of issues in this case all dispositive and i will take my cue from the court's questions but beyond that i intend to briefly address the jurisdictional issues and to spend the bulk of my time on the merits issues the  saying i believe we're obviously at the united states saying see the f d i c has raised the subject matter jurisdiction of more substance and that's the question of whether or not the preference claim here or the holding company is subject to fi exhaustion here and that's because what parker said was you cannot be in the f d i c claims process if you're a debtor what they meant was not a debtor in the bankruptcy court sense but the man a debtor and i thought about this hardened a lot myself i really think it's a simple concept all the court was saying i believe is that unless the f b i sees proof of claim with the f d i c is seeking from the debtor exceeds with the debtor was trying to require in preference and unless the f d i c exceeds that it is impossible for the debtor to be a quote debtor on its fiery a claim in other words the debtor could never be in a position if it had filed the claim it should have filed we could end up ending money to the f d i c and that proceeding so the debtor is simply trying to recover money from the f d i c in the concept is if you want to get money from the f d i c you have to go through the claims process and i understood it to mean with that there is a provision in the bankruptcy code which applied there and as i understand it is also relied on here that says that if there is the preference if there's a transfer and the person who made the preferential transfer also it is a claimant in the bankruptcy that their claim cannot succeed unless that preference money is returned and that difference that i can see in terms of how it operates why they said it mattered that it was more you know there were three heads be a set off it couldn't be less that because that would do it right to be on the explanation i offered i  don't understand beyond that myself but i could go on there are other reason then you also do this subsection one subsection two thing and that doesn't seem to me would have to work at all because if you go back to the case in which you got that from benson i think that's  and made a difference there because as for what the claim that was being made because they were claiming that it mattered for the defendant was and they said well no it doesn't matter who the defendant was because this is subsection either the language of the one or the language of v two then you have to have the exhausted remedy apply and i'm saying yes as as a squirmy clear and benson you apply the language the plain language of what it means it cannot be disputed that this glad to take questions i struggled with trying to figure out who what we do with park or even what perk or means the conclusion the judge of all rights at least where we  the osce such that the the balance is that there's no claim at least there there's no exhaustion required but the body of the opinion speaks a very different language and the body the language says basically if you're talking preference there's no because that's within a specialized knowledge of the bankruptcy court we don't think we don't think we don't we don't think the administrative agency is really the right way to go there and then judge fletcher the other judge which are right separately to say basically i think we should be decided on a narrow basis and as i read judge hall's opinion the narrow base is exactly what she did in the conclusion which leads me to wonder well maybe judge lester thought it was broader than irrespective of who is making a claim the i talks about who's making a claim and i may well believe recent overlap but i do think those are different but that seems to me is that if your reading of is the right reading that is to say that a claim relating to any actor of a mission of such institution or the corporation is a receiver there's not much left of parker well i believe that that's probably what is left of parker i suppose the affirmative defense part of parker which doesn't apply here this is not an affirmative defense your honor the language in their brief is this is how they describe their claim in this case quote this is on page forty six of their briefs the f d i  are seized control of the payment owed to the holding company by the i r s unquote if that is not an actor omission of the f b i c s receiver i cannot conceive of one so there's no question but this case for squarely within the we have these refunds we have no claim but if and only if and only when a court should decide that we somehow shouldn't have these refunds that they belong temporarily for a five day period if you will to the holding company then we have a from them based upon the agreement however about how much more that might produce but that's very different from your having to seek it out of the bankruptcy is a brochure absolutely on absolutely and so we believe that there is no subject matter jurisdiction here all they had to do was file a claim they didn't do it the literal language of d two controls and their own allegation that that what they're suing about is this so called seizure by the f d a i see so our view is very strongly very strongly that fire riya required administrative exhaustion here  clearly a subject matter jurisdiction statute this court has recognized that time and time again and that should be the end of the matter but i'm perfectly happy to go on to talk about the merits of the case because in the event that the court should reach them i think that there are points there are very strong as well but ok i want to spend my time with the court wants to hear on the merits the st the most important issue i think is that it's very clear this case has underlying bankruptcy law and incomes and tax law issues but it's principally a contract law case and it's a contract law case that involves a well established default rules the bob richards rule and that rules simple one whoever paid the taxes or the income and suffer the losses gets the refunds absent an explicit agreement to the allocation agreement is an explicit differing agreement the problem is the tax allocation agreement says absolutely nothing about the circumstance in front of this court it says nothing about any situation other than if the holding company receives the refunds from the i r s if the holding company doesn't receive the refunds from the i r s the