this statute codified more than four hundred years of fraudulent transfer law i thought v a tells us that the defendant's transactions were not fraudulent transfers why because the defendants made good are therefore entitled to keep what they received we know that each withdrawal satisfied a debt because of this court's conclusions about the very same accounts and transactions of the same defendant in the fish but trust me the intentional fraud action was not before the court when the same appellants appeared before you went fishing we are before you today on that cause of action and because these appeals relate to the same transactions the courts conclusions and fishman that the defendants had enforceable contract rights become the starting point of these appeals in fishman this court ruled that made off had an obligation to make payments to the defendants because the account documents themselves obligated made off to make payments on a request for withdrawal and each monthly statement created a new  forceable contract right from their account agreements the trustee argues that made ostrov somehow limits in force made up the defendant's contract rights it does not this court rejected that argument and fishman recognizing that the appellant had those contract rights even if they'd all secretly wanted to do the fraud is customers and even if made off stole the money from another client those contract rights obligations and the broker's payments of those obligations satisfied the debt under the statute since the payment satisfied that the defendants are entitled to keep their withdraw the trustee in who's dealt with the special relationship between the broker and a customer relationships pacifically protected by the federal securities laws moreover here the party stipulated that made office also an investment advisor regime within the bankruptcy within the larger bankruptcy context it's a that's sort of a separate a separate a separate situation that spec deals with with the particular case of the sort that the fundamental answer to that is that the simple looks to the bankruptcy code to commute cover property that was transferred before the petition and this was these were all transfers that state what the trustee needs to do is to bring a claim under the bankruptcy code applying ordinary bankruptcy principles and bring that money back only if we successful then simple does not say is ignore the principles of bankruptcy and you and your honor on that point i will just emphasize that the court's decision when the fairfield it is not a project to transfer excuse mistakes are made you have an account you take money out in good faith relying on your statement and years later out of the blue you get sued why would the law penalize an innocent say that your clients got what they were due under there that's exactly what they were do what was stated they were doing they would do the money that the other people were putting on  the court said two things concession it said that the account documents themselves were forcible contracts and the court said also are what they are in fact in two cases this term the supreme court we either way that that the property rights of the parties that exist the preposition always apply post petitions they define the property rights of the parties measure the validity of the transaction at the time of the transfer and that's what we're looking discuss why does a court freshman case doesn't change any of that law for looking at the value question all three judges below to consider this question district judges rake up an angle meyer and bankruptcy judge bernstein ha ignores step by step though clearly applies here their argument is based on the fact that they get special protections because their brokerage customers and what is that special protection given to brokerage customers it is step by step congress's determination that the best way to protect brokerage customers is to make sure that the property customers get to their broker isn't going to pay any other type of creditors in the liquidation disputing it only goes to pay customers and only goes to pay eleven told the trustee how to reconcile claims and they said for each bill my account you look at the cash and cash out from the start date so that's what the trustee did and then what the trustee does is he sues for the for the people who have taken out more than they put methodology of implementing the circuits prior ruling is the correct one and argue that their proposal is not not workable so i'm page fifty one dollars if you turn to their their brief they have what they sort of call  statement and if you add all that up that gives them a starting point of seventy four million dollars which includes years in years of fictitious gains that's basically taking zachary within the statement and giving them credit for that well this court has already said that that's not permissible no customer gets the benefit was on those statements because it was fake so if you ignore that left hand column and you only look at the deposits and withdrawals in the two year period and you get those amounts these appellants would end up owing the trustee twice as much as they do occurred before that time period and so to deviate from this this circus methodology and calculating either not equity claims or the amounts that are owed to the state would lead to arbitrary and unfair results even not convert a diversion of customer property into a valid payment and satisfaction of antecedent debt with the course found is that the accounting documents risk yuri's contracts and the transfers resettlement payments within the meaning of five  f we look at the obligations that the appellants are claiming give rise to value let me tell you why they jumped the obligations don't come from the opposite account open a document the only place that the securities position that they're saying give rise to the obligations i listed on the account monthly account statement and the account stipulated here that there was a curious position never existed that's the record before this court and for that reason for a couple well founded the account statements were invalid unenforceable he said quote in this context the transfers must be assessed and what they really work and they really were artificial transfer is designed to further the fraud rather than any true return on investment for i think it answers the question about whether or not those were paid your honour's the case of the defendants rely upon do not involve ponzi schemes and they don't involve the liquidation they don't provide any assistance here where there's two different factions at issue and a large body of case law that tells us how to deal with the uphold the purposes of those statutes which is customer protection and equal treatment of creditors in the bank if your eyes have any questions i'd be happy to answer them thank you judge walker didn't recognize that there were about the charities contract in there about settlement payments but they never found that there were any and that i take it it's something that goes to this really to the question of safe harbor which is applicable to the and not a that is to say that's what that's what the safe harbor is for as i recall that's correct your honor congress exempted certain transactions from the trustees reach the claims transfer made in connection with the city securities contract and that's that's certainly true here but that transfer made in connection with securities contract does not  previously that because made all securities operated as a ponzi scheme its customers and equity claims under step should be calculated as deposits minus withdrawals customers are only entitled to the return of their principal fictitious profits the defendants argued that to apply this rule to brokerage customers in the made on the scheme would be inconsistent with the bankruptcy code and discoursed decision and fishman it is not fish defendants have securities contracts but one must still ask of the value provided by the transfers under those contracts st courts both under the bankruptcy code and state federal transfer laws consistently hold that a transfer rate cannot provide value for fictitious profits contrary to the defendant's argument this is true even for claims to contractual profits such as in this course decision and silberman the colon and then the th circu decision in jan devi brown's nd this rule is consistent with hipaa which prioritises customer claims and provides for the program the distribution of property to customers over general creditors to allow a defendant to retain fictitious profits allows it to prioritize its non customer claims for fictitious profits over customer claims this would violate the protections it provides  it's consistent with the customer protection rule under a c c of regulations as defending defendants like knowledge in their reply brief customer property exists before the liquidation segregated property under the customer protection rule and after liquidation said the fund of customer property dependents further acknowledge that only customers have a claim to customer property it can't be used for any other types of claims or business expenses so before and after the commencement liquidation customer property cannot be used to pay other debts or claims against the debtor in their reply the defendants argue however that they are entitled to withdrawals from customer property because they can withdraw all fully paid for securit statements do not meet that definition for this rule is consistent with state securities laws to the extent that defendants account statements created security entitlements the u c c specifically these claims cannot be based upon the fictitious account statements made up by made off courts including this one every to use to calculate damages based upon the fictitious profits that i made off customer could have or drawn from other investors st confront that that's what the statutory definition is that was the satisfaction of a debt and as we going back to what i said earlier about the fishman case those were was a liquid agent and in fact the definition of customer property is property held by the debtor at the time of the fire when and that that is so that is why this court in your spare se debt payments which the court which was totally different from the kind of situation that we have here that you're a much to a customer of a broker just me here not in anything then we're not provision is part of the subs to the wall that existed at the time before there ever was a simple liquidation and that is why that applies that controls how does the contract to include must be