please the court again paul leeds also representing the debtors obviously in this matter now we move on to the issue of plan confirmation which was the rd i think of three original appeals that came out of the process in the bankruptcy court effectively there was a trial on the discharge ability of a large debt the debt in favor of a lead face value judgment about two million two hundred thousand dollars elite move for an order of signing post judgment interest at the state rate to that  judgment the bankruptcy court granted discharge ability denied post judgment interest those went up on appeal but while the orders were in effect the th amendment plan finally came on for confirmation during two thousand and seventeen and that's this case this was a form plan that's one of the most important things i want to highlight to the court is that hamilton's intent here was to comply with whatever the requirements of the bankruptcy code were for the payment of his creditors in this test one share that intent to come in meet the requirements and of course that's the good faith requirement which i'll talk about in a moment i'm sure will come up in the conversation you're aware that there was a collection injunction added to it so the local rule provided that you have a form plan and if you're going to make any variations to it as a frequently the case you just identify those and that's what my office did on behalf of the debtors and we included a specific plan injunction because there was a history of a lot of sort of side of litigation among the parties were suspected that elite would take every action it could in if it wasn't completely clear in the plan even though we believe the automatic stay would apply and we continue until the discharge was entered a specific injunction against any kind of a tax on property that a leak intended were somehow property of the debtor should be in there and that was included in that injunction was very specifically and thoughtfully addressed candidly by judge lay them in the plan considering i believe the th amended plans that was the precursor some amendments were made to get to the six had at that point not assigned interest to the judgment but in fact thought it would be a stable judgment and made a finding of fact when talking about that that for these debtors to be able to reorganize if ten percent interest was occurring that would be difficult for them to ever get out of this but at the time that he entered the confirmation order had considered all these things and that's what's required and there's nothing irrational about the judge's approach to this the baptist the bat that point by the time we've heard the confirmation appeal had already heard the not to start ability appeal and frankly it was substituting its own judgment for that of judge lay them and that's what's most concerning about that's a look at the macondo right and what's out there for this type of collection injunction and there is nothing like there wasn't but that's sort of the point is that the fact finder have to make that judgment the judge who sat over this case for thirty three dollars and a half years watched the not astroids ability case play out heard all the motions and had seen what had been going on in the court room for three and a half years made the decision and that's the important thing here is there was nothing irrational about judge laden's decision in fact the bapi even acknowledged that without that injunction or without something preventing a leak from coming in it's the fact that the discharge for a debtor in chapter eleven does not get entered into the last plan payments are made with and it sounds like it's like under section three hundred and sixty two dollars c the automatic stay stays in effect until the discharge  the collection injection is really redundant it may be your honor however at the time the plan was confirmed we were concerned that a leak was planning things that we had no idea would be coming and so we wanted to make it very expressly clear in that would preclude elite in any event to enforce its judge and during the pendency of the plan i think it's what justifies the law allowing the injunction your honor so i think the legal solution so to speak is that this injunction is consistent with the law because it's consistent with the automatic state may be redundant but that's not a reason not to have it but the factual and legal predicates were done correctly at the bankruptcy court there was no error so to speak as this court is obviously we're dealing directly position that the cases in the th circuit in virtually every other circuit to consider individual cases they focus when you're talking about feasibility they would have more or less on its face value that is it possible to deal with the plan calls for and that's what the cases we've cited stan i your briefing makes this point repeatedly that it was possible because the debtor could make the payments you know i guess i understand that point but what bothered the bat that there wasn't a showing that at the end of the day that the debtor would be back up on his feet and right yes well i think and in a position to to to pay this debt and they seem to be they will that end of the lack of good faith argument as well saying that just delaying this thing did that but the debtor did exactly what he did or should do under these circumstances has a debt can't pay it comes in and meets the bankruptcy code requirements gives lead a secured claim about three hundred thousand dollars in fact during the term of the planet we will be paid about six hundred and forty four thousand dollars over the term of the plan including both the secured claim and its debt will grow in light of the interested appears but this is an unfathomable that most people will never see this kind of money during their lifetime and the fact is that this debtor did not have the resources to pay