good morning and may it please the court my name is justin o'dell of the delano neal out in marietta georgia i'm here on behalf of the appellant's who are investor victims in a receivership matter that was pending in the u s district court for the northern district i want your honour's to imagine coming home tonight and finding in the mail a letter that letter states that it's from a collection agent on behalf of the united states government that letter says that the car that you're driving is stolen and that a hearing was held and it was determined that that car had been stolen now of course you weren't present at that hearing you didn't know about it maybe it was even held in another state you were told that you have two options you can return the car that we have figured out is stolen or you can pay us one hundred thousand dollars now there's nothing indicating that the court determined that it was worth one hundred thousand dollars but the collection agent has made that determination and you can take their word for it the next thing you get in the mail is a docket entry not an order a docket entry from a district court maybe in another state that says you have three days to explain yourself as to why you don't believe you should have to turn over your car or pay the hundred thousand dollars that has been determined not by a court but by my collection agent you write a letter to the collection agent and say this doesn't seem right i have jet without you knowing that letter gets forwarded to that court apparently reviewed there is no hearing held you're never allowed to present evidence you're never allowed to tell that u s district court judge i don't think this car i don't think you've got the right car or if you do i'm not sure it's worth  hundred thousand dollars that they say it is in this case the investors were given an opportunity to oppose the outward creation of the liquidation poor or that's correct and if you look at the elliott case and the liberty capital case in both instances the courts have held that the distribution plan is too late you have to be able to challenge the content of the distribution plan before we get there see the life insurance investor who did take advantage of the opportunity to oppose the application of the liquidation plan in this case my clients raise these due process objections but the problem is they were allowed to oppose the method of distribution we were not allowed to challenge the amounts that we had already paid back ms gravatt who story i'm telling you has already been held in contempt and ordered to pay the money by the point time we get to the plane she was held in contempt the narrative i'm telling you is her story the first opportunity she had was at that plant even at that plant where we have some precedent to guide us and that's securities and exchange in both both investors in the elliott case this court reversed the district court and held in those two cases that the investors in that case were not afforded due process where they were just given a blank form and they were only allowed to have first look to how the receiver determined this fictitious profit amount that we're so they're saying we have to pay back to continue my allergy how did you calculate how much my car is worth that you're telling me i have to pay back we were never allowed to challenge how that amount was calculated that amount was never put forth and approved by a judge until the liquidation plan we were never allowed to raise a very meritorious contractual defense that we have which says that when we bought the policy we paid more money for it on the grounds that the corporation was going to pay the premiums therefore it's not a fictitious profit at all we're entitled to a set off but we were never allowed to raise that defense and claim or forced the receiver to articulate what that claim was in the shuttle in case shuts mn which is in the elliott case the question you raised judge was raised by the  that case they said wait a minute shuts mn shut would never have been able to present anything the court actually address that instead it may very well turn out that shuts is unable to dispute the facts it issues the court said that however we don't get there and till they've had an opportunity it's the old analogy of saying we know the guy is guilty he's not going to be able to prove he's innocent so why does he need a jury trial let me ask you something about the merits of what the receiver did the district court's order and your brief seem to be at odds the least the way i read them about what your client's contracts with c n n provided for correct what did they provide for in your view with regards to the payment of premiums correct once your client had made the initial payment i think your client's paid one hundred fifty five thousand dollars as a purchase price for the martin policy right that's correct and the bargain policy had a face value of two hundred thirty five thousand dollars now you're speaking of mr sutherland i don't my notes don't indicate the name of the person so you can tell me which one it is so what did the what did the contract provide the contract our position our position is that the contract provided that he paid and we set this forth in the sutherland argument to the district court he paid a premium he paid more than the policy was worth on the understanding that the corporation would continue to pay the premiums as part of the money it was receiving he would not be obligated to he didn't pay more than the face value you're saying he paid more than the market value correct he put a number but not the not the face value correct he paid more than the policy was worth because you're going to pay the premiums for me i'm not going to have to pay those in some instances these investors buy them at a discount on the understanding that they will pay the premiums but we believe particularly to that policy that we have a meritorious argument that wait a minute that deal the bargain for exchange we have a contractual defense to your attempt to recover these fictitious profits but the problem is we were never allowed to articulate it let you get your word out the district court said may have been correct if you are right that the fictitious profits argument that was raised at the end of the process lacked merit because people like mr sutherland the direct investors had to pay or reimburse c n n for the premiums that c n n paid how can there be such diametrically opposed views of contractual language out suggest to you  when say this all the district court can't make that determination because the district court never had a hearing about it when our own forget the hearing i presume that there's a contract somewhere there i presume you presented the contract at some point we file that in the sutherland objection from this grab it was too late she never even had the chance so we're talking about mr sutherland's example now so for him the opposed views about reimbursement of c n n for the premiums paid i think because there's a difference of opinion as to what was required in the contract regarding the payment premiums there were some there was correspondence associated with the contract with c n capital that the receiver does not want to bind itself to that mr sutherland seeks to bind that that as part