severe on remedy prejudice next era shareholders have only sixty million dollars in on reimburse expenses the show for next there is determined efforts to close that merger transaction with encore in both the bankruptcy court and this court recognize the next era took all of those steps in reliance on the parties merger agreement and the bank's bankruptcy court approval order in contrast elliott a vulture investor the bought nearly all of its bonds after the bankruptcy court approved the terminations fee is enjoying a windfall elliott stood idly by for a year while next there were pursued aggressive efforts to try to close that transaction and extended sixty million dollars in an effort to do that eliot and the debtors then succeeded in leveraging next there is efforts into an alternative transaction that sempra that the debtors and the predator is viewed as more attractive to them i'm still coming up to a couple of threshold questions the the explain that in the least recent supplemental we can that we follow the court but what basically section six seven says is that if there are certain ministry of expenses that are addressed in what was those expenses were not addressed in quote the next era plan because they were not specifically allocated or provided for in the next hour or planned but the truth of a matter of your honor is that there were no expenses it were specifically address in the next their plan rather the plan simply said that all of the debtors administrative expenses would be paid for he can't just i just ask you a practical question maybe from your perspective it's an impractical question but potential and so it seems that a request for a specific item is ation does that ever happen or is just these work categories at least that i read under the administrative claim heading are those good enough for your view or section six i think the answer is that there could potentially be some claims that would be specifically addressed in the plan your honor but generally what happens in bankruptcy proceedings is that there are certain categories of claims that the court that are set forth in the plan and then the port educates whether those are going to be allowed or not allowed at a later date and then we did you see how much money is left in the estate at that point in time and certain percentage is or allocated between either secured creditors or unsecured creditors or whatever other groups of all of the debtors administrative expenses were going to be paid for and this qualifies as a and administrative expense well let's say let's say hypothetically we determine that in fact it is well ambiguous and generally what happen don't i think your honor if you found that it was ambiguous there were probably have to be some discovery done as to what the party's intentions were at the point in time with these provisions drafted i think another very important point about the sixty six section six seven  four different theories that were released a matter of expense application three of them don't require any showing that there has been a benefit conferred on the debtors estates and as a result section six seven which if a party suffers uncompensated prejudice as a result of a reconsideration motion and that's exactly what happens here that the court has to undertake efforts to make sure that that party is not prejudiced b reconsideration motion number two we have shown that the supreme court's decision in reading which concerns the fundamental fairness doctrine has a similar effect it says that if as a result the debtor's conduct a party suffers unfair prejudice that the court has asked to undertake efforts to make sure that that prejudice is remedies and number three we have section nine thirteen of the merger agreement and that specifically says that if a court cancels out a particular provision of the agreement and that has an important impact financially on one of the parties the parties then have to go back and they have to renegotiate their agreement in order to make it fair as close as possible to their intentions at the point in time and through the merger  and also makes clear that one component of that is the expense reimbursements including reasonable and documented professional  preclude a request for allowance of the administrative claims but it provided in the print parents ethical on the ground other than the grounds on which determination he was denied provision for each party bearing their own costs that rested administrative expenses of the of the debtors i and originally that included determination motion for reconsideration it's you know only did it go on grounds other than the grounds in which determination was denied are are there grounds for you are seeking the administrative expenses the best part is from seeking relief under another theory does it have to be the same issues that were raised at the point in time at which the decision was made by the courts and here we have some two very different issues that were being considered by the court a at the time that the terminations you would deny and now we're dealing with the administrative expenses back at that time it was two hundred and seventy five million dollars that related in no way to any of the actual expenses of next year at this point we're talking about sixty million administrative expenses it and i thought you were arguing that that was a pathway to conclude that notwithstanding the language of the trade very good some costs except where it's been designated as this rate of expenses in the fees are administrative expenses and that you won't be able to recover any administrative expenses if the terminations fee is paid that's what section eight dollars five cents a gross determination if you was not paid so section eight dollars it doesn't provided for the payment of all of the debtors administrative expenses are going to differentiate it from anyone else's in fact what we saw here was that council and elliott and others received administrative expense payments for working on the same merger that we were denied equipment administrate of expenses or so what we're saying is the project is perfectly clear determination fees out the window but that limitation on plugging any administrative expenses is not applicable here and six point i just ask you a question about i know that you have kind of you know forty four theories of really you know i think i think that two of them in my view are really mainline theories you've got your reading path that comes from the supreme  can we really create a separate cause of action just like that so in fact a lot of that question i don't believe there are that it requires a separate course of action and i don't necessarily think that the sixty million dollars is the be all or