the peril members that had some discussion about whether there is a problem with jurisdiction in this case this appeal was taken as an appeal of the final order it was not  in the course of getting ready it came to our attention that there is actually a split among the circuits as to whether an order that didn't ask confirmation of a debtor's reorganization addressing it in your argument and if not we're not we're just a word to use it it's on am and while we're not requiring that anybody anything additional if anybody wants to address the issue we'd appreciate you doing it with a brief of no more than five pages in about a week appreciate that from the court i'm not prepared to discuss it today because it wasn't one of the elements that we researched in preparation for today well we do want to hear your argument on the merits of course eager to hear that it's an interesting case on the merits as well if i may michael fitzpatrick or the expression of changes in the bankruptcy code in two thousand and five after many years of work to get to that point the center point the master piece of that legislation involved consumer cases that was perceived gaming of the system by consumers and a failure of consumers to pay what they could reasonably pay to their creditors within the bankruptcy system between chapter seven and chapter thirteen and all of the legislative history that's available in respect to discussion of the statute and its changes is in the context of the consumer case the often quoted statement that judge terry used as well about the primary purpose of these changes was to have debtors in consumer cases pay more than they have traditionally been paying within the bankruptcy context however congress went further it made changes to chapter eleven almost all of those changes relate to the natural person within chapter eleven we don't know from the history whether this was a unified set of changes or whether they originated from diverse locations so we do not know whether there was an integration among the draft there was a separate analysis of how they affected one another the changes that primarily bring us here today are the creation of section eleven fifteen and then the amendment of eleven twenty nine b two b t interrelated to one another the argument on behalf of the appellant is that the language chosen in the creation of section eleven fifteen and the similar language shows in the amendment or alteration of the and equitable requirements on what we call cramdown mean without question that the absolute priority rule was abrogated by these changes the absolute priority rule has never been absolute and it is never been in effect with complete continuity it was a judicially created requirement after the civil war during the railroad bankruptcies where shareholders were seen to be taking advantage of creditors in the reorganization process once we got to the one nine hundred thirty five act which is the core real codification of a unified bankruptcy system you have the same requirement under old chapter roman ten an old roman eleven that reorganizations be fair and equitable but what you did not have within the statute was a statement of the absolute priority will it continue to be a judicial creation of the specifics of how you get to fair and equitable when you get down to the l a lumber case you have the expression of how you deal with the absolute priority rule if you wish to retain ownership as a stockholder there is an exception a corollary as the court is fond of calling it to the absolute i already written in one nine hundred fifty two i believe congress reacted to the judicial requirement of the absolute priority rule in the chapter roman eleven cases which would be the individual chapter eleven and the closely held business chapter eleven that specifically abrogated that you dish will overlay of what is fair and equitable there isn't one that when you say that when i made that change there didn't do it a little more directly and obviously than what seems a really interact is about the best you can say yes even just a direct link and his legislative history was direct on why  doing and then has what do we do with that reality when we're thinking about your argument today this is a a strange area of the law in respect to bankruptcy because when you come to nine hundred seventy eight i'm going to come to your question a little bit priority rule but did not pick up the corollary and so standard interpretation of statutory analysis would be that that's gone because it existed congress is charged to know it existed and yet it came through it's not expressly stated but it that they're not going to read the bankruptcy code to abrogate past practice under the code absent some clear indication in the tax that congress meant that i mean what proposing is i mean let's start with this you would agree what you're proposing is an abrogation of the absolute priority for an individual chapter eleven cases right unequivocally that is the are ok and i appreciate that straight answer so you have to you have to grapple hamilton you know and somehow show that what seems to be sort of a convoluted mechanism here is nonetheless a clear indication that the abrogation was intend liverpool but i thought when i was asking a question earlier you seem to be acknowledging it was indirectly done no what i meant by that the history as we progressed through the rule is that congress has never been very clear in respect of this area of this part of the law it has had an ebb and flow that has not been within the discussion in the legislative history either in the seventy eight major change to the absolute change in the law and as we come forward with the supreme court in respect to this piece of the bankruptcy system and i i must admit to the court that the reason it is that unnatural kirsan is different than an artificial into tea at the end of the day an artificial into tea can be destroyed it can go out of existence but we don't have that corroborative with a human being so if you destroy the capacity of the individual there's no separate resources o shareholder to go on with life but it was in that same problem present before these amendments and it wasn't some insuperable practical problem right they were but the debtor at a resource that the creditor couldn't have unless they worked with the debtor and that's the stream of income the debtors who are achieving chapter eleven success before these changes had income now in the farmer case of a litters it was an unreliable income but we're talking about a highly compensated professionals captains of industry lawyers accountants doctors more often than not and the creditors couldn't have that subsequent stream of income until the change in the code and if they wanted the that's because property of the estate under section five forty one is limited to three to assets of seven or two thousand and five the stream of income unless it derived from the assets of that exist that are running of the case was not property of the case wasn't for  commercial or individual cases right and so then they they passed these amendments