of the contract extrinsic to the contract correct and mr sutherland but it's reference to mr sutherland wants to be able to argue that as a fact issue to say we we paid a premium so that i didn't have to continue to pay this there's also performance he didn't pay the premiums the company did so performance is evidence of what the contract would require and we believe that we should have an opportunity to at least present that in some form and i want to be clear we're not talking necessarily about a plain airy versus summary proceeding i also think this case got sort of off the rails on the argument that what we're asking for is that every one of these cases has to be tried to a judge in a jury what eliot requires and what the liberty capital case requires is that you have to have some form i'm not saying you can use summary proceedings but give us a special master give us a magistrate give us some arbiter to which we can present our case in defenses and that arbiter can make a decision about who's right and who's wrong and whether your proverbial car really is worth one hundred thousand dollars that's all we're asking for is that opportunity we're not saying that in every one of these investor cases it would be an overwhelming burden to impose and i understand that to say that in every one of these you had to go through a complete clean airy proceeding but summary proceedings require something mr grab that was given a total of three days by docket entry that was her entire opportunity to oppose the receiver and then she sent an objection and there was never an eviden y hearing conducted and then she was incarcerated on a contempt and she didn't even have an evidentiary hearing on the contempt as to why she believed there was an objection and then award of attorney's fees was made and there was never  evidentiary hearing or cross examination on the attorney speak where you don't need another bench or hearing on everything no but you're entitled to at least confront and cross examine the evidence and i know not always i mean district courts and i'm not saying this principle applies in your case but there are often times that district court to rule on the paper's correct but opposing counsel is at least allowed to submit an argument she they they said oh and i'm going to give you a turn over  talking about and then ensure hearing the post or hearing it all right but the submission of a of their attorney's fees is the submission of evidence and opposing party is at least entitled to respond to that evidence and say i don't think those fees reasonable and you didn't get a chance to respond to the whole thing and was never given the chance i would we were sent home in less than ten minutes from this grab it i wanted a hearing on the underlying objection and was never afforded it i couldn't even get anywhere trying to argue for hearing on attorneys because i'd been held in contempt i mean you have an opportunity to make an argument no the brief was saying and i did make an argument on ms grab it's contempt as to i said she shouldn't be in contempt because she hasn't been afforded the underlying opportunity to object i tried to raise the due process and i was told we're not hearing about that that's over i've ruled she owes the money she can turn over her policy or else that's it she was never allowed to contest the amount at any point she was never served with any in the ele case in the liberty case say you've got to be afforded something you have to be afforded two things some form of discovery as to how the other side came up with what they're coming up with i'm not saying four months six something some exchange of information and you have to be able to present evidence and argument and be heard it goes back to the moon lane case i know that all of you are familiar with it but some degree of fundamental due process has to attach and in this case none of these investors my loan investors were never given anything the first time they saw their numbers is exactly what happened in hagstrom they got a blank form tell us what you owe we determine what you owe we've determined what we think you've already been paid we the receiver not the district court you can object to the plan as to how we're going to distribute it but there shall be no questioning or amounts what was the ultimate moving aside from the due process issue that this report pointed out in one of its last orders that the rate of distribution for clients like yours was somewhere around thirty percent correct is that accurate i think that's in the ballpark yes ok and that some of them potentially stood to recover close to  hundred percent of their investment and here's the argument and the perkins case says that we have a right to actually claim up to one hundred percent of our settlement because that's not the gross profits that  clawed back in a ponzi scheme so that would be our argument we have a very good perkins argument we also set forth that we have a very good statute of limitations argument on some of these funds some of these payments that there a effectively clawing them back by giving us credit for him instead of doing a claw back summary proceeding they're saying we're not going to do that we are the judge jury and executioner your he got that money we've ruled on that you don't get any more and we never got to assert a perkins defense or statute of limitations defense that some of these funds are outside of your reach you don't get to reach them for my loan investor clients you can object to the plan you think the method is unfair rising tide versus these other methodology and by the way the plan objection hearing was not an evidentiary hearing we were limited to fifteen minutes of oral argument let me ask you quickly so you don't are out of time about going to jurisdictional issues on southern there's a jurisdiction there have been there are jurisdictional questions in but we can start with sutherland i think that's the more narrow jurisdictional question or sutherland is appealing from an order it's the same contempt intervention process that happened in this grab it this cravat appealed after being found in contempt and we were told it was too late it was in her last kotori or it was moot because she had purged herself because she's a mother and she doesn't want to spend time in the us district jail so she paid the money and that ended it for a policy under penalty of contempt no i understand that but that's the route that he took given the options available to him he appealed the order before the contempt came down because this appeal happened at the same time so the two could be taken up together the authority comes under twelve ninety two specifically a one and a two any order it jurisdiction is granted for an appeal of an interlock tory order where there is a step in a receivership specific to receivership directing sales and disposals of property or continuing modifying granting refusing dissolving injunctions and then lastly those are separate provisions right i thought twelve ninety two eighty two dealt with orders quote unquote refusing to take such steps in a receivership twelve ninety two a two deals with the receivership order and in this case the provision is the order providing for the directing of sale or disposal of property our position is going to be if