tax allocation agreement says nothing about it and you don't have to take our word for it that's what the language says the language doesn't address it but but equally importantly the holding company former president and c e o who signed the t a a he testified that the parties did not contemplate the circumstance where someone other than the holding company would receive the refunds and indeed he testified that they specifically never contemplated what would happen if the f b i see receive the reach this agreement has nothing to do with the situation before this court and because there is no agreement that covers this the bob richards will apply now their only response to this because they don't address the language of the contract and they don't address the testimony of their own former officer what they say is well a gave us the right to give us the right to b c of the refunds and that's just as good and the bankruptcy court so that as well so initially this case turns on whether the tax allocation agreement gave the holding company the right to receive the or your honor you can read that two page document top to bottom left and right and there's nothing in there there's nothing in there that gives them the right to receive the refund the only receive the refunds this is court said in bob richards because the i r s has tax regulations require in the case of a consolidated tax refund that the refund whoever it belongs to must go in the st instance to the the parent company and that is for the convenience of the i that's why they receive the refund but even if we indulge them and even if we say half what sure your honor please i think the force of what you're saying but i wonder about the following that section one of the agreement the parents could have filed a tax return or the parent and the f d i c both could have filed it either one of them essentially no it's not an override the only reason why the parent didn't file a tax return here i presume is because they didn't think it was worth their while there is nothing in the i r s regulations there is nothing in anything that the f b i ceded that prevented the parent from filing from filing the return but your honor the critical issue is because even if under the regulations and there on the back of our brief you can find there i think page eighty seven to return even if the holding company had filed the tax return the refund still could have gone to the f d i c and here we know there's no problem with that because a picture or perhaps a word picture is worth a one thousand words i would direct the court's attention to volume two of the excerpts of record page  and fifteen on april th two thousand and eleven more than two years before the bankruptcy partition was filed this letter was written by the holding company it was sent to the internal revenue service and was copied to the f concede at the beginning of this letter the holding company says we object to the f d i c being the agent they do say that but then they come down and they talk about a tax return is coming there's going to be a lot large refund and all of large refund most of that refund will go to f d i c as receiver aventure bank and here's the clincher and we have no objection to their portion of the refund being pretty directly to the c unquote your honor from this day forward there could be no contention that they had any problem with the f b i see receiving the refund they could not have more clearly waive this then they did in this letter and so this notion that somehow they had a right to receive viruses that that's before they were a backup singer but that's not a problem your honor it's a problem because the trustee has a different view because he wants to get the money back either for the estate but that this is a if this is a waiver as a matter of law these are the rights and this is the state of play two years before the banks a petition was filed it's not within any preference period or anything of that sort and so this is an essence as a waiver it's a modification of the contract it's a change of the way things are going to be done and the other thing beyond that your honor it makes sense it makes sense all that the t hey did was give the holding company five days to turn around and pay these refunds back there's nothing in the t a a that suggests that they had a right to keep them for themselves all they have the right to do is receive them and if the music stopped during that five day period then maybe the bankruptcy law had had some implications in the music just stop you have me old to save your two minutes with our assistance you're gone over let's hear from the other side but we will give you a chance to respond thank you very much  i'd like to address st and that really i think resolves the receiver's various contentions about why it is that the construction of the tax allocation agreement so all these issues in favor of the trustee the decisive issue is that the bankruptcy code the provisions of the bankruptcy code rendered all of the debtors interests broadly construed interests in property with respect to the tax refunds as property of the estate and recoverable as such during the preference period once it was that the bankruptcy court determined and established that finding the fact that the tax allocation agreement did not create an agency or trust in favor of the bank with respect to the issue why does it have to be i there i mean as i understand the your argument on the other side is essentially it was neither that it was an agreement that dealt with one set of circumstances or not with this one that's  was on their argument require that we call it an agency or would you share anything or trust or anything else it's just doesn't cover this that is their argument is this is this notion only hope that it doesn't apply right and so it doesn't matter but the point i'd like to make is that in fact it doesn't matter because it's a question of timing and the reason is this is because under section five hundred and forty one of the bankruptcy code a one that defines property of the state broadly to include all legal or equitable interests of the de or in property as the butt of the petition to a three goes on to add that it brings into the estate any interest in property that the debtor recovers through preference action and so this court night circuit has recognized in the boy and reserve case that cited in our brief in the preference analysis that the construction of the