to try and reach a consensual resolution tried hard but we did not get there but on the last thank you thank the panel for that and second with the decision of this court affirming the decision of the bankruptcy court which held invalid or asserted lien against the debtors contract in this case and it's proceed that nero's the issues which are before the court this afternoon to the follow up and those are whether the bankruptcy court erred when it held that if r f f becomes an unsecured creditor with an allowed non dischargeable plan r f f would have  payments with the other unsecured creditors during the life of the third amended plan which i refer to as the plan and second that the automatic stay of section three sixty to eighty three will prevent our office from attempting to obtain possession of or otherwise exercise control over the earnings of the plan that the plan i'm sorry permits the debtor to use for his living expenses  various holdbacks or provides to other unsecured creditors on a program or basis the background of this case is detailed in our briefs but to summarize quickly the family partnership is one of many private lenders to the debtor and it has timely filed a proof of claim in the amount of approximately one point seven million dollars the family partnership has commenced an adversary proceeding contesting the debtors discharge from the or if f claim under section five twenty three of the bankruptcy code do among other things to the debtors false representations in warranties and his manifest intent to thus to fraud the family partnership and induce the family partnership to loan the donor money conflicts yes i'm sliced and do both of the now narrowed issues that you present to the court this afternoon depend on your success in the not just charge ability action less to do your honor if the if you lose than on this charge ability action these issues go away and you have no complaint with the bankruptcy court that is is that correct that is absolutely correct so it's part of our argument today that the bankruptcy court opinion was preemptive premature and did not allow for the possibility since the plan doesn't allow for the possibility that our claim will be determined to be non just chargeable and then the issue becomes what our rights are from there the playing field has sort of already been established by the plan as approved by the court and our rights are therefore limited my argument argument is that under law the holder of a not dischargeable plane has certain rights under the bankruptcy code in the way that this is all been set up those rights are prejudiced so while we believe that the court's ruling was preemptive and premature that on the plan it's held in these cards in this context where you have an individual doubt or the confirmation of a plan does not bind the holder of a known dischargeable playing and there's which allow for the enforcement of discharge will claims outside the plant notwithstanding tearing the life of the plan during the life of the plan correct your honor if you look at the case law there is they'll claim leaving behind a student loan holder actually these are cases involving the ira yes but the bankruptcy courts are not distinguishing or relying on specific statutory authority of the r us to enforce their rights it's merely the fact that they hold non dischargeable claims under five twenty three which gives them outside of bankruptcy whether or not the claims are provided for in the plan certainly in that case yes the i r s has filings were made and the actions that they took were post consummation if you will but that is not the language that the court used the court relied on the statutory language and the holdings of the other court cited in that decision which allowed for that creditor to pursue its rights irrespective of confirmation because the planes were non dischargeable but don't get hung up on the newman facts look to the law that supports me with what you tell me correct your honor yes and i think that the decision cited in the in the case excuse me particularly the how case for middle district of florida in one thousand nine hundred eighty eight which states quote under section eleven forty one of the bankruptcy code the holders of not dischargeable debts under section five twenty three of the bankruptcy code are expressly excepted from those persons who are bound by the provisions of a confirmed plan accordingly there can be no doubt that a creditor who has a debt accepted from discharge under section five twenty three cannot be bound by the provisions of a can from plan close quote that's it eighty four b r eight thirty four eight thirty six  that i'm not sure your honor that doesn't sound familiar i apologize that's why i'm not remembering correctly it's our position that to the extent that the automatic stay applies with respect to the debtors post so again i'm not sure the issue is right but all of this if i could sort of bring it back arises in the context of feasibility from our perspective in and getting back to the courts question the authorities that were cited in the decision of the bankruptcy court confirming the plan all were chapter thirteen plans and there's a dead sink sion here in that under chapter eleven to confirm a plan you have to satisfy the feasibility requirement from our perspective the feasibility require it means the chapter eleven is intended to deal with all claims and not just some or part of those claims and particularly where those claims are significant like the r f f claim here a chapter eleven debtor may not pick and choose to address only certain claims or portions of those claims within his plan and prevent collection for the term of their plan to hold otherwise we submit encourages abuse a chapter eleven debtor could file a playing dealing with only certain of his debt and as he or retain his income as part of the estate and then rely on the automatic state to preclude creditor collection action for the life of the plan provided