they've got our policy there they're going to dispose i know but i thought that there was a qualifier that the order had to be in order quote unquote refusing to take certain action under twelve ninety a two of my mistaken about that that's not my interpretation my interpretation and then lastly but you also think i don't think that's your strongest argument your argument and i think the receiver agrees that the orders appealable under twelve ninety two a one jurisdictional question this case is postured at the exact point that the court reviewed the hag's the elliott case and the liberty capital case so could we agree with the rear other circuits in order approving a distribution plan in authorizing the distribution of assets is appealable and of the collateral order doctrine you could that would get that that's why the sutherland appeal was taken up again to i think the strongest argument is it's continuing modifying absolving injunction but it would certainly come up you know once one comes up the collateral source rule would go to the collateral attachment rule would pull up everything else with it for review and in the briefs i think everybody understands that can't this needs to be reviewed now we don't want to if we have made a due process there if the f c c has made a due process there we don't want to send everybody all the money close the case and then take it up so from a fundamental interest of justice an equity standpoint logic would dictate to get this reviewed now because if we need to go back and fix something and give people a due process defense we certainly need to do it now as opposed to when we've sent out all the money and that really what we're asking you to do is intervene at this point because what about the potential the potential problem concerning mootness with the turnover assignment of the policy well for mr sutherland so to address that argument the compliance with the order i don't believe his appeal because his property interest has still been taken pursuant to a contempt it's the equivalent of appealing the contempt citation that would have issued but it didn't so i don't believe his appeal is even if it were it's an error subject to repetition the receiver's not done and so it would be an error subject to repetition and the court needs to give direction on that now so that we don't repeat it and i don't have investors sitting in jail appealing from the prison cell trying to get some due process and so it would need to come up that way and have this court examine it and i think the ses brief acknowledges at least to some extent that that's a remedial action i'm not saying they agree with me obviously on the underlying issues but that it does need and does warrant review the other argument that i've got anticipated or the question that i anticipated is so so what do we do and of course what i'm asking you to do is remind it to the district court to reverse the orders entered by the district court related to the policies that have been issued ordering people to surrender those policies holding people in contempt for penalty a violation of those policies and the order approving the distribution plan and to direct that the district court conduct a summary proceeding that affords people who raise objections some degree of due process and that includes the right to limited discovery to present evidence notice an opportunity to be heard before some arbiter can be a special master a magistrate or something like that there is a concern i think and i understand the concern of saying well that's going to cause chaos in the receivership and my response to that is i've been raising this as soon as i could as soon as miss gravatt hired me she was given a few days to hire me she did i ran to district court and started raising these problems it could have been held up at any time i raised the warning flags in it and it wasn't the receiver could have stopped the district court could have stopped so they've worked themselves into this corner and the old saying is let justice be done though the heavens may fall and this may cause some difficulty to give my clients due process but the interests of fairness and justice always prevail when there's been a due process violation and that's what we're asking you to do here is just give these people some opportunity to go in and say my car is not worth one hundred another defenses yes if i understood your question correctly well you are one of the ones that we talked about was your contention that some of the correspondence between mr sutherland then c and correct allowed for a conclusion or a finding that c n n was going to pay the premium plan but do those arguments in any way account for the commingling of funds within the receivership because in the receivership entity yes we have no way of understanding whether that applies or not because we have no discovery as to how they accounted for it we don't know on their end ultimately which  know from their allegations that all kinds of funds were commingled so there were no evidentiary submissions by the receiver no nothing was submitted they said we calculated the amount by looking at our records and determining how much had been paid we never got just the discovery to challenge that calculation we never got a hearing to say we disagree with that calculation the investors were given a letter that says we've determined this is your bill and when they objected miss grab it got a notice that three days later you were you were going to be held in contempt counsel and your brief you state that there was no process in this case now explain to me why your opportunity to object was not sufficient in this case i understand the question to be the opportunity to object ms that ms grab it had the three day window of time not the opportunity to object at the distribution plant because by then it's a foregone conclusion the amounts were set so the confusion that had arisen in my attempt was to distinguish the difference between an argument people were beginning to say that i was attempting to assert that we're entitled to some kind of plein air a full on proceeding and i wanted to clarify this is not a question where my investors are saying they use summary proceedings and we think plenty are proceedings were required my position is there were no summary proceedings there were no proceedings three days is not due process complete lack of discovery and a complete lack of any evidentiary hearing there have been no evidence or hearing since i entered this case that is no due process that's not summary due process that is no due process ms gravatt mr sevan there has not been an evidentiary hearing they have not testified in this case they have not cross examined a witness in this case they have not cross examine the receiver in this case ever in front of a magistrate a special master anything so this is not i want to clarify that this is not an argument that started to be made about we're not entitled to a plenary proceeding because summary proceedings are appropriate this is a case where summary proceedings were not  point during your argument putting aside the opportunities that the appellants were given or not given my impression from reading the briefs and some of the orders is that the receiver never submitted any evidence to show how it had come to