interests of the debtor in property for purposes of preference and for five hundred and forty one property of the state or coextensive meaning that property that would have been part of the property of the estate immediately prior to a transfer during the preference period is is subject to preference law so then the question is well how how broad is that in other words did the debtor have an interest in property being the tax refunds prior to the transfers during the preference period and the answer to that question is yes because when we look at it when we look back at that point in time the scope of interest in property is extremely broad and this is discussed at some length in the indy mac report recommended opted in for by the district court in that case  which points to several decisions of this court noting that future rights and expect i'm sorry i don't know where you're going or what you're talking about so maybe we should well i think your question was why does it matter whether how we construct the tax allocation agreement and the answer is the answer why is that matter i said that why isn't that why do we have to call it an agency or a fiduciary why can't we simply say that the background default rule applies because there's nothing to the contrary well because the answer is that the construe in the tax allegation agreement tells us whether there was an interest of the debtor in the tax refunds and if there was in other words what the receiver's done is sort of trying to turn this on its head by saying well what we need to do is kind of look only sort of at this future point in time after the receiver had come in after these consolidated returns  filed and so forth but in fact what's really going on here and this is explained both in the bankruptcy court opinion below here and in the indy mac's case is that the predicates of the refunds that were eventually paid by the i r s during the preference period are sufficiently rooted in the pre bankruptcy past such that they would be a state property and the way that they would not be a state property is if the tax allocation agreement created an agency or a trust in other words why couldn't you just be that the tax allocation agreement does not supersede the bob riches rule because there is nothing in it that does why do we have to call it an agency or for judiciary or anything else well  allocation agreement i think doesn't need to supersede the bob richards rule per se what the bob richards rule suggests is that if there is a tax allocation agreement in place then not to the contrary of which well which leads to the ownership yes which leads to a different result it's tax allocation agreement which is the ownership well that's just it is that is that under state law bob richard says if you've got this agreement go look at it and construe it under state law and that's what the bankruptcy court did here and under state law the agreement has to affirmatively create that agency or trust for the expectancy of the payment that the debtor has so in other words the debtor here is expecting a tax refund coming from the i r s and within the world of bankruptcy even that future contingent on richard payment from the i r s would be treated as property of the debtor that's the background rule that's operating here and so then the question becomes yeah but does is the debtors interest in that property instead so remote in that it's only an agency or as a trustee that it has that interesting property that's what would take it outside of the reach of the property of the estate and so i would submit that it is in essence it works the other way round in that the reason we have to construe the tax allocation agreement how i understand churchill is that whether they expected to get the money in their pocket or not doesn't determine the ownership quite and that the ownership is in the  ownership like interest in the the holding company before the bankruptcy but that's the answer now that's the question not the answer was there ye honor i would submit that i guess i disagree with the way that the bob richards rule applies and this is actually in an interesting way addressed i think in a manner favorable to the trustee in the american financial case out of the th circuit which actually the receiver and in the concurrence there it kind of talks about well how is it we should deal with this situation and what i think you're suggesting judge birds on is that the bob richards rule kind of be used to fill in for example an ambiguity or silence under contract but i actually yes i don't think it says that your honor i think what it says is initially and then it uses language in kind of two different parts but up front what it says is well we think that if there's no agreement whatsoever between the parties then we're sort of going to assume kind of as a common law rule of equity we're going to assume that they would have agreed to an agreement that would create a trust now what the what happens here is no there is an agreement and so what the bob richards rule says oh wait so there's an agreement between the parties that is intended to deal with their rights and interests in tax refunds go look at that agreement and construe it under state law and  and that's it so then that's what the bankruptcy court did here is it construed the agreement under state law and this is where i i think the difference is and the disagreement is that the bob richards rule doesn't then sort of continue to  kind of create a presumption for example of a trust relationship or something like that it just simply says if you have an agreement go construe it under state law and under state law washington state law and the law of many other states is essentially kind of  this what would happen in the absence of any agreement which is the affirm and the agreement needs to affirmatively give the payee the creditor as we would say needs to affirmatively give them that interest in the forthcoming payment that's due to the debtor meaning that the bob richards rule has no application to question is under this agreement which says what happens to the money that's coming from the i r s the question is or i should say the issue is if it doesn't turn the debtor here into an agent or a trustee then the only rights that the bank can have in the forthcoming payment or i should say it doesn't actually have any direct rights in the payment that's the point and that's and that's what the bankruptcy court dealt with and