that debt immediately so the debtor goes  the resources to pay it ever probably not your honor and but the remedy happen to your definition of feasible is simply doing what the plan calls for even if the plan doesn't call for any realistic payment on the debt will there is a substantial payment or honor i mean there's a commitment to pay over time the secured debt that were never fought on anything about interest rate of the terms of the secured claim elite accepted that they took what we believe was a blocking position they're going to do anything they can to prevent hamilton from reorganizing the rights of a nondestructive or creditor will be their remedy is that when all other creditors are paid whatever pro rata percent they're going to get an every other creditor other than these two voted for this plan those creditors will be paid the debtor gets the discharge then the league has its remedy it will be enforced under california enforcement of judgments law if hamilton has wages they can take twenty five practical matter that's correct i think just for me there's that elephant in the room and i wanted to see a fair chance to respond to it it isn't just an allegation that mr hamilton i mean this is my word stole intellectual property and client lists and employees and is in competition with elite that's my part perhaps unfair characterization but i mean it's a shorthand way of saying what i understand sort of the backstory to be and i'm going to give you a chance to respond it's not just an allegation an arguably a math think elite would say is that mr hamilton's using this as a force field to put keep them at bay for five years while he can compete against them that's perhaps a very blunt characterization but we are going to talk about good faith here so how does that factor in i just want to give you a chance to respond to that bothers me greatly there is no doubt there is a judgment for a bad thing that happened mr hamilton left the information given the fact that no and i don't mean to minimize it there is a jury verdict  that there was interference of contract and misappropriation of trade secrets act comprises about five a one thousand dollars of the verdict the balance of that word duties loyalty and for these jury duty allegations because of his role as an officer of the corporation that he left  obviously the underlying facts in that were hotly disputed but there was a jury verdict and a debtor has to make a decision to go on appeal and fight factual findings getting extraordinary high a level of deference app a court of appeal or do you just deal with it in bankruptcy go in and let the thing play out and that's what this debtor did it came in and said whatever it's going to be it's going to be we're going to let a bankruptcy court decide what the non historical component is the judge did the whole amount is mr hamilton only one hundred and sixty thousand dollars estimates tesla and and they were prepared to deal with that but there was another factor here that's very important to the underlying plan and that is at the same time we went in this chapter eleven there was an operating agreement with a company called suma summa was the vehicle of the problem the bad things that happened seumas operating agreement included a nine compete for mr hamilton mr hamilton can never make this kind of money as he is subject to a non compete there is no other field that he can make the kind of money he will need to repay creditors back so we went into the chapter eleven i would have much preferred this to be a chapter seven believe me but we went into the eleven with the express purpose of rejecting the sumo operating agreement so that he could make money to repay claims then it and there was substantial litigation suma was fighting with him also a competitor they had fired him this is an industry that when people start making money they begin stabbing each other in the back and it's just a it seems to be a fact that they want to make business makes a lot of money and that's what happened mr hamilton there he had to move on he had to repay a lead and he knew that so he wanted the chapter eleven to reject the operating agreement to make the money to pay this back there's no dispute and we've other than the legal standards you know the judge found that this was a knowing case that has to do with the discharge ability appeal but the judge found no intent to harm a lead but there was certainly enough knowledge that it would fall into the not historical category and we are trying to deal with that i do this in terms of your explanation but this play a role in the good faith i think it does your honor of good faith really if you look at the statute says compliance with a bankruptcy code that's what it says are you complied with the requirements the bankruptcy code elite group is that their argument and says no it's got to be more than that well the fact is when you've got an un payable debt and you go in to pay what the bankruptcy code requires it's really all you can do under those circumstances and fifteen seconds i'd like to reserve thank you the standard that counsel is asserting for feasibility that the debtor has the ability to pay that's the standard in a chapter thirteen dollars case it's not the standard in the chapter eleven case the standard in chapter eleven cases as you recognize is there going to be a need for further liquidation or reorganization though mr hamilton obviously can't liquidate it ability mean for an individual or your honor i would disagree with your comment as to the whether an individual can be liquidated that with his will back up because chapter seven of the bankruptcy code is the liquidation chapter and individuals go into chapter seven liquidations every day of the week it is the so i think we have to view liquidation not in terms of that and into the debtor but in chapter seven and a vigil is liquidated by filing a