evidence when we're when we're dealing with motion practice and so the district court seemed to find a record  need to resolve its legal issue of what rule two thousand and three four thousand and four b two really means when it talks about knowledge bankruptcy courts and we don't need to because although i'm making a finding that's not necessary because six days was not enough and that could only have been based on unsworn arguments base made by counsel for the us trustee at the hearing that's not evidence at least according to what the the bankruptcy  and i think that that in itself is an abuse of discretion the standard that set forth in the city of duluth versus the find a lack of chippewa tribe and so the circuit talks about what is abuse of discretion and one of the possibilities is giving way to a credibility to something that should not be given weight or credibility in this particular case what should not have been a basis for the bankruptcy court making a finding that sixty days was not enough regardless of whether we're talking about constructive notice or actual notice is unsworn arguments were just things that perhaps the court knows from practice but again not a basis not an evidentiary basis and certainly not i don't believe the court indicated that it was taking judicial notice under federal rule of evidence to one of anything so it's simply a factual finding without any basis it was an abuse of discretion and i'd hope to be able to s that that the evidence that even if the united states try had knowledge of the contents of the receivers motion for an extension on the day that it was filed so even if you had constructive knowledge actual knowledge had knowledge evidence and the district court in it in a very well written well reasoned opinion found that there was that was not clear error that finding was made actually at the same hearing at the very same hearing where dr hill was present and at the very same hearing and it was made in response to his argument that the that the receiver shouldn't get an extension of time because the receiver had had enough information way back and back on march march tenth to file a complaint dr hill argued again dr hill argued that the bankruptcy court but there was the evident you know court looked at the motion as it was entitled to do and went and and used discretion to determine that there wasn't enough information there wasn't enough information the receiver and receiver made the point that this was a very complicated transaction there was money flowing through different entities that was you know back and forth and it was not entirely clear what the purpose was of these various things the united trustee had to assure itself that bankruptcy court found that even the receiver didn't have enough information in the receiver needed an example needed to examine the dr hill to determine whether in fact he could file a complaint united states receive had even less knowledge it was not an abuse of discretion for the for the bankruptcy court to determine that the united states trustee did not have enough knowledge what changed after the examination what did the trustee learn that the family unable to ask for the found objection well the trustee actually the trustee actually learned all of all of the facts he actually learned for the first time about this fraud at the examination prior to that he didn't have any actual knowledge and the bankruptcy court found that what chain but the risks what the receiver said it was in but it was important for the niceness to see and also for the receiver is they had to understand exactly where this money was going it was you know where the different transactions were going but they also had to understand the intent because some of the money because dr hill received some of the money legitimately from his company he had a he had a salary there were there are various potential innocent reasons why some of the money might have flowed to dr hill and and and back again so really the bankruptcy court found that really there wasn't enough information for the receiver to be able to file a false complaint at that point and that if the receiver if the receiver had tried to file a complaint at that point in time prior to the rule two thousand for examination in the additional documents that were produced in association with that that the complaint might have been subject to dismissal under eight or even so it's really it's really the nature of the transactions where the man it was flowing how they were structured that the trustee was unsure about even if the trustee had knowledge of what was in the receiver's information yes the nature of the transaction this and keep in mind himself even if he had had prior knowledge which he did and how did you ensure him selfe that this actually did you know that there weren't there were no other explanations you had to he had to have had to do a reasonable investigation and determine that these were indeed the facts that i think it's i don't think that it's that is that the rule that rule eleven or rule nine eleven in the bankruptcy context anticipates that somebody will simply take the allegations filed by somebody else without any supporting documents just sure it was verified but rule eleven requires more than that let me ask you this and excuse my ignorance of bankruptcy procedure but could the trustee have filed an objection once the information from the receiver came in and then amended the objection later on after the after the examination  i think well i don't know the receiver could have i don't know the united states he would of again with the rule have been right obligations whether and that's assuming that he had actual knowledge which he didn't but  that just yes that i think that would have been an insufficient complaint the bankruptcy court talked about how it wasn't how the court felt that it was not appropriate for someone to file an insufficient complaint that didn't give the defense enough details about what was catch my attention that there was no evidence you're here on this issue and in the transcript when we read the bankruptcy judges  statements that he talks about new evidence or here he kind of toys with the idea of evidentiary hearing but that the in the final analysis says it would not have been would have not added anything would have not been constructed or constructive or useful but what about this argue that the court that it was improper to just assume that there was not enough time or not enough information there should have been some testimony and i record developed on the circumstances that faced the the trustee so i think there's a couple of different issues there number the first issue is that that particular argument that there wasn't evidence on whether there was enough information in the receiver's motion wasn't raised in the bankruptcy court it wasn't raised in the district court either the doctor dr hale did ask for an evidentiary hearing it's pretty clear that that dr hill is asking for this evidentiary hearing for this particular reason he says one is that the standard is constructive knowledge constructive knowledge is sufficient but in the alternative if the standard is actual knowledge then it's going to require an evidentiary hearing to determine whether or not anyone at the united states trustees office had actual knowledge so that the bankruptcy court that was sort of the reason why the bankruptcy court when it determined that actual knowledge that even if the standard wasn't actual knowledge if constructive knowledge could be considered knowledge for the purposes of the rule which which the government doesn't agree with then that's why the banker's court said that ok i'm go as i explained earlier that determination was sort of made at this same hearing but earlier in the context of the colloquy between the receiver and dr hill and the bankruptcy court and that and that was and dr hill didn't object there and dr hill didn't say wait there's no you know there's no evidence of this we need never venture hearing dr no i asked for a ruling on that because he was trying to oppose the receiver's motion for a second extension so he didn't object to it there either and and really the third point is is that really in ninety fourteen says that you really need an evidentiary hearing if there is a genuine and she will material fact and so in this case  there really wasn't there really wasn't any any dispute the bankruptcy court didn't rely on you know anything that the united states trustee said at the hearing it was she at the back of the court had already decided th before the united states trustee started speaking in the back of the court relied on her own knowledge of the motion the motions contents and the transactions and that kind of thing there really wouldn't have been anything for or dr hill to cross examine the united states trustee about had it decided to haul in and have an interim hearing and really the practice in bankruptcy there are so many so many motions so many that kind of thing is that lots and lots of motions are and without evidentiary hearing if the bankruptcy court had the whole evidence or hearing any time someone said you know i disagree or i don't believe you it really wouldn't be able to function so that's the that's not meet as far as a burden for their motion the receiver had to meet the cause burden and the u s trustee had to meet the no knowledge and promptness or diligence   set forth a diligent standard that had to do with constructive knowledge for the analysis under section seven twenty seven for revocation of de charge we perceive the history not the legislative history but the the rules history which is provided at the a denham to the reply brief specifically states that the committee decided that the purpose of the amendment is to arrive at the same result as would occur if the discharge were entered promptly after the expiration of the rule four thousand and four a deadline and thus no gap existed in that situation seven twenty seven d would determine whether acts committed or discovered after the discharge would provide a basis for revocation that's the swung analysis into four thousand and four b two and there was no evidentiary issue because there was no evidence that the united states trustee brought that was credible evidence to support its motion therefore there should have been no need to have any cross examination because again the court requires sworn statements not just our human and counsel that hearing thank you thank you counsel matters b