only that he has the support of those creditors being paid under the plan the requisite amount to obtain confirmation without any showing as here of an ability to address the non planned treated debt all of this debtors income for the foreseeable future is dedicated to payment of claims against this the state including my clients claim but it does not address or allow for the possibility that my client will have a non dischargeable claim so it's not that we are being treated or being asked to be treated as a priority claim it's the point i think that we're trying to make is that the plan here effective subordinates or claim and leaves i could receive a hundred percent under this plan i'm sorry couldn't your client receive one hundred percent payment it's claimed during the plan term the other creditors have agreed to cap their unsecured claims correct correct the other creditors have agreed to cap their recovery in certain percentage gaps were met then it would only be your client receiving payment pro rata assuming the debtors continued success in his field and we all hope for that but there is no certainty your honor the issue is what we know bill you require certainty feasibility requires a certain measure of certainty it requires that you be able to address your claims feasibly and if you are allocating as i say the bulk of your value to other creditors and withholding it through the device that exists here from a creditor who may have a non dischargeable claim what is being withheld believe we hold a non dischargeable claim one that cannot be bound by the plan and we ought to be able to enforce that claim in accordance with our rights and there's authority and we cited in the br that that is it recognized right that notwithstanding confirmation of a plan that creditors have the right to hold nondestructive all claimed to enforce those claims notwithstanding the confirmation that penalize other creditors of the debtor by paying out of the pot of assets in the estate law build these arising from the debtors deliberate misconduct on the other hand after discharge which in this case occurs after five years these these law believes such as yours have no priority in payment from the state but would survive his continuing debt after the case the case isn't over for five years so i don't think this case supports what you're talking about i would dispute that theory as articulated by the how court particularly under the facts of this case where our allegation is that the debtor benefited through these loans that obtained from my client and it's through that benefit that this debtor got to where he is and is able to make the distributions that he's making so i don't know that i would characterize it necessarily as penalizing the other creditors we have rights and those rights or have any more rights than the other creditors until after the case is over with the that presumes that we as a non dischargeable claim holder may not enforce our claim until after consummation of the plan but doesn't that give you priority over similarly situated creditors in the point where we have a claim that would entitle us to one hundred percent payment by virtue of its non discharge ability the other creditors do not so therefore they're allocate value based on the structure of the plan so what would happen if the plan said we put your client one hundred percent we believe that that would have been the appropriate result or at least to reserve for in the event that our claim were held to be non dischargeable because this plan didn't do that if you have a time yeah i'm sorry i can answer your question because this plan didn't do that we believe that the plan is fatally in from under the fuse ability requirement were effectively subordinated and we don't believe that that's appropriate under the circumstances of this case where our claim arose on account of the donors fraud thank you good afternoon your honour's record habitat on behalf of the apple the john joseph lewis johnson the third thank you very much for entertaining these arguments today i'd like to lead off with one point  and counsel was up here discussing how they're holding a not just chargeable claim well as we sit here today they don't hold a non dischargeable claim and i think that's one very fundamental issue that can't be overlooked at this point if only because in every single case cited by them in support of their argument there was somebody actually holding a non just start dischargeable claim whether that was by statute by reason of taxes whether that was by reason of adjudication in a non just charge ability proceeding in each and every instance there was somebody holding a non dischargeable claim and i think that's an important point because they're saying that the court bankruptcy court here was being in essence a preemptive in in  confirming the plan and not providing for their non dischargeable claim to be paid or not allowing for them to to in essence go after plan assets i think it's the other way around i think that it's r f f in fact being preemptive because they're assuming that they have a non dischargeable claim with respect to sort of the narrowing of the issues this case is very similar to the one in eagle pitcher and it's a six circuit case i believe hundred three on equitable mutinous and what's going on here is very similar to what happened in that case in that case there was a creditor that was opposing confirmation of the plan and in particular they were arguing that the plan was not feasible because it created in a specialist trust and they argued that claims couldn't in essence be channeled and i believe this is one of the earlier cases in which that occurred so they said look this case is not feasible plan should not be confirmed when they were faced with an equitable moot argument they said whoa let's back off let's narrow these issues down and we only want to focus on the procedures by which distributions are made in this case and the six circuit there and