that's what that decision deals with is that unless the agreement affirmatively gives the bank a director right in the forthcoming payment itself by creating an agency or by creating a trust relationship if it doesn't do that then that means that the debtor owns it why because nobody else does and so that's why i hope that answers your  question and i understand what you're saying which is that well yeah but if we were to kind of feel in what seemed to be silences or ambiguities and i should add here to the court did not think that the agreement was ambiguous on this point again as a matter of state law because because state law simply assumes essentially a background rule that you know a sense could be thought of as the opposite of bob richards which is that it assumes that the recipient the payee of a payment owns that payment owns the right of payment owns the money when it gets it unless the pay is an agent or a trustee you know you still haven't talked about jurisdiction and time is running yes i did and we respond to the following  strikes me as falling exactly under the yeah i you know i understand the point there and i guess the response to it is a couple fold is st is that the nd subsection relating to an active receiver when you look at the cases  that deal with those is all of the actions and claims and those are not in ram type actions like you see in you know bankruptcy preference action but rather are actions for things like lender liability claims and that so the st comment is i just don't like a claim in rhyme claims or claims yes it is a claim but what i mean is it's a claim that really only falls under subsection one and not to know subsection one and subjection to connect by the word or yes they're connected way or what i mean and it could also fall under two yeah and i'm asking you why doesn't fall under two i'm saying it doesn't fall under to be posted just fall and suppose it does fall under two so doesn't explicitly address subsection two but i think it's rationale does which is that the rationale of parker and the actual holding of parker which was which was affirmed in essence by the by the mccarthy court is that if you have a preference action in bankruptcy then it is not subject to exhaustion under fire ia and there's no that's not what parker says partners as a lot of stuff but it doesn't quite say that well i i think well i think the concurrence suggests that the majority holding is actually quite broad and may in fact encompass that and when i read the actual holding the part that says in conclusion it is at least where the offset that would be the claim is smaller than the amount that is owed yes that is what it says at the end lose and this is at least it doesn't say beyond their well what it what it says is we hold that a preference action and bankruptcy is not susceptible of resolution under fire e a comma at least aware and you're correct that what that would go to is if you read the holding as kind of being constrained to just that it essentially is in a way the extension of the decision that it relied on for additional support and that was kind of the point of the concurrence and so i i think you're right judge fletcher that it is a little bit confusing because if all parker really held was well we're going to treat this as an affirmative defense which i should add by the way this case falls under that as well in as much as there is a claim that is exactly equal to an offsetting coming to grips with my question which is a really simple question which is why does not this case fall under sub think as we've addressed in our briefs and i and i think over time here but i want to answer your question is we have argued that it shouldn't be construed that way because we think that the distinction that's drawn here is that look this really is an action that is not directed at an act of the f b i see let's go back again let's assume that to apply yes what difference does it make i mean i understand that parker wasn't about to yes and we would like for that could possibly be different if it argument belongs in the bankruptcy court and the agency is not capable of dealing with a good sense of sophistication well that argument is made and i want to kind of answer both your questions i think maybe it doesn't make a difference in this case we think and the reason is because even if parker read and we and we don't believe this is the correct great way to read it because this was the whole point of the currents but even if parker were read as essentially just a narrow holding in the way the concurrence would have come out which is i would just extend the midwest decision to those preference claims that are treated as affirmative defenses because there's a because there is a claim that's been filed in the same amount that is this case in other words parker says in addition to the things it says about policy in its initial construction of the statute it says well we think where there is a claim filed a proof a claim filed in the case that a preference action is an affirmative defense  the fact that there is a claim of games but rather that there is an act or a mission by the receiver yes an actual that something is covered under both i guess yeah but the word or connects the t not it's not that the f t c i see is going in and saying we have a claim for this ten dollars the say it's ten million dollars whatever it is we making a claim for ten million dollars they're saying we have the ten million  only if you st determine that it's a preference is do we have a claim so therefore that what we have here really is  other words the only reason there is a preference action against the f d i c is because it have the money right so i mean right so if it didn't have the money he would there wouldn't be a preference action and they would have filed a claim but back in the other case they actually did file a claim because yes there was additional money that's right they said was it was up to them right presumably was there's a qualification in the whole thing because there was actually the matter of how the preference claim came out money to the right as well and that's also why in that case you would always have a claim that would be in excess of the amount of the preference right but again i  guess the way i sort of understand the parker decision is that the the fact that in the concurrence kind of touches on that too is in that case the preference action was filed affirmatively and i think even before