the end all in terms of what our prejudices but certainly we've suffered enormous prejudice i think if we went back to district court our into the back of the court there could be some fact finding maybe perspective whether certain expenses fit in or they don't fit in but what the court said and what the law that it cited in  opinion said roberts case williams case those are rd circuit opinions it said that if there is a reconsideration order granted the court has to mandatory must take efforts to remedy any prejudice that has caused now clear here your honor  transaction we would have spent sixty million dollars and the debtor could have gone on their merry way to try to sell that asset somebody else and said also so so it seems like maybe the measuring stick for this unfair practice would be the date that the initial order was great was issued and then the date that it was reconsidered in it would seem that within those measuring sticks you would get all be expenses under this the you might have reasons to get outside of this courts do all the time telling the district courts walk the suit to follow it citing an issue and couldn't it if it had in fact meant something different had been much more precise it could have it if it intended to mandate and  the court also specifically pointed to our expense application as a potential means for remedy in the prejudice and that's there i had suffered so not only that the court's setting something has to be done in order to remedy the prejudice it's that here is a particularly appeal of that and more we're just going to drop it it seems to make sense to me that nat situation your well ways to say all of our efforts to date are going to benefit anyone else who wants to subsequently buy this eighty percent interest because we've done it and now we're done we're backing out but the not the allegations but is the brief say as time went on by not kind of releasing that deal but instead following a contractual provision that again could have been breach the the the estates lost what fifty million dollars a month i think is what the allegation is so when you measure prejudice it seems that maybe if the next era walked away that day you or your precious points are at zenith that's a really good point but then the longer that you go and say we want to keep pressing those who want to keep tying up the estate granted for you know reasons to complete the deal the pressures point goes down because the next terrorist arriving a benefit of it's own by pressing those appeal matters in texas they so when we look at fairness will only look at benefit or maybe even will d we look at prejudice you know doesn't timing matter a lot i think that is the case your honor and that's one of the reasons why i say that we need to go back to the banks back our people and determine what the prejudices here this is these are facts intensive issues that you're just speaking about that we've created benefit where there are certain detriments to the estate so those are fact intensive issues that should not have been a ted in the context of emotions the smiths and i think a very very important point with respect to this prejudice issue that the defendants or the ellie's argue they claim we cost them six hundred million dollars by pursuing this particular transaction yet this is the facts that are alleged and the economic circumstances your honor it's we don't support that they want to add three hundred and fifty million dollars to the support of the damage that the state suffered and that's  only three hundred million dollars in a lower transaction price because we explained in the briefs they agreed to sell very very different assets to separate than the assets that they sold to us we were going to have full control over encore we were going to be able to appoint our directors as we as we wanted to run the company whichever way we wanted we were going to be able to declare dividends and collect our money on any day that we wanted they had to because of our efforts it was made obvious that the p c c never accept that and so as a result encore that they were unfair that they were an anomalous they call them as they call them other adjectives so to say that the cost me three hundred and fifty million dollars is simply untrue and then secondly with respect to the interest after they want to add five months of interest on to this before it cost two hundred dollars but we need to keep in mind your honor that we have an enterprise here encore it has an eighteen billion dollars enterprise value eighteen billion dollars and it's drawing up cash flow there the month and the reason why next there was willing to pay so much money for it and eventually that separate replace so much money for things that the a very valuable asset but they didn't want to look at one side of the income statement they want to look at how much the cost was abstract as a basis for granting mistreated expense there is a theory of fundamental fairness under gravity but that seems predicated on the existence of a tort and stablished with substantial claims that which we can talk about separately but the other basis is five or three and it's certainly not apparent on the face of our prior thing in that we were contemplating anything other than you know an application for expenses and under five or three  that route would require you to feel that there was a benefit to the state is that is is that analysis going to be any different then the analysis that was  conducted in connection with the termination fee and if it's so in what way i would just respectfully disagree with the but the concept your honor that your car can you know only allowed for things that qualif these assets and then serves as a stalking horse for the debtors and for the creditors and notably your honor they did not stock this transaction until the day that they finalize their alternative transaction with sempra and that up is completely consistent with their case is what academic literature say is that situations where there are multiple bitters for at generally produce higher asset prices and so in this circumstance we were a classic stalking horse  rather well respected utility but this enormous number on the table and discovery will show that separate was looking at that when it put its own bit to gather in addition the bankruptcy court look at that in determined that that would be an appropriate consideration this and bundle of sticks metaphor that we explained in our brief they agreed to sell us assets that were totally on burdened by these restrictions these birds and conditions that are specified in the merger agreement when they turned to sell the sempra they had to sell them for a much lower price because they were selling different assets they were