admittedly this is a unpublished opinion so it's of limited presidential effect but i think it's illustratively where the six circuit head is at here they said look this this this attack that you're having on the distribution procedures is affecting the reliance interests of third parties here and by affecting the iranians interests of third parties here we have to find this appeal equitably moot because you just can't do that so i think we have a very analogous case here we have in essence our effect coming in and saying judge don't confirm this plan it is not feasible and then as you read through the briefs and as we get here today they're backing away from the issues but that doesn't change the essence of the relief they're asking and i would like to correct one point because because they did talk about the reliance interest book brief and that was at page ten of the reply brief where they're essentially saying that look all of the settling creditors here went in eyes wide open knowing fully well what could happen on appeal and in doing so they care they cited pages seventy seven and seventy eight of the transcript well that portion of the transcript in the discussion there in was a discussion of the secured claim and not of the non discharge ability action that wasn't brought up in terms of feasibility that wasn't in eyes wide open issue and i was wide open issue that everybody knew about was that the the fact that the secured claim could in fact be up hell that's the claim in the player's contract that's what everybody knew about going eyes wide in and i think that was a fair characterization but but not a fair characterization as presented in the reply brief i'd also like to note that in the cases that they're citing newman as the court pointed out or the panel excuse me pointed out is an i r s case the the plan was consummated the plan payments had been made after the case was closed the i r s went after additional taxes that accrued post petition i think that's important and even when you look at the cases cited within the i don't think any of them give any support for the case here for example bartle son in that case there was a creditor holding in not just charge debt that was allowed to collect where the plan did not have an injunction against it so the plan didn't prevent anything from going forward there's the case of broad b and in that case the court held that eleven forty one  did not operate to prohibit enjoining collection collecting non dischargeable debt that was the issue and then remanded the case for findings on an injunction another case mcconaughey  the plan essentially provided excuse me the attacks on the plan income excuse me the the attacks were after the plan was confirmed all the plan payments were made and the case was closed so again very readily distinguishable here and then howell which seems to be the discussion of the day i would agree with the panel that it does not support the case here in howell what happened was there was again a holder of non dischargeable debt and the plan provided that this claimant was going to get paid to the tune of three hundred dollars a month increasing to five hundred dollars a month and then sort of carrying off into perpetuity until the non dischargeable debt was paid in full well the creditor there said wait a second we can't do that because you're limiting my ability to go after non plan assets essentially and the court said you know that's right these sorts of creditors creditors with not dischargeable that have the right to participate with other creditors ok and that's certainly what the plan here does in our case and then after that though you can't tie their hands after the plan is already run its course you can't just say look if you're going to accept these payment terms into perpetuity that's what they were trying to do and how so i would think that that all of the cases that are cited in numan which itself is readily distinguishable just don't lend itself to support here  you know and i think we haven't really gotten to the discussion of you know the actual statutory provisions that are at play here and what's going on here is expressly permitted in the plan eleven forty one be expressly provides that if there is property of the estate it vests in the debtor upon confirmation and the less the plan or confirmation order provides otherwise we'll hear it provides otherwise and so as long as it's property of the estate we look straight to three sixty to eighty three that protects it from creditors so long as it's property of the state and then obviously once you get to three sixty to see when the property is no longer property of the state or ultimately if the case is discharged or closed or dismissed then the automatic stay goes away so as judge hoffman found each of these statutory provisions were put into effect in the plan it's well within the right of the debtor and the reason we did that the reason the court approved it was to protect the plan assets to enable the plan to come to fruition and i think that's really important because at the end of the day what we have here is a plan that has implemented more complicated settlements than i can articulate standing here to this  panel the court went to great lengths to denote how much was settled here how contentious everything was and as we stand here today things continue to unfold in terms of settlements e o t which was a holdout at the time of confirmation and was a holdout and briefing closed has in fact settled so we now have settled seven of eight of the largest claims all pursuant to the plan provisions we're now left with r saying that the equitable argument relies primarily on the structure of the distributions that the bankruptcy court approved in the creditor body has relied on that process or structure irrespective of what the dollar amount end up being at the end of the day is that reliance yes you're on are you make this is that correct yeah i mean certainly reliance is a component of the equitable