its calculations and conclusions is that accurate no that's not accurate what did the receiver submit in our motion for distribution plan in our exhibit but that's at the end of the process correct that's before you've told people what the fictitious profits are and then at the initial part of the case when you send a letter or when the receiver sent the letters out right and said we think you owe this and you have this amount of time in which to either assign the policy or pay the fictitious profits with regard to direct investors right now what did the receiver submit to the district court to justify its conclusions the receiver had it submitted a motion to the district court saying that based on the economic status of credit nation in order to preserve the assets of credit nation it was essential for credit nation to raise funds to pay the premiums because these are wasting assets if premiums weren't paid then the assets would be gone but i know the argument i want to know what evidence was presented so credit nation i can't honestly i can't recall what we submitted to the court but i don't think there was any evidence presented it was just the receivers position and conclusions from its investigation but normally when a party tells a chord we believe backs a court is not required to believe that and the opposing party is entitled to challenge that what's what i want to make sure there's a correct characterization is when we're telling the direct investors this is what you owe it's basically if the direct investor chooses to remove that asset from the receivership estate if the investor chooses not to pay that money they're not deprived of a property right that means that the policy where they're a direct investor would go into the general fund of policies that the receiver would sell and the proceeds from that sale are put into the pool i don't write in that a direct investments not a deprivation of property i'm not i'm not i'm not even at that point yet the i'm asking to file as a district judge i handle the number of receiver ships right and normally if no one o what the receiver is doing and the receiver submits at least some evidence of why it's doing what it's doing a district court is likely to think ok everything's proceeding according to pace everything makes sense to me i'm going to approve the relief that the receiver is requesting but whenever somebody says stop i object there's a problem it becomes in the nature of an adversary process and the receiver like any other party is required to explain and justify what it's doing so my question again is what did the receiver submit in terms of evidence to justify its initial calculations about the fictitious profits as far as how much they needed to collect from each person yes they did not submit that publicly how is that in any under any understanding appropriate under rule fifty six walked into the door walked in the door we had a liability of sixty million dollars we had five hundred plus investors and they were all going to lose their asset if the receiver didn't act quickly to preserve what asset was left that's the equity here the receiver filed various financial status reports as soon as he got in and figured out what was going on and from that point forward he he filed every month his every quarter he filed a quarterly report telling the  was going on and what was the status of the financial condition of the credit nation and the district court found when the receiver was appointed that creditor nation was in a precarious financial position and either unwilling or unable to manage finances so it was essential for the receiver to step in immediately and take the action a did but how did you calculate how did how did you tell the district court how you calculated the fictitious profits fictitious profits was set by the court and the court basically said whatever amount that credit nation has paid on behalf of the direct investor for a premium payment that amount has to be returned back to the receivership estate and they also and that was on your  motion x party where there was a discussion with the with the district court in a disc or put out two orders i know there was nobody else on the other side at that point with respect to the fictitious profits there was a motion that was filed  parte ex party meaning i mean what i know is in the public record that's debts that i really used the wrong terminology and i apologize there was nobody on the other side of the case when the receiver filed that motion there was nobody to oppose it nobody to say this is wrong nobody to say take a step back and think twice nothing like that at that point later on there was another group of investors that came up and objected to the payment of fictitious profits and the court basically said the same thing that we're trying to raise money for the receivership so the receivership can to continue to operate what i think was different with respect to this situation when you're looking at the various receivership actions that the f c c has entered into when the receiver walked in and we had basically three tranches of investors we had direct investors indirect investors and promissory note investors we thought that what the district court was going to do was basically categorize the direct investors an indirect investor saying these are investors that that invested into a life settlement policy but what i think in the courts district courts infinite wisdom they said direct investors i'm going to help you out because you have a direct investment and you have a contract with the insurance company and that insurance company that's a contract that we can't really step into because it's contracted to you and between you and the insurance company if you pay the amount of money that credit nation is paid on you we have to keep this policy alive because all of the funds that have been paid in for as investments and accreditation kapell it's all been dumped in the same in the same pot of money if you reimburse the receivership for the premium payments that credit nation is paid we're going to let you take it out of the estate and i'm going to go and i the court i'm going to give you the opportunity to potentially recover one hundred percent of your investment and so to the extent that you know the receivership is classified here as a collection agent or executioner wasn't first of all to carrying out the orders of the court and second of all what the court was doing was essentially elevating the status of direct investors to allow them to take the asset out of the estate so that they could continue to potentially recapture hundred percent of their investment  i'm not i'm not challenging the wisdom of the scheme that or the process the mechanism that the district court put in place to take care of the different vester so i'm not questioning that my concerns are directed toward how the could district court got there at the end of the days so take mr gravatt for example correct ok the allegation is that she receives a notice a letter whatever notification it is that gives her three days to do a or b to assign the policy or pay the fictitious profits is that accurate no that is not ok how much time did she have she had a lot of time what is a lot of time first of all miss grab it was notified in early june of two