number thirteen one eight nine nine saab automotive a b and others versus a general motors company arguments not to exceed fifteen minutes per side mr chu for the appe respectfully seek to reserve three minutes for rebuttal as the court is aware this is an action for tortuous interference with business expectancy versus defendant up an apple e g m which intentionally framework agreement with young men on false pretenses we respectfully submit that the district court there first the framework agreement shows a valid business expectancy specifically pursuant to section one page five of the framework agreement young man was to provide an immediate cash infusion of ten billion euro which would have saved the company which otherwise went bankrupt the very next day it was that payment your honour's rather than the framework there would be this infusion of cash and if that's the case how can you argue that there was a for media expectancy your honor i put the page five framework agreement says that the ten million euro was an immediate that was to take place on december sixteenth your honor is absolutely correct that for the first two hundred million the remaining hundred ninety million other agreements had to be made and contrary to what apple e says in their papers those agreements did not have to be made over the weekend there was a deadline in the framework agreement of december thirty one two thousand and eleven which gave the parties sufficient time to make those agreements moreover again contrary to what g m is said in its papers the regulatory approvals that were contemplated there was no deadline in the framework agreement but the framework agreement provided that the ten million dollars was on can was immediate and uncondition and you argue that that ten million was a two million dollar the ten minute million euros or million euro so if and you're arguing that the ten million euros would have prevented the bankruptcy would have prevented what happened the next day and your honor raises of the next one question one we think for discovery as to what would happen after that and there certainly were things that had to happen but it's our position that we had sufficient time to do that but when you pled this and i don't have the complaint in front of me at the moment when you played this did you break it out that way or did you clean the framework agreement as a package while your honor i think it's i think a fair reading the complaint is it's both in there that the framework agreement itself was evidence of the business expectancy which contained an immediate ten minute ten million euro infusion and that's more tangible as your honour's know what was what was causing what was deemed to constitute a business expectancy and will capital which wasn't even reduced to writing this was a very sophisticated document prepared over several months in which g m was involved remember your honor that g m was involved mr mueller had negotiated several deals with young men and others during that summer and kept in contact constant contact with g vetoing them saying no you're going to use legacy technology no this chinese entity is going to have some ownership interest so finally mr mueller said fine we will draft something that makes it very clear that legacy technology will ever be seen or own by young men and that the joint venture will not become a joint venture in which the loan converted in young men became an equity interest in less than until the atlanta and the vs a expired and unless and until saab developed its own technology the phoenix platform and that is crucial your honor because the agreement was drafted very carefully that the chinese would have no access to the technology and no ownership of it and if it's in less than until the phoenix platform which was all sobs technology there's no dispute about that whatsoever your honor it was only upon those contingent events that the joint venture would would would come into being or you to proceed further you have to show not only there was a valid business expectancy but that there was an intentional act on the part of g m that is true and doesn't g m as a public corporation have the right to discuss publicly what sort of weren't the fair comment conditional privilege doesn't apply where is here the parties were not proper parties and it was not disclosed in a proper manner to proper parties here were proper parties only we would respectfully submit that the proper parties here were sob spiker and young men it would have been one thing if mr gursky who was in constant communication with mr mueller had said look guys i don't think this does what you needed to do instead what they did is they went out and they made a public press release and then to twist the knife even further your honor they gave an interview to a swedish newspaper where they made false statements and these are small false statements of fact  and entailed a change of control and or ownership they knew that was wrong they were intimately involved in the process they knew that this was a brand new person agreement to they knew full well that the framework agreement did not entailed a change of control and or ownership i mean if your honor has read and i know your honor has the framework agreement they bent over backwards to make clear that under no circumstances could the framework agreement be construed to give young men ownership or access to the legacy technology because we also admit we all stipulate that the atlanta makes it clear that that can't happen vs and the atla and theoretically that could have gone on if g m had wished one of those agreements could have lasted till twenty twenty two thousand and twenty four in which case there would