mood and to terms and are in fact relying on this plan so now you know the court the panel here is faced with a couple of options do you reverse the you know do you say look the plan wasn't feasible and in which case you have a wholesale reversal well i think that's a absolute travesty to hold the reliance interests that have been sent into effect by this plan so what's the alternative that i guess the alternative would be to know the issue and say ok we're going to interlinear at the plan and say that you know what if there's a non dischargeable claim here for our f f t they can go ahead and attack plan assets well i would submit that that's creating a feasibility issue on it on its face because you have all of these creditors that have submitted in the trial court that the plan is feasible because they know they're going to get or reasonably believe they're going to get the promised payments but now if  our offense is allowed to attack plan assets with impunity well i would say now if feasibility issue was created so i don't think any way you slice this it's good for anybody under that plan and you know again i come back to the point of the settlements were complicated this was a hotly contested case it continues to be a hotly contested case with our effect to this day but the fact remains that seven of eight of the largest creditors twelve roughly twelve fourteen million in claims are now settled adversary proceedings have been resolved not discharge ability actions have been resolved the creditor trustee has taken over the creditor trustee is liquidating assets the creditor trustee is settling actions of his own this case is far down the line and a lot of people have relied on it and it is an ugly ugly case and you know don't take my word for it don't take my word for it all the judge went to couldn't contests this hockey player income separate apart from his wages something that's not carved out in the some no because all income is is subject to a plan all income that's the way the plan reads so wherever he's getting it from whatever source it's used to pay the creditors subject to the do it the  living allowance in the plan so if he gets an endorsement inheritance whatever it's also lottery lottery would be just fine so those are a pup really why the living expenses that were given to at the end of the day that might be part of it but it doesn't matter what they want to attack because the court found that the living expenses though they were high and the court said you know relative to judge hoffman's experience it was high in the court was readily apparent readily  open that he struggled with it but at the end of the day we have to look at it as the means of enabling the debtor to continue producing it's like putting working capital into a business and i think at the end of the day that's the analogy to draw and indeed the creditors that were at the confirmation hearing recognize that what he's receiving now is actually less than the minimum starting salary in the n h l so he's doing his part and our effect is getting what our if f is entitle to under the plan that is pro rata payments if they ever have and allowed claim the money will be there for them and if they haven't i'm dischargeable claim there is nothing in that plan that's prohibiting them that is that is affecting that non discharge claim in the sense that it will survive and at the end of five years if they have a non dischargeable claim well that's something mr johnson's going to have to worry about that and that's the way bankruptcy works if you get a non dischargeable claim sorry game's up no pun intended but again i come back to the point that it was a very complicated case it remains a very complicated case these settlements are in the best interest of the state as judge hoffman found the significant reliance interests don't take my word for it you know you can look at the three hundred page preliminary witness expert witness report that was going to go forward you can look at the captions of the many filings just the captions in the case to see how contentious this was and i think if anything disrupts this it's only going to be bad it might even set this case up for a conversion to chapter seven which r f f said in its own words would  return pennies on the dollars we all their words not mine and as we all know the debtor tried to convert his case early on it did not work and one of the items that the debtor was scrutinized on was his failure to pursue a plan or here the de not only pursued a plan the debtor has confirmed one so if we're sent back to the bankruptcy court on reversal i don't know what's going to happen but it could very well set the case up for conversion thank you thank you i was in the brief time that i've got left i would respectfully direct the panel to the reply brief that we filed i think that they had details in exacting fashion our response to this news argument but there is one point that i'd like to highlight actually a couple of points first with respect to the fact that we do not hold at this time a non dischargeable claim we concede that certainly but nonetheless our point is that by foreclosing our ability to obtain what we believe to be the relief that a non dischargeable claim holder has that this plan violates the feasibility requirement that's that's the point of appeal and i think as as a police counsel just made clear they've tied everything up here there is nothing available for my client and because of the fact that this de primary income is derived from contractors as a professional athlete there is a good likely particularly in a sport like hockey there is an absolute likelihood that there may be nothing for my client this has been set up in a way it i would submit it's it's an artifice in the sense that they made his living expenses to remain part of the estate those funds as as part of the estate there is no moment when those vast in his hand they are until they're paid to the creditors his current creditors and so this