thousand and sixteen she needs to pay or fictitious profits or surrender the policy i want to add a footnote to miss gravatt as a daughter in law jim tort missed grab it was given the opportunity from june two thousand and sixteen to remit fictitious profits or surrender the policy how was she given that opportunity she was mailed a notice yes and when she didn't respond to the notice we tried to contact her on several occasions and the record is clear is how she responded to our agents then we filed a motion for an assignment and she had time to respond she chose not to the court set a hearing she came to the hearing without an attorney the court gave her additional time to find an attorney and then respond she had ample opportunity to object or help us help me help me with the timeline you say that sometime in twenty sixteen june right she was given an order she was given the same letter that was sent to all direct investors that said from you from the receiver from their seaver and ok and attached was a copy of the order as well  dis records or court order that said here is what you've been required to pay if you would like to retain your your investment pay this amount you are going to release it to you ok and what was that that you remember what the deadline was to comply at that point in time twenty or thirty days it was not three days we we would never turn around and when did and when did the receiver file a motion or take further action when she didn't do what she was asked to do i would have to go back and look my records but i recall that the order on our motion for contempt was sometime in january after the first of the year in twenty seventeen twenty seventeen right and miss cravat has appealed the motion for contempt to this court and the court denied it has moved so she attempts she's attempted to bring all this up in the courts and now we're done because the policy has been assigned it's over and your contempt has been purged that i'm sorry that's what the court said your contempt has been purged this issue is moot the contempt issue is moot but the assignment issue is probably not well that the court this court denied the appeal and mister o'dell was it was i assume also appealing that as well the fact that she had to remit fictitious profits to retain her policy we really can't it can't to be that if you are required to turn over personal property on threat of contempt and jail and you turn it over that you lose the right to challenge the requirement that you turn over the property right now her contempt was because the district court said within so many days i think it was seven you have to tell the court whether you're going to surrender the policy or whether you're going to pay the premium and she didn't either and it was because of her failure to do that that she was found a contempt it was all along after that did she assign the policy the pay the fictitious profit sorry when the court found her in contempt she paid the fictitious profits shortly after that so she wouldn't have to go to jail so she was never incarcerated i do not think she was i thought she purged her contempt for that she had to pay some attorney's fees and she had to pay for any day that she was not part of the contempt she had pain additional fine with did the district court allow objections on the amount of attorney's fees that she was assessed not that i recall that the court assessed the attorney's fees at the hearing i know but based on your support the receiver submission of what those attorneys fees were  right the day did she have a chance to object to that and not that i recall that doesn't sound right well it's one thing to say summarily i've held you in contempt you are wrong you've defied my orders i'm ordering you to pay attorney's fees that's one thing but it's quite another to allow that same party not to object when the other side come full comes forward with the amount of fees which they may think might not be justified how did that process will run its course i don't recall justin appealing the entry of the or asking the court to allow him to speak on the issue of attorney's fees but again where we are in this receivership is we have a lot of investors who spent a lot of money there are many many sympathetic investors in this scheme that were losing lots and lots of money and the receivers job was to marshal the assets for the preservation of the estate which is what he was doing if mr gravatt did not want to pay the fictitious profits she didn't have to but she needed to surrender the policy so that the receivership continue with his work of liquidating the assets so that he could marshal and then make a distressed distribution people but don't people who are saying that the receiver and the district court are wrong get to mount objections before the plan stage they get to mount objections if there is a dispute as to the facts and in this case there wasn't a dispute as to the facts there mr o'dell has asked for discovery on the issue of premiums that are sought to be recovered and i believe that i have sent him the credit nation records that show what amounts credit nation paid for the grab a policy to keep it in force and we have very detailed records of what was paid but he says i'm not denying that you did that and that's a good thing if you did but he says that as a formal matter the district court denied him discover accurate yes the to support did not allow him to do that but how does he get the challenge and again i trust what you're saying that you gave him the underlying records but how does he get to challenge the amount of fictitious profits without knowing what you are a lot what the receiver relied upon he did because when we were in this process in the district court when he was asking i'm entitled to know how you set these amounts i believe it was around that time that i sent him a copy of the receivership or the credit nation records which show how much money we paid on his rabbit's behalf i can find we can find it in the record there is some documentation of it i don't know if i sent it to him one on one but i'd be happy to brief this issue to the court and show what i s to him at the time we were going through this with misc rabbit because for sure the receivership did not want to slow down the receivership process on issues like these we were definitely an open book and we were happy to show whoever was interested what information they needed in order to satisfy themselves that the receiver was only seeking the amount was entitled to recover in order to transfer this policy to the direct investors they can go on about their way payments should be considered factors as profits so what the district court decided was there was co mingling of funds whenever anybody invested in the credit nation whether it be a direct investor policy or indirect or a note all the money came into the same pool the directors investors had have raised the issue that they were supposed to have their premium obligations paid by virtue of the mt they paid for the policy that we didn't there was no money that was escrowed at all so what the district court decided is we have a lot of policies that need to be sold and the receiver ship basically went to the district court and said i just want to sell policies so i can courts and hold on we've