before we get started would you help us out with how the parties are aligned and how we will allocate the twenty minutes f the families will be sharing their twenty minutes you'll have a full twenty minutes for your right to proceed against non selling parties including the aesop administrative committee which we see as an entity separate and apart from its individual members some of the members were included within the settlement because they're not only members of the committee all crossed lines and counter claims the case is not in light of those reservations move these issues are still alive the question still remain duties to the extent there are bombs or insurance policies in place to protect for trustee liability those could be reached so we contend is the bad actor in this entire case that all of this action see what additional remedies or what better job you could do than the department of labor and the trustee did in bringing together this settlement but what can you hope to achieve at this funds those funds were substantially less you'll recall than the estimates of potential liability which ran into as much as thirty million dollars that have been sucked out of this aesop we contend because of the actions of  sierra company furthermore we would have a right to contribution from the c r company and i recognize in making that statement that i'm arguing against circuit precedent in the kim case we contend however documentation from valuation experts indicating that the information on which this settlement was predicated the opinion of an accountant that strangely that information was not reliable was not worthy of being used for the settlement strangely is not an expert in valuation he was not initially retained as an expert in valuation he never conducted an audit other than to take the figures that were provided to him informally not under oath additional later evidence is discovered a valuation that pushes the number of that in fact we see as one of the more onerous provisions of the settlement because that now puts the burden on the east beneficiaries the employees who certainly almost certainly lack the resources to conduct the audit that we claim should have been conducted before the settlement was approved everyone seems to appreciate even the district judge recognized that it's highly unlikely that the employees would ever be able to gather the resources to do the work problems family offered to put up one hundred thousand dollars to conduct a real audit we got into a dispute in the district court over just what the word audit mean the district judge said that he didn't want to see a full blown real audit going back not just looking at the numbers but going behind the numbers to find out what had happened to this company how it is that a company that sierra paid tens of millions of dollars for after a full year of intensive due diligence review by the trustee review by outside valuation experts reviewed by outside a risk all of whom found this to be a fair market value transaction how it could be that less than two years later this company is suddenly saddled with almost twenty million dollars of debt all of it owing class that did allow them to participate in the settlement did allow them to participate in the settlement did not allow them to come in and conduct the full evidentiary review that we contend was necessary so that the judge could make a fair formal discovery one would ever give closed none of the information that was provided to mr ainslie to the trustee to deal well is under oath it is all taken at face value none of it is ever investigated to see well how come it is that the stock looks like how is this different understand it's a complex business transaction and stock in the sense of how is this different from a straightforward civil case or a s ed before discovery gets ginned up a approaches be in the reaches settlement and a goes into the settlement negotiations armed with information from a valuation expert  to help them and then they go to court and say to the judge we've settled this case it's different in two significant ways you are first we're dealing with a risk and that has its own rules regulations settlement is reach accepted the proposal to certify a class and impose the settlement on that class so this is not just in the working with one another working out a deal going to court everybody in this case palms family have their own individual rights at stake but the district court also has before it the rights and duties and benefits of the aesop beneficiaries what's your best case th says there's the district court is under an obligation when settling with some but not all of the defendants to permit discovery of the  the strength the plaintiffs case the risk expense complexity and likely duration of further litigation the risk of maintaining class action status throughout the trial and your argument is that couldn't be done without adversarial discovery of the valuation expert with wand and requires more you have to be certain that the information you give the expert is full and accurate there was never any determination of full accurate information or simply these numbers that were produced saying here's what the status of the company is today according to sierra no effort to find out how it reached that status who was at fault who was responsible there was a fair amount of evidence that wells fargo was badly asleep at the switch  several times to intervene they were told repeatedly this was what's going on you've got to act you've got to act but nothing happens for more than a year and a half the thomas family when the steel starts to go sideways one zero starts complaining we were cheated some of their claims seem to have arisen after the transaction where the focus of the department of labor was that this transaction benefited the principles of the company at the time that it was done because they were paid more for their aesop shares in the fair market value no one has ever gone back to do a full fair market value only real evidence we have of what the fair market value was that the parties proceed to it's the evidence of that year move the issue no that would if this were a derivative action on behalf of the corporation pursuing individual of the stock we're not suing for injury to the corporation trying to recoup money for the corporation we are suing for the loss of value of our shares those shares were originally filed that motion was not opposed by anybody but i got a note from the clerk that it was being referred to this panel for determination i'd like to know if if i can refer to matters in the record in the district court that occurred after the resolution of these other pending now if it's still going on this obviously it wouldn't be school's out or the terms i'm sorry it would it would not be the end of the case for the time it is not the end of the case for the times the they starting claims as plaintiffs or as cross claims are there all cross claims the plaintiffs were just run through in the class and the deal well the two cases were consolidated and those were the plaintiffs they have now settled out with everybody so it's down through a series of cross claims from between