and we have section one thousand and fifteen or eleven fifteen yes and i understand your argu about includes a normally that's you know serve broad term but i mean if you read this provision subsection it says the it's a property of the state includes in addition to property specified in section five specified and wanted to and not those referred to in the clause in addition of properties specified in section five hundred one and which case is and isn't the property that is included just property specified in section five forty one column property of the estate includes one and two what i view right then to say that the only objects of the word includes here are one and two and last we  ambiguity rather than a clarification of the interplay between five forty one and eleven fifteen i don't think it makes it better i think it makes it less clear ok but you say you'd acknowledge the one he just rephrased that would be ambiguous but the current language is unambiguous that's my position yes  and you agree you're in trouble if it's ambiguous and i'm not going to lie to the court but i haven't heard if you have a substantial change in existing law to show what congress intend problematic for you of the absolute displacing a pretty solid feature of bankruptcy law absolute case of one same page there yes but the other thing i think you look at is what is the common usage of this word and we have some some he respect to that section one of two of the code for instance and it seems to be just glommed over what is one of these words mean in the context of where they are used congress didn't use adding if you'd use added we wouldn't be here today i don't think any of the courts would have had to put up with this issue tom dickinson on behalf of mountain national bike and pinnacle bike and i would advise the court at the outset that mountain national bank has been put in receivership i don't know year what party holds this quantum and as soon as i do no one is requiring anyone to file briefs but keep in mind there is a certification option that if there were a jurisdictional call today could it be ameliorated tomorrow appreciate your honest comment on that anyway i think the issue before the court can be decided by just looking at the plain language of five different statutory provisions in the excuse me if i'm if you will meet three but it helped me to walk through it and i think it will help you to acquired property that's where section eleven fifteen enters which was introduced in two thousand and seven only applies in individual better cases and the definition of property of your state  expanded to include two different subsections which your honour's have already been referring to and the use of the word there is includes and there is a statutory provision within the bankruptcy code as rules of construction and the war includes and including are not limiting phrases so then you go to section eleven twenty nine and section eleven twenty nine cars out some language for individual debtors and it uses the word are included congress has the need to know what the law is when they make a new law and i think it's very telling in this case that they used the word included in section eleven twenty nine and didn't use of elsewhere and because of that i believe that the word included is is designed to refer to only those portions of property that were added in the initial discussion at pase six seventy seven and this is dealing with section thirteen no sit with the chapter thirteen but the language and thirteen no six that we're dealing with there is the same is the language we're dealing with here with immaterial changes and the court say that section thirteen zero six a expressly incorporate section five the wording one read together section five forty one thinks is property of the estate as of of filing while section thirteen zero six adds to property of the state property interest which arise post petition so i think this court has previously recognized in a very similar context that the use of the language in the statute that we're arguing over just means that there was some property added and that's all it means and therefore i don't believe the languages and big was at all in the cour statute and has to be expressly study so is there an absolute priority rule in chapter thirteen that there's not an absolute priority of personally that you have to commit another payment to creditors that they would receive the same amount of money that they would get in a chapter seven liquidation case over five years so i would say to me it's kind of a cause i absolute party rule even though it's never been call that right but it was let's just say for the sake of argument there isn't one  does it make sense to then have one in chapter eleven is what's the function of that because chapter eleven the debts are higher and that makes sense out of it or what's the there's always been except between that time frame of n fifty two and not being seven to get it there's always been an absolute priority rule that applies in chapter eleven cases and nowhere else so that's the norm is your point that that is the norm and and what's the explanation for the norm given that is it just a function of the fact that in chapter eleven for individuals there's more deaths and therefore you're going to be stricter williams to the junior creditors historically until the section was interpreted to say that individuals can f a chapter eleven case historically chapter eleven was used for businesses and so it obviously made more sense in that context but when the courts interpreted chapter eleven so that an individual better could take advantage of the provisions of lose you're saying you don't think it's coherent i'm not sure i understand i mean they're both individuals chapter thirteen in the individual chapter eleven for both individuals and i thought one of the points that palin was making or these some of the courts have made which is a way to look at this is to align them so that there's no absolute priority rule for individuals and either setting and the only question i had was well maybe if the way you get to chapter eleven as opposed to chapter thirteen is you've got more debt there could be a reason to be more protective of creditors in chapter eleven as opposed to chapter thirteen i don't know i'm just trying to make sense of it well i don't know if i can make total sense of it and there have been many commentators that it's saying that the amendments that were made in two thousand and five are not a model of legislative clarity but i just think that the absolute priority rule is so imbedded in the chapter eleven jurisprudence that it's foreign to chapter thirteen you've got specific rules that apply to thirteen creditor don't get to vote in a chapter thirteen case but that's the difference between chapter eleven and chapter thirteen if you're an individual you know just know that well if you're in chapter thirteen you cannot have a plan that lasts more than five years in chapter eleven you can have a plan that lasts for many many years but i thought of ok that's interesting but i thought there was