got these direct policies here they've got a contract with the insurance company it makes sense for these and director investors to retain their asset because they have it directly invested into a specific policy if they want to keep that policy they just need to reimburse the receivership estate for the amount that the that credit nation has paid in premium obligations once they repay that amount the receivership estate has payments should be considered for dr roberts well the term fictitious promise is a term of art that's when used by the court and the term that that term basically means the amount you need to pay to make the receivership state whole so that when you take the policy out of the estate the state as is doesn't suffer a detriment that's what is what i'll ask you the same question that i asked your coll what do the contracts provide to the extent that they were uniform about payment of premiums for direct investors they were not uniform policy said that they would pay the premium obligations for four years  n n would pay to the investor with a credit nation would pay for four years now with respect to the sutherland's the sutherland's policy actually says that the sutherland's will make the premium obligations so in this case not only were the southerlies required were asked to pay the fictitious profits because if they want to take the asset of the state they were required to anyway the sutherland's are creditors are debtors of credit nation credit nation could file  an action against the sutherland to recoup the twenty that twenty three thousand dollars in premium obligations that we've advanced on behalf of the silence keep policy in force if just in terms of how this work mechanically if mr sutherland had the obligation to pay the premiums why was c n n paying them so the policy that mr sutherland purchased was actually a category of policies called a federally policy which is federal group life insurance policy the insured was a federal employee his payment for the premium was taken directly out of his retirement benefit check and there was no way to transfer the pay or of the policy based on the terms of the policy so what had to happen is mr mr martin's payment would be pulled out of his saving his check credit nation would reimburse mr martin and then the suther are supposed to reimburse for that nation but that didn't happen you know we rate credit nation reimbursed mr martin southerns did not reimburse credit nation but i want to add to the sutherland were frequent investors  credit nation and they have paid thirty seven thousand dollars a fictitious profits on other policies and in exchange for paying thirty seven thousand dollars in fictitious profits they received and retained the benefit of six million dollars of death benefit the reason why they're here today on this particular policy is that the policy had no value anymore and it was worth less than the amount of fictitious profits that were due not it's not in its face value well is suppose as i understand the numbers the face value of the policy was two hundred thirty five thousand dollars right they paid one hundred fifty five thousand dollars right the fictitious profits were twenty something thousand dollars right so you're saying that if you have to continue paying the premiums through the expected lifespan of the mr martin then the policy will not be a profit making enterprise correct because his life expectancy changed go there are two issues that are here today and one we talked about a great deal it's affirming the assignment of life settlement policy two to the receivership and the second is to affirm the district court's order within the receivers to stri plan with respect to the distribution plan all of the investors had an opportunity to object to the distribution plan at the moment that it was filed the receiver the district court put in place a scheduling order that  up if you wanted to make a claim and then if you wanted to in the receiver need to respond to disallow a claim and then there was objection so there was ample opportunity for objections to be heard with respect to the distribution point some cases suggests that allowing objections then but only then might not be enough in certain circumstances well again the process that's due is what's what should be required based on the circumstances and the facts of these cases were not different everyone invested money and they were all going to lose money i mean that it's different than in the in the elliott case where the one investor was entitled to a more expanded proceeding because he was it was the receivership believe that he was a debtor of the entity in receivership and the mr hagstrom believe that he was  induced to enter into a an investment and then that case of course said yeah you know you're entitled to more expanded proceeding there were other investors in the elliott case who had surrendered securities  to the defendant and they wanted additional discovery so they could talk about the terms and conditions in which they assign the securities to the defendant and the courts said no it's all the same you signed it once you sign your policy you don't have any ownership rights in it it there's no difference in the fact that you're saying this all the saying you know kind of like we got it we understand and in this case mr o'dell and his clients haven't articulated what additional discovery is going to do what do they need what do they see he reference mr o'dell references in his briefs that what's necessary is to understand who is taking and how much they're taking in what they receive prior all that information is in our distribution in our in our motion and all the exhibits attached there to it's very detailed they can see why we're distributing and how much and on that there are any is there anything in the record that you know of that lays out in an  sense how the fictitious profits were calculated either at the beginning stage or at the planned distribution stage when people were told you have this amount of time to object now so what we did not do is we did not submit a document into evidence that says here's how much credit nation has paid for premium obligations for those that are now being asked to to remit the fictitious profits to save to in order to take remove their policy from the receivership state but again it's not a deprivation of property if they choose not to pay the fictitious profits it only means that the asset goes into the pool for sale and then eventual distribution  of property potentially if you're required to assign the policy well because then you would there's no way you're going to get one hundred percent on your investment or more right well yes but i mean there's a distinction ship everyone's a loser it just depends on how much we're all going to lose with respect to fictitious profits being paid that was actually an opportunity to support to elevate the status of direct and i i worry with you one hundred percent on both of those points but that doesn't mean there isn't a deprivation of property if you decide to sign the policy and go into the pool because then you're going to be getting about thirty cents on the dollar according to the district court rough calculations and if you decide that you're going to pay specific policy it was their money