have been no change of control until then so this was a contingent deal these were hypotheticals situations which may not have come to fruition and young men took that risk it may have come to fruition and that seems to me to hurt your argument that g m makes some kind of  materially inaccurate statement well your honor it was inaccurate and they knew that it was inaccurate to say that this was just like all the other deals and that the own the change of ownership had taken place the change of control had taken place they knew very well that the change of ownership had not taken place and had not commenced there is we have a dispute here on the the meaning of the word to commence it means to begin the change of ownership never began if for example saab had never been ready to roll out the phoenix platform young men would have gotten anything they wouldn't have gotten any ownership interest they wouldn't have gotten anything out of the deal and they were willing to take that risk because that's the only way and g m made it extremely clear that the only way this was going to work is if the vs and the outlook were not implicated so there was no change of control it never be canned or commenced near you're  saying that the g m statement itself specifically says that the change of control had occurred yes and that was that was crucial and the other false statement in answer to just saddam's question was  james cain this wasn't an accidental statement this was g m s official spokes person and he another thing that he said is that they could no longer provide the legacy technology under the b s a and that that meant that sob was out of luck that was a way to twist the knife they didn't have that right under the vs say they only have that right under the b s a if that change of control o wnership had taken place or if young men had access to the technology they knew that was a lie and that's not proper they're not allowed to do that and that was the knife that they stuck in the back of of sop they knew exactly what after someone like a person isn't politics you know pundits doing this i get up lies about we can't speculate entirely as to their motives and we don't believe mr mueller doesn't believe that there was any personal animus in fact he had good relations with g m i think what the what the motive was as far as what they publicly stated they got rid of it that's it they didn't want sob competing in the chinese market there were all kinds of contemporaneous statements by the same spokesman james came and in the the annual reports of g m that the chinese market was absolutely crucial to g m they sold more buicks in china than they did in the united states this was a way to keep saab out of the chinese market so it didn't have to be personal animus it was a business reason which was improper only because it was a complete and knowing misstatement of what the framework agreement did and they waited till the last minute and they sprung that on speicher and sob and your honor that's what it is is tortious interference with with business and i think that's where with respect the district court went wrong because it concluded in interpreting the contract that g m s reading of the contracts were correct and therefore if that had been true then i would agree there was no malice but it's clear your honor that they did misread the contract and if i could just in my remaining few seconds before my three minutes of rebuttal the framework agreement says quote the change of control would occur only upon quote the start of sale of the vehicle version based on the phoenix platform whereby saab no longer has a need to rely upon technology granted by g m that's in the framework agreement at section seven page eleven record one dash for page one thirteen i don't know how anybody could have drafted that more clearly remember it is undisputed that the phoenix platform developed soley by saab and it was only if that phoenix platform was prepared and ready for sale that young m the joint venture would come to fruition and they would have ownership part ownership of that but that had nothing to do with g m legacy technology because by that time the outline the vs a would have been extinguished and young men was morning your honor sir i'm catherine kerman i am representing general motors i want to start with the question of whether the package of transactions with young men as reflected in the framework agreement would have initiated a change of control in february of two thousand and ten saab spyker and jim negotiate a complex set of agreements reflecting the sale of saab there these were three sophisticated corporations and the various agreements they executed back then reflected that sophistication one of those agreements was the atla in the automotive technology license agreement and in that agreement in section twelve point three saab agreed that g m could terminate its technology licenses which were necessary for s to be able to continue to make and sell its existing line of cars saab agreed the g m could terminate those licenses immediately upon even the start even the initiation of a sale of assets or a change of control and importantly your honour's the clause refers to a change of control of the company not a change of control in g m s ip or technology sub did not require that g m could terminate the licenses only on an actual sale or an actual change of control saab agreed that g m didn't need to wait for that they could terminate as soon as an action was initiated importantly sub also did not say the g m could terminate only if the change of control the actual change of control would happen during the license terms saab agreed that g m can terminate at the in the at the