petition or having their case converted to chapter seven at that point in time a trustee is appointed the trustee collect all of the assets of the that the debtor has all property of the estate the debtors and title to keep some assets through exemptions that are allowed under either federal or state law those assets come out of the estate the d uses those assets for the fresh start and then the trustee liquidates everything else and pays secured creditors if there were proceeds from collateral that that that those  else after they pay the expense of the bankruptcy everything else isn't shared pro rata among all the unsecured creditors if you if you win on your point here are they going to go into chapter seven that what you're saying or what happened if you win what are you going to actually be able to collect now that you wouldn't be able to collect under their theory ok counsel mentioned that absent a bankruptcy stay elite would be able so we would get that and over the term of the plan that's two hundred and fifty thousand dollars army sorry over the turkey over five years that's two hundred and fifty thousand dollars the plan is a five year term what do we what do we get on our unsecured claimed one hundred and twenty four dollars we would also because we have a lien on the real property we would simply be able to foreclose on that lien and we would get the real property so we would be far better off in a chapter seven case or any chapter or an a in a dismissal and the result will be the same we might get a few dollars out of a chapter seven liquidation not likely but it's possible i guess  once the case is over either if it's dismissed we can immediately go pursue our remedies if it's if it's a chapter seven liquidation we would have the ability to pursue any assets that are not property estate and once the once the chapter seven is in place mr hamilton's earnings are not proper to this day so we'd immediately begin be able to go after that so liquidation here is an option and frankly liquidation is what this if they wanted to get a fresh start to the extent they can this is how you do it this is how you do it this is how you wipe out everything that's dischargeable and now you're left with the one very large nanda startled judgment and you have to deal with it and what this plan does is allows a debtor to not deal with it and to say that that this case good faith because the bankruptcy code allows you to propose a plan with payments over time that really misses the mark and it doesn't address the the case law which to which talks about does there's no there's no stay and this is the st we're hearing of it it's clear that they've made statements throughout that even though th your honor if there were if there if after everything was done the trustee of the chapter seven had one hundred thousand dollars to distribute unsecured creditors we wouldn't get any bigger share it would just simply be pro rata among all unsecured creditors the fact that we have an honest charge case effects and eight and a half year stay of a judgment by the state court where punitive damages were awarded and during that time we're get some we'll get some payments on council keeps saying that this these agreements were post petition that the operating agreement with the indemnity was post petition the operating agreement states it's effect of april two t fourteen the bankruptcy was filed april twenty four so we can't believe what their documents say the employment agreement national employment agreement same thing the a dental came later but at the outset there were these indemnity agreements were there now council made a comment that the hamilton went to bankruptcy so they could collect his assets bankruptcy have a plan that extends out this is not a start of a judgment for years and years and years not even pay in even anything close to the interest on resulting in a claim that is far larger at the end of the plan than it was when the bankruptcy was file that was not a reorganization purpose so the fact that you can check top boxes here and say well the total allows you to do this and we you're trying to do something they don't like it you've got to come to terms with it you've got to deal with this predator and here chapter eleven is supposed to be a negotiated process and it's not metaphor we're just looking at whether the plan was for fair and if you are i think for us for purposes of this hearing the import is that we were allowed to complete deception to get your we had this process in place where there were a series of informal reviews of the plan and the idea is admirable to try to keep the cost down let's see the judge was trying to  see where we could fix the plan so that might be confirmable without incurring all the costs that might be associated with the various discovery we got to the point where we needed to take this coverage of what we took the discovery  we were going to go through the books and records and that's me that was made easy some time or some time i think just i could hear i think sometimes just after the amend the plan was denied confirmation and the court at that point in time said yeah this is fishy this whole arrangement fishy and we may we should look into it and then there was  a period where he said well let's come back and we'll see if you're going to do discovery and at that point he had said well you don't need it so you're on right to my time's almost up are there any questions not one individual creditor there's no doubt they'd love to go to town and snap bank accounts and do everything they could so i think key point is that the court may not be lost on the court obviously three hundred and sixty two dollars is broader than three hundred and sixty two dollars just acts against property it's debts against the debtor and that's why the i'm sorry the terminations of the stay is not affected simply by the release of secure property