that was being used to fund the premium payments so you know it's not as if we were attempting to punish the direct investors by saying you got pay this or else it was to the extent of we have to equalize and shoulder the burden and because these promissory note investors we've used their resources it only makes sense if you use a resources you have to pay them back and then you can go on about your merry w now with respect to what's happened in this case since these appeals have been filed the receivership has distributed nine and a half million dollars of their receivership the funds collected we have about one point one million dollars that's left but the majority of the funds have been distributed there's nothing left so i mean there's nothing left what there is this is a million to the set we've already distributed nine and a half million dollars at nine and a half million dollars for all intents and purposes it's gone right would be extremely difficult to go and grab this back from the investors so to that extent there may be a suggestion of this as relates to the distribution plan because it's been distributed but it hasn't been fully destroyed not not fully you're right you are correct  with respect to the appointment of the receiver the investors in the solomons make an issue about the fact that they were not advised as to whether it courtman a receiver was proper there were certain findings of the district court found that again credit nation their liabilities exceeded their assets and that the asset for an asset freeze was necessary to preserve the status quo and preserve the sufficient funds for payment of any discordant award and so it was not and it would not be so what they were required to notify all of the investors partially appointment of a receiver turning to the jurisdictional issues yes i know we're not bound by the parties agreement but it seems that you and mr odell agree that with regards to mr sutherland that the order requiring him to pay or assign is appealable under twelve ninety two a one is that accurate no we do not agree that this court has jurisdiction over the sutherland appeal first because the issue is moot he's already signed the policy and in fact receivers already sold the policy and second under twelve ninety two a two we do not believe that this falls within the category of something that's appealable for any unlucky tory order appointing a receiver refusing to take steps to wind up a receivership i agree with you on twelve ninety two eight two i'm asking about  an order granting continuing modifying except for an injunction so why isn't discontinuing an injunction by requiring him to do something which the court had signaled earlier so this is an order requiring him to assign a policy it wasn't on the initial appointment of the receivership award right so that would be the the first response is that it's not an appeal of an injunction and second of all but is it in order modifying an injunction because the initial order that said the receiver and froze everything didn't require people to pay fictitious profits so no so that the receivership appointment was just basically putting a receiver in place and freezing assets this particular order assigning was basically transferring property to a receiver and under the net severe case orders requiring property transfer to receiver is not appealable why not because it goes if it's in  goes to the various policies for not having piecemeal litigation in a receivership where you're constantly appealing the decisions of when one of these supposed to appeal to the end and that this is a what the legislature set out that are they support when is mr sutherland supposed to appeal a final judgment which is when when the when the receiver exhaust its resources and then you look and then your argument is it's all equitably moot because we've transferred everything there's nothing to recover there's nothing you can do we could have it's a good catch twenty two and there's no appeal available anywhere marris fondness emerges that ok he could have taken procedural safeguards in place to preserve assets like filing a motion to stay for whatever the value is of what he's contesting and that amount not be distributed in the receivership he did not do that but you're saying but absent that you're saying there's no appeal available to him practically  an he can at the conclusion of the case he can he can take a step to stay the ship you should for the amount he contends he's due and then at that at the when there's a final judgment then that can they'll be funds available for him but you're going to argue it's moot you're going to argue it's all moot because he's turned in the policy and you've sold it so there's no relief you can give him that money is gone and you've distributed that money when i'd that makes no sense to me because when i get there what i'm and he's already had it but what he's going to see is that these are amounts of the receivership paid on the have to keep his policy in force if he wanted to keep the policy then he needs to pay that and if he didn't now he becomes a risk he becomes someone who goes in the pool for distribution on the ultimate distribution of funds from all the assets then his only appeal is that he wasn't given the right amount of distribution not anything else right that doesn't seem right either so he can't argue that he's been denied due process he can't argue that he was in quite correctly required to pay fictitious profits are assigned the policy he can't argue that he was improperly deny discovery he can't argue any of those things because everything is gone the only thing you can argue is oh i received thirty one cents on the dollar but i really should have received forty two cents on the dollar as the only appeal he has available to him right it's money right and that money  change based on what that is he believed he was in but still at the end of the day it's money money is going to be his ultimate relief so it doesn't matter if the policy wasn't or was but the money doesn't always solve other procedural concerns like the opportunity to be heard except her and i'm not saying their claims of due process violations have merit i don't know what the answer to that is but you're saying essentially that those claims can never be raised on appeal in a receivership like this one based on the jurisdiction of this court under twelve ninety two a one and two no it appears that the legislature has verily very narrowly limited what can be appealed with respect to receiver ships and if the appointment o that the statement was made and it's an accurate one all of these policies were different regarding how things were supposed to be done yet the district court treated them all exactly the same and when individuals like sutherland and grab it and there's others that are co parents we just highlighted those two because there starkest examples when they said wait a minute my policy is different they were never given the form in which to raise their objection so when counsel says no all these contracts were different they were all treated the same and that same process was you're going to pay back what we owed but here's what i want to highlight because you could say well the premiums are what they are in there in the contract and you take their