initiation of the change without regard to whether or when an actual change of control would happen and saab did not require that g m had to have any particular reason or justification for exercising that discretion there were no limits placed on jim's ability to terminate him to terminate for any reason and this is what sovereign spiker agreed to when they purchased saw from g m mr jim crimes that they were ready the deal they ultimately came up with on the night before the bankruptcy hearing did provide that that the last vestige of saab the part of it that use the g m technology would not transfer to young m intel i think the word is they started producing their own car so it was structured to try and you know sort of spring up after the licenses would have expired that was the way the lawyers tried to get around the problem was i think there's two arguments about initiate here your honor the first is this the right that young men got to have that seventy percent equity interest spring up was created and defined and stepped forward in the framework agreements and the other contracts that were required to go along with that that would have happened as of the day those deals were signed that in and of itself is initiation that's the stark it's not the actual change of control but it's the start create your honor so there's much more if that was the only thing that the parties had agreed to and on december million pounds but didn't the framework agreement contemplate or require action the european honor this this argument that we heard this morning about the ten million dollars being the expectancy the median ten million dollars was not pled below it's not alleged in the complaint the framework agreement was finalized on the afternoon of friday the sixteenth that was finalized on that day in the afternoon it was not executed on that day it required ten additional contracts being negotiated and executed as part of a package it's stated on its face that all of that it was the parties intent that all that be done by the following monday because on monday the bankruptcy administrator who sob and young men had no control over had said that he was going to put the company into involuntary bankruptcy so young men in sudden spiker understood that it had to be done by the sixteenth now in the in addition there are the regulatory approvals sob needed to obtain the approval of the national debt office of sweden needed to get the approval of the bankruptcy administrator and needed to get the approval of the european investment bank which by the way the complaint alleges had previously declined to grant approval to a different transactions as proposing more importantly young men had to get a series of approvals from various chinese government regulatory agencies and in the briefing  suggest that those that those opposed didn't need to happen before the closing on the contrary the framework agreement specifically provides on page id one fourteen that the that the preconditions to closing include regulatory approvals and regulatory approvals are defined in the next line as all of the chinese governmental approvals now the fact that saab and young men may have given themselves ten extra days you saw in the briefing they said well the bankruptcy hearing was set for the nineteenth but we agreed in the framework agreement that neither side could walk away provided we got the deal done by the thirty first there's no allegation that the bank's administrator would have gone along with that there's no ab allegation absolutely at all that that would have been acceptable to the government of sweden so to say that we had agreed that we could give ourselves more time isn't the point they were against the gun of the bankruptcy administration while i'm on the sort of unlikely unlikeliness of the expectancy i do want to talk about the ten million sort of a new pretty expensive i heard about for the first time this morning a couple facts about that in the complaint first of all mr chu alleges that that would have been paid on december sixteenth december sixteenth was the day that the framework agreement was finalized jim didn't make the two statements at issue in this case until december seventeenth so obviously the money hadn't been paid on december sixteenth for reasons that we don't know it's not in the complaint they've never focused on this ten million before but it didn't happen reasons i think it may not have happened we do see where in the initial pleadings is the fact that the statements were made to the seventeenth it is the statements or alleged complaint paragraph one twenty eight page id twenty one and twenty two and then complain paragraph one thirty two page eight hundred twenty two and i believe the date of december seventeenth is is reflected in this complaint allegations at the district court level the  the court concluded that g m did this that this set of transactions did initiate a change of control and therefore g m did have the right under the outlaw to terminate and therefore it's statements to that effect couldn't be false and were a legitimate exercise of business i don't think the court went much further than that i think what your honor is getting at is you know sort of a question about the legitimacy of business motives is that a little murky does it get a little factual as or factual the factual dispute i don't think the judge green got there and i don't think this court needs to get there i think there's sort of a number of independent legal defects in this case before you get there i will say that the complaint and we made the argument below although it didn't rely on it the complaint is devoid of any allegation of improper motive other than the allegation