the proof of claim was filed and now and now the majority did something kind of interesting where they said well later though the claim was filed and then that kind of transformed it into an affirmative defense  to the extent of the claim but the claim that the claim there would have incorporated in addition to the other monies claimed the amount of the preference again just like here still a contingent amount and the concurrence delves into this a little bit kind of saying well it seems to me like what the majority is holding is that perhaps the trustee could it affirmatively pursue anyway you know even if the claim hadn't been filed yet in other words if a claim were filed later subsequent to that preference under the bankruptcy rule that allows that let me ask you a question this does deal one even apply here with respect to the preference claims against the f t i see so do you want is is i mean thought i read that sam's right yeah that's sounds like the one doesn't apply because that is a this is a preference action and you're thinking you want to succeed but you're very promising to succeed means that it doesn't apply right one doesn't apply again we don't concede that for the reasons we've discussed in the in the brief but but your point is taken that that that is part of the upshot of the holding and that's why the bankruptcy court concluded here under parker with respect to deal one that well in order to figure out whether do you want to apply as i st have to figure out whether there is an asset because that's what the one talks about an asset of the receivership that is being thought to be recovered and the way i answer that is by resolving the preference question because if there was a preference then the receiver ship doesn't actually own the asset that it's holding the one doesn't apply so there's no bar in that argument also tells you the deal one doesn't apply according to park it wouldn't in the it wouldn't in the instance of a successful preference action that's right of course you're saying  but i'm totally with you it doesn't apply i'm not sure there's anything that you have more to say but do you want the language is really clear to me this is a claim that arises out of an action b made a couple of observations about that one which i recognize that you know you're not so concerned about which is we've said even if it did apply were fine but to the extent that that's not the case in other words if the whole if jurisdiction turns solely on does this or doesn't this apply what we've argued and i think when you look at the cases that kind of deal with with the two is that the two is concerned not with a situation here where in fact although that although the basis of the preference action arose out of the fact of a transfer the transfer as as it was was made by the f b i see in its capacity as this alternative agent and what it's directed at what the action is directed at solely is not the notion that see as a receiver here did something wrong or that it's acts gave rise to some kind of liability like a breach of fiduciary duty as you see in some of these other cases instead it's an action directed solely at the possession of the assets in the receivership and it could only be limited to the assets of the receivership so thank you now we've taken the other side well over time you are already over time would you please put two minutes on the clock i'm not sure whether that's going to work or not but let's start with dividends your honor hopefully close the loop monday to the f d i c couldn't more clearly or in any way differently state its position from the way that you of the payment owed to the holding company now at the outset of my brother's argument he was talking about what happens here with respect to bob richards when you have a tax allocation agreement and i said at the outset of my merits argument before the bob rich a default rule that means in the world of contract law if parties to a contract do not address the issue that's addressed by the default rule the default rule controls in other words the tax allocation agreement doesn't give with respect to the f d i c it can only take away and the question is did it did so did it do so in the united western bank or case a published th circuit case following an earlier th circuit case that adopted bob richards the court said what you do to determine whether you have a differing agreement as required by bob richards to set aside the rule in the courts that when there is an agreement the court must determine one whether it unambiguously addresses how tax refunds are to be handled and two if it does whether it purports to deviate from bob richards whether it's a differing agreement now that case isn't even mentioned in their brief but a case that they have now said that they like is the amp in case out of the th circuit and i would ask the court if you only read one go back and read one page of the briefs in this case re page forty of the f b i cease opening brief because what page forty does is it simplifies this issue in the best way we know how at the top of page forty you will see quoted paragraph six of the tax allocation agreement in this case that is the only paragraph of the tax allocation in this case that addresses tax refunds in a footnote at the bottom of that same page forty you will see a provision from the tax sharing agreement in the am finn case a published decision of the th circuit and what you will see if you read the two of those is that they are virtually identical and why is that important the reason why it's important is that because in the amphibian case describing the language there which again you can see from this page if you look at yourself it's virtually identical the court said this quote this language like the rest of the t s a speaks only to the allocation of liability in the event of an adjustment such as a loss carry back refund it says nothing about the ownership of such a refund much less unambiguously establish the parent company's ownership of the refund close quote this circuit went on to say we reject the parent company's argument that the text of the t s a supported its right to the refund and agree with the f b i see that the t s a failed to address the ownership or disposition of refunds unquote so what do you do in that circumstance well in the six circuit they indeed went and looked at state law and state contract law why the th circuit said we don't adopt the bob richards rule but of course