a it was an amount of debt that told us there is that there is an amount of data you have to be under the debt limits to go into chapter thirteen i mean there are no debt limit ations in chapter eleven what is that debt what is the debt limitation oh it changes every year but it's somewhere around three or four hundred thousand dollars unsecured for individuals in a larger amount for security missed that it was white over that amount the last point out of my before i turn this over to the other council is congress knows specifically how to deal with changes to the absolute priority rule they did it and that thing fifty two eliminating the judicial created absolute priority rule they reinstated it in one nine hundred seventy yeah so we've got a long history of congressional action on this point and i don't think you can infer or imply a change from the of his own he's his own trustee he doesn't have a wage order like he would have in a chapter or he can go out seven or eight years he has to follow disclosures by a much more lengthy play in explaining to his creditors much more than you do in a chapter thirteen of how i'm going to pay you and how i'm going to generate the funds to pay those powers as a trustee or significant he can set aside conveyances he can choose not to set those aside you know what are these produce your duties are under the code he has the power to set aside preferences and in that he can also operate his business without necessarily the control of a trusted so with those additional requirements  something else with it if you're going to do that you don't need to do that it's a fairly new chapter thirteen you don't have a trustee in place for the entirety of your plan for that very six to sixty minutes she's going to take your money and pay your creditors in a chapter eleven more times than not you do not have  these debts are never released you just that's the point you just you have to payment some point in that we're not going to make you pam this year we're not going to make a payment five years but the effective out super are effectively you have such a rule by saying you know you're living in an individual if you don't know if you make more money you're going to have to pay this off if you don't have an absolute priority with the right the way that this election has been rewritten then actually in chapter eleven you could probably play less than you could thirteen because you don't have that absolute priority rule which means that if you're prepared to an asset is whatever that property is if you don't have to pay your creditors in full and all you've got to do under eleven twenty nine a fifteen part two of that is pay your projected disposable income over for at least five years and you've satisfied that part of the test without that absolute priority rule if that's what the court rules of that that stay the statutory changes ever get the absolute priority rule it will be the result which is inconsistent with the bankruptcy abuse prevention act it will actually reduce what it did or has the pluck to pay in a chapter eleven and i think the dissent in the friedman case of the ninth circuit illustrates to happen if you say the absolute fraud rule doesn't apply to chapter eleven with these changes because it isn't your telling that chapter eleven debt or you can keep your preposition property and you don't have to pay any more than what you would get chapter seven plus whatever your projected disposable income is for five years and if if congress wanted to there to be just chapter thirteen it could have say it individuals can't file chapter eleven and get rid of these that respectfully on the last point i would disagree with mr winchester and to a certain extent a comment made by mr dickinson there is no absolute priority rule in chapter thirteen the requirement to pay the value of assets that would be paid in litigation in chapter seven is not an absolute priority rule and that requirement was before two thousand and five and is still a requirement in chapter eleven so in order to keep an asset regardless of the absolute priority rule if it has value in the market place above liens and exemptions whatever that value has to be paid to creditors in chapter thirteen or in chapter eleven before we talk about the absolute priority rule what the absolute priority rule does is sa tennessee he has extreme health issues the likelihood of him surviving his spouse is nil unless he's run over by a truck so the value of that in the marketplace is very small but yes to pay that value whatever it is but the fact that he keeps it means he's violated the absolute priority rule and yes pay a hundred percent to his unsecured credit but i guess on that point i mean as i understand it i mean he proposes to keep an extraordinary amount of titian ass isn't that but he must pay the value of those assets in the market place to his creditors without any consideration of the absolute priority rule whatsoever it's one of the requirements of the plan eleven twenty two point is so that's how in the protection of credit as well telling liability of the current majority rule in chapter thirteen you could to keep your assets and pay their value plus a stream of income for a period of time under the means test but in chapter eleven you paid the same amount but if you keep the asset unless you can meet the corollary to the absolute priority rule us lumber corollary you may not have a confirmable plan so you pay them they are you but unless you can find a resource mom or dad to invest new money you can't keep anything even though you have paid it's that that's the problem with the majority rule that's the problem with the absolute priority rule in the individual case there's no shareholder with money but i was when i heard that where all the reports pre two thousand and five or even pre the split sang about how the sky's falling with respect to all these chapter eleven is for individuals where where is that i mean you're saying that in light of the split this is the weakness in this one side of the split and i'm asking you since that will predated zero five where's the where the policy papers in the legislative history that says gotta get rid of this makes no sense economically there is no legislative discussion forget that just happened in the marketplace is the income stream at the two thousand and five law changes demanded this chapter eleven individual pay to creditors was not available to the creditors before so if i'm a lawyer and i filed bankruptcy and i get a case in that's worth a million dollars a day after bankruptcy that one third contingency is not available to my creditors unless i choose to make it available just so that's my quid pro quo just one last question i'm not sure of my i'd you seem to know which talk about i'm not totally following it are you making the point that in zero five the reason there's no such story of we're talking about taking away from creditors the payment on the retirement plan loan right well that's been official to debtors so it wasn't all for the creditors so we had the situation and my time is up and i appreciate the