that g m didn't want its competitors in the chinese marketplace to get access to its intellectual property i suggest to your honor that that standing alone is not this is not a fact that if proven would establish the kind of  fraudulent or unethical or wrongful kind of motivation that generally is required for tortious interference then you want to come back to the initiation because i think it's an important point subud like the court to focus on the world as if there was the world on december seventeenth when these contacts were executed but nothing would happen as far as young men was concerned for years and years young men would sort of take a seat in the bleachers and do nothing with respect to controlling sob until such  started producing its own cars and that's quite actually far from the way the framework agreement was structured in fact the rest of the framework agreement all of those other contracts that needed to be negotiated in sign described a whole series of events that would happen immediately every single one of which involved transferring from saab to young men assets and rights and control to the parts of saab that didn't touch on g m s ip and it's what it's worth citing them your honor certainly in the preface of of the of the framework agreement paragraph f which is on the first page page i do want to three it refers to the goal is to get two young men from saab all of the technology that can be transferred and the complaint paragraph one eleven actually alleges that the deal was structured to transfer all the parts to young men except the general motors elect intellectual property but then if you look at the list of other contracts that need to be negotiated immediately there's at least five of them worth noting before the framework agreement saab and young men had already formed a joint venture it's referred to in the framework agreement as j v be and they each owned fifty percent of anything that was contributed to that joint sub immediately had relinquished control of fifty percent of so in the framework agreement the proposal was that there would be a share transfer agreement pursuant to which would transfer all the shares in its contributing an entire company into the joint venture relinquishing fifty percent of the ownership there was an asset transfer agreement sop transfers all the assets of south engineering another corporate entity that did all the engineering of the saab vehicles transfer immediately into the joint venture there's a j v technology license agreement saab licensed all of it's from meaning technology everything not covered by the g m licenses to the joint venture and then there's the trademark license agreement and an agreement called the t l a three which also the execution of which by the way was supposed to happen on december sixteenth in exchange for the ten million dollars or ten million euros and there's no allegation that that happened the framework agreement further provides that notwithstanding that g m had that saab had fifty fifty ownership with young men of this joint venture young men would get seventy percent of the dividends from the joint venture sub promised exclusivity so i promised the young men that from that day forward it would not make any other cars except through the joint venture and with respect to the joint venture board of directors there were three members young men got to appoint two including the chair last but not least the framework agreement that young men the framework agreement stipulated that young men immediately got to appoint a director to the sa board and young men got to establish a supervision committee to supervise  activities that's on page i d one thirteen in short everything that could be done was done to transfer control of the saab company to young men the final step the seventy percent equity was the right to that was  there's no interpretation of initiate that would not capture this scenario in my two minutes left i want to address the question about whether g and statements can reasonably be construed as statements of fact you know what at this stage of the  to go with the the plaintiff's interpretation of the statements but they are worth reading and they don't actually say literally what they're construed to say but for the purposes of the motion we interpret them to mean that g m said i have a i have a contract right to terminate my license if you proceed with these transactions i believe that that's a statement of legal position your honor i don't believe that's a statement of fact but importantly in this context we have to focus on the context in which the person on whom the statements were drawn was were directed would have h them this is not a case in which g m appeared out of the blue and unknown entity rode up on a horse and said young man hi i'm general motors and guess what i have a contract and it gives me the right to terminate the saab licenses if you proceed which would have been a fact young woman quite the contrary knew full well about the existence of g m about the existence of g m s contractual relationships with saab and had spent the last six months with its lawyers trying to craft  agreement that would pass g m's approval for prior agreements between saab and young men had been submitted to general motors and general motors had declined to consent young men knew about this consent right in that context there's simply no way that young the complaint what is in the complaint is the fact that of course general motors had three hundred seventy five million dollars of preferred shares and general motors had a significant interest in the company and the company was involuntary reorganization so even apart from its contractual relationships