defendants and counter defendants cross claim that if i thought i thought the settlement i wonder what's supposed to dispose of that also your energy it did not and the subsequent settlement by the toms with the plaintiffs accepted the claims by senior energy and she has teeth from any release or bar so the terms of those all the claims are true but the claims that are at issue in this appeal the claims that were marred by the good faith settlement determination those claims are moot i want to be very briefly just for clarity summarized the things that have happened since there's a second valuation that is what is the question of the times here a stock in the fall and winter of two thousand and one wins here energy and the other t l c parties made their settlement with the plaintiffs in which they acquired all of the aesop's shares of stock those are two completely different valuations the first one there is on the toms liability the second one is not the second one there is on whether the settlements were fair and reasonable thousand and one but if that number one arguments why they have no ability now to to argue over that one is waiver they had the chance to put up one hundred thousand dollars and have an audit done and it was an audit and the streisand wasn't there in september of two thousand and two when this was are going to george carlin he's got a little bit mixed up there was going to be a full blown audit of the financial figures that accurate judge carlton said i don't need another expert to take that financial information and use it to give me a stock value i'm satisfied that if you had accurate information paul angel you get a valid valu but it's that whole valuation review that for abuse of discretion is that i'm sorry is that correct that from the standpoint of this review at the court of appeals level we review that your use of margins and carlton gave the times that opportunity they said they wanted the opportunity in september but it was going to cost one hundred thousand dollars they said they would happily pay one hundred thousand dollars judge renfrew did not want to pay one hundred thousand dollars of the participants money because he'd already seen information he was satisfied with the deal well didn't want to spend any money on it they were satisfied so the only persons that were objecting with the tom's part and given the opportunity to do it they thought about it said wait a minute this doesn't do us any good what this is going never occurred but they had the opportunity and to come in now and say that this they've waived the argument that they never had the chance to do an audit or find out if what the real numbers were pretty se in the period again this time spent somebody else's money and got the audit and the audit turns out that the numbers would support a much higher figure for the shares then so your energy is contractually obligated to pay that extra money in which the toms will never share because they have surrendered all their interests and aesop their settlement when the place is important not because they settled but because when they saddled they gave up all their interest in contribution claims but all the planes that were ever certain against them were brought under arrest so they're indemnity and contribution claims are necessarily under arrest and that's how they will serve them there is no such thing as a contribution and there's no common liability there's no point where their potential liability and sheer energy overlap mr eisman to the very good job of demonstrating that all the claims against your energy are based on  was in their role as defendants they weren't you know doing this to help the plan for the participants to get more money and they were concerned because if the if there was not a valuation and again this is stock in one nine hundred ninety eight that they would have to pay more as tenants that was the primary motivation for them to get to discovery and you can see it i didn't interrupt you but i didn't want to lose the opportunity to ask you about the settlement bar that is your half of the argument yes yes your honor i think it's pretty standard whether it's correct in this case to have done it or not but it's pretty standard in one of these good things settlements to bar contribution in indemnity claims and yes it is but it's fairly unusual to bar direct claims and i think it hasn't happened that i'm aware of but it's not that unusual if you look at the underlying principles class actions where you have a class which is not down and the courts have to decide whether the settlement can bind them or not basically as this court did in the class pointed sources sit in seattle case and some of the other ones it looks to see if there's three things that have so there's no problem there and i think that the alternative to not allowing this kind of settlement are means that there's no incentive to settle because the the parties who would settle would just have to turn around and be sued need to get into this business of figuring out the exact value of the settlement whether it's track with consideration and all these other to do sherry responsibilities that otherwise would apply in transferring cheers from  all the parties terminal it was not shared with all the parties we just made the representation of the fairness to hearing that it had been done so that's not in the record there is in the record though a reference to a couple of other perhaps the most eloquent eloquent statement what was before the court and what the court acted along with the district judges how many i have read this three times and i still do not understand why he is there was never sufficient evidence anything that deal well allegedly did department of labor that is the court that it had another violation but didn't say what it just said we've done our own investigation period they were satisfied that they were satisfied we don't know whether that was investigation was anything more than looking over injuries figures to see if they had came to the same result the problem we have is not just the value on the day that the he stopped shares were sold this transaction took place and then the value three years later our position has consistently been that those shares were in fact worth the full price that was paid for them by sierra after that extensive due diligence that the reason they were worth much less worthless effectively three years later was the actions  energy and that an audit required more than simply what the district judge offered which was not an audit but a review that let you review ainslie's work but i will not go behind that i'm not going to have accountants come into this court he said  behind that and try to figure out was it in fact worth that and what happened to the value in between that's what or not it would have shown where the money went who took it what they did with it that's what we were never allowed to do there was never any effort to determine just remain thank you counsel the case just argued will be so that if your decision thank counsel on both sides for very thorough argument of these issues is very complex case and we appreciate your help on it thank you we will now hear arguments