word for it that they pay them the fictitious profits does not just include the premiums the receiver was unilaterally allowed to calculate a reasonable value of services that c n rendered in servicing the policy so we're not just talking about the premium is a thousand dollars a month we paid it for twelve months you owe us twelve thousand dollars if you look at sutherland there are several thousand dollars calculated as this is  reasonable value of other services that was rendered by c n capital in servicing this policy so we're not just talking premiums we're talking about a completely arbitrary discretionary some sewing determined by the office of the receiver and then that bill being sent to the policy investor and saying you owe us x for premiums you owe us why for servicing amounts that we've calculated now you asked about the language of the martin policy and i've located some of that language for you and this is why we believe it's important when you talk about we contend that the correspondence and there's even record in the file of correspondence with the receiver initially the martin policy was not going to be included but the martin policy itself says fees for all services provided and the performance of duty shall be complete and included in the purchase price that's the policy or the or the contract for that purchase of the policy contract for the purchase of the policy the agreement that they're enforcing against us so our defense would be what's the language in fees for all services provided in the performance of duties are completely included in the purchase price you're saying fees includes premiums that would be one of argument second there's there's a course of conduct and other correspondence that reinforces argument in that regard but even if you said well we're not going to let you put up evidence about that it's a foregone conclusion the premiums are what you are why would we pay back eight arbitrary sum for reasonable value of services when the contract said those are already included c n n supposed be paying those all along so this fictitious profits number on make sure you understand is not just premiums it's this arbitrary sum that was never proven or challenge in a court of law or by any arbiter of record for what is this reasonable value of services that was awarded as part of the fictitious profits that some amount that was determined where c n n capital was able to say this is what we internally spent keeping up with the policy that we shouldn't have to spend you've got to pay that back to the receiver says that with regards to ms gravatt who were using as sort of an example of what you think was due process gone iraq i the receiver says that this crowd had had them plenty of time that she was told and sometime in and sixteen that this these were the options available to her was given a time to do something one way or the other didn't do it was then sent an order that appeared for a hearing was told to make an election didn't make an election and that's when the contempt occurred let me give you her timeline as per the record she was sent a letter sometime in june nobody disputes that when she didn't respond to the letter she responded negatively to the letter on aug fifteenth two thousand and sixteen a motion was filed with the court by the receiver to compel her and others to assign their policies that's that's the motion the next day there's a docket entry aug sixteenth from the district court and the direction is to the receiver mail that docket entry to all the investors the docket entry deadline for the it best to respond to the whole on the docket entry is the motion by the receiver the docket entries by the district court there's a motion and then the district court does a documentary saying motion received notify all the investors that they have until august nineteenth three days to respond to your motion requiring that they should assign their policies this still isn't challenging the basis for their calculations it's just they filed a motion saying you got to turn your policy over on august twenty third without a hearing without any evidence being conducted there was an order then requiring my client to surrender her policy that timeline now everything after that was about contempt so then they moved to holder in contempt all of this stuff about she was given a week she appeared in court she was told to go get an attorney that was all on the contempt so by the time i showed up and by the time ms webber did try to share with me some information about how they'd made calculations it doesn't matter because we're no longer fighting with the district court about whether or not that claims to have merit and whether or not she owes the money and whether or not she owes that amount of money or whether she has any defenses were arguing with the district court saying please don't put her in jail all i was trying to do was give her some due process i asked the court at that time you can't take this woman and incarcerate her for contempt of an order that she has not even had an opportunity to respond to because three days by docket entry is not a meaningful opportunity to respond and even if it were you would need to conduct some degree of an evidentiary hearing that is her timeline so when we say that she had all this time and she was afforded counsel that all came in the contempt that did not come when the underlying obligation was being set forth and she y proceedings are appropriate but they have to afford some degree of due process and the elliott case in the liberty capital case both on remand said what does that mean that means in the case of the schutz mints in the elliott case they need to pray for him in which they can present there are facts be heard present evidence controversy allegations raised defenses that can incur in front of a special master it could occur in front of a magistrate it's not a full on proceeding every time you don't get four months of discovery but you get something you get something and there's plenty of guidance as to what that something could be and could be afforded that's what we're asking to do as to this position that nine million dollars is gone and all the money has been distributed all i can say is this i raised these objections from the first day i was hired if i were the receiver and i were the district court when people start making due process she would have been placed in the position of paying a bond she's already been put ordered to pay money it's not feasible and the decision to grant the stay first resides with the district court judge then i have to come here and ask for a reciprocal stay i raise these objections  every instance i gave the receiver and i gave the district court every minute to pause and say wait a minute let's hear this out the fuller we scramble the egg but nobody agree and my first opportunity to have it reviewed is now mr sutherland also is an appellant in the in the other appeal he's a part in both appeals because he's also appealed the district court plan and as you pointed out this was his first chance we've raised these every time i've shown up in a court and to please please please just give us some degree of an opportunity to be heard in a meaningful way and present evidence that's what we're asking you to break we have your argument