with saab g m certainly had an interest and the bankruptcy administrator would have known g m was a stakeholder so that's why people are interested in what seems position would be my time is up your owners unless you have very briefly or rather so i just want to clear up a couple of inadvertent misstatements party as counsel we absolutely pled that the euro ten million infusion was immediate and i want the court to record one dash for page incorporated the requirement for some other things to happen your honor we believe that that only three and other agreements had to be done by closing and i port the court to ari one for page one zero six unless closing has taken place by thirty one december two thousand and eleven sobbing why am young and make each terminate to be agreement and with respect to one of judge silas questions and again i think this is obviously inadvertent misstatement it wasn't just a generic press release they did a press release but they also went out of their way to give an interview to t t e l a and they didn't just say we think that our legal position is that we believe this violates our agreements the official g m spokesman said the framework agreement is not in our interest in our global operations when pressed on what g m meant by global operations mr cain responded the g m stock tiffany's and china were particularly important so i think it wasn't just a generic gee we're we're we're making a statement we have to make they went out and saw saw the publicity but very very quickly again i go back to the framework agreement paragraph seven the venture did not did not come into being could not come into being in till the start of the sale of the vehicle version based on the phoenix platform that may never have taken place that's when the joint venture would have  n that didn't happen it's undisputed that that contingent triggering event did never occur nor did it begin it would begin when saab rolled out that phoenix platform which it never did and  notes that g m has stipulated for purposes of this appeal that all of the allegations regarding the purpose and intent of the framework agreement are taken as truth and that is significant and it's also consistent with the part choice of hong kong and swedish law which requires the court to consider parole evidence not in the event of ambiguity but in considering the parties language itself that's how much they wanted to make sure that this didn't run a foul of anything in the agreement and g m is basically because they have these agreements they could tie up saab forever and that's not how it works parties routinely negotiate for things to happen in the future this didn't give them ultimate veto rights no matter what and the fact that g m was intimately involved in the process proves our point they were taking the position that no matter what they did they were going to crush saab and prevent there from being any competition in china so your time has expired but let me just ask one question you adversary here says that that the at g m the right to terminate if there was if saab even initiated a sale or change of control it it allowed them to do that if the change of control began and our position is not only but the language in the contract certainly does say initiate a change of controls i mean to control or initiate a sale of the assets and it is true i think that  that the contract doesn't define initiate it's but nothing can begin till it's been started essentially yes and that's ours so that's the concern that i have is how would you have that sale actually begin if it wasn't initiated your honor i think we have the same position unless i misunderstand the sale the joint venture the sale could not  until a contingent event which is the roll out of the phoenix platform that may never have happened so jim is somehow that this agreement initiated or started a change of control when in fact that may never have taken place that would only take place after the expiration of the agreements with g m and once they had the phoenix platform that was a contingent event so i don't think you can say that something started when something may never take place and all this was a contingent agreement i think once the the phoenix platform started rolling ask my next question is with that kind of a dispute about what the contract language means what is the standard here we're here on a twelve b six is that a factual issue i absolutely believe it's a factual issue which should not be resolved in a twelve b six motion and that's why there stipulation your honor is so important they stipulate that our interpretation of the language in our interpretation of how the language of the framework was going to work should be taken as true not for purposes of the entire case but for  purposes of a twelve b six motion and also again it goes back to their choice of substantive law of hong kong and swedish law that sounds bizarre why did they why did mr mueller choose that they chose that because they have a very unusual parole evidence rule that that when the court looks at the language of the framework agreement they have to look to the intent of the parties so that if they made a drafting error the court not only should but not only may but should consider and interpret in such a six now if i could just say one thing on causation paragraph one forty of the complaint ari wanted to three rachel pang of young men stated contemporaneously quote we young men were supporting sob and spyker to the last moment but due to g m specific in the end sweden's saab filed for bankruptcy this morning this is a contemporaneous statement in the press by a young man not some after the fact statement designed to create a lawsuit thank you