selling assets are burdened by all sorts of restrictions on dividend separations and borrowed the ability of a separate control entity that it all one hundred percent it's certainly not the norm if you buy a house people don't get to tell you how much you can rented out for they don't tell you what what price what color you going to pay that and they most certainly don't tell you when you can sell it and when you can generate  dividends as a result or return the money but but but but doesn't i mean i mean again to push a little against it doesn't that cut a little against some of your rationale for administrative expenses because if there are two different assets then all of your efforts to set value at market and do all these other good things to close a transaction for asset one and then what's actually sold is asset to it seems that the benefits that you've provided for the sale of asset one don't necessarily transfer to asset you may that's just a question of fact maybe that's really a question of saying you think it was sixty million in the mystery of expenses maybe it was twelve million in expenses i guess my thought is when there are two different transactions it gets harder at least to say that it's one hundred percent recoverable the efforts you put into transaction one when what was actually consummated was transaction to i would say that it does make it certainly more complicated your honor to undertake that analysis but i think it is certainly possible to do we will give the best bankers or economists who will come in and they will say what's the value of these assets uncomfort by these restrictions and what's the value of those assets that are income for by the birds and conditions and we may well see in separate zone analysis that there they had one price for one type of transaction and another price for for a different transaction and i think again the a people use conduct speaks  issue or despite the fact that they had to know it was going to be more difficult to get this transaction through the p u c team without the burdensome conditions they made this reputed choice to enter a deal with next era that provided for the removal of those conditions because that was the only way that they were going to realize the highest possible value for these assets and now they want to say you know it's really a reasonable that we didn't agree to the boards and conditions or we should cancel the merger but their own conduct is they agreed to this transaction they didn't cancel it until they had an alternative in mind but getting back to the valuation point i think that your honor is one hundred percent correct it's more difficult but it's certainly not impossible to say that  and that therefore misapplied it in into this your application i think more that it made a factual ever your honor or didn't consider the fact that these two different kinds of assets actions were selling very different assets so you can't just make a mathematical equation one is lower than the other because the nd transaction is selling much less valuable assets and that's a mistake you can characterize it as a mistake and wall it may have been a mistake of fact but i think it merely qualifies as fact finding that was engaged in by the district court and the bank speak or a motion to dismiss stage where we needed to have discovery undertaken some expert testimony and cetera in order to say did next  benefit the debtors estate and just just say that if i could finish your thought for if just to make sure i'm following it your point is we did not at this point in time to make a plausible claim that we provided a benefit maybe maybe discovery realizes we realized it on balance d we actually next year is kind of hurt the overall value maybe that's what comes out but right now you said we think we've made a plausible claim we want to go to the next stage in suit discovery transaction without with those conditions in place before next they're went out spent all this money and demonstrated at the p you seem to you see to not approve that in addition we have testimony that's been delivered at the due diligence that next with sorry with separate and that expedited their ability to close that transaction so that's another benefit at next ever created and all of those facts in combination or more than sufficient to create a plausible the court is to find that we could without it mistreat expense theory we're certainly willing to pursue that but simultaneously we have this theory under nine point one three now that there it was raised i think for the st time at least it waiver but i think that we address that well hopefully successfully it case is a we started some circuit opinions there was a bigger put architecture case there was a g t advanced technologies case and what they said is the important point is so all those facts are there are in addition in the lower court while we didn't quote the one sentence from section nine point one three that we've highlighted here in the court of appeals section on one thirteen was the subject of significant argument  between the parties and the impact on the how to move on next there was a right to appeal or right to recover rather and all we're asking for here your honor is a is a fair extension of the arguments that were made by the parties about that very same section below in the district court and in the back of the court and again the rd certain opinion say that you can on appeal make a fair extension of arguments that you've made previously so well so i think quite often what happened in the have those allegations in your complaint for state a plausible allegation i mean i mean at one level it's one thing to say the legal argument we just now came up on based on facts that we have in there but i mean don't you have to say in your complaint that you you had a contract term that required renegotiation you took efforts to renegotiate those efforts for the cost in the interim is that in the complaint i do think if your honor doesn't represent that certainly and the complaint certainly could have been more it's we want to compel you pursuant to a contractual duty to do so i guess my thought is usually when someone wants to a court to enforce a duty the cleat it in their complaint and so i guess my question is does your complaint plead such a duty in breach those are typically elements of a breach of contract i think fairly or honor that the complaint doesn't compass those issues it doesn't say it directly it should have been done better than it was but here we are at the it's really the st time that these allegations have been made if the only problem is that we need to amend the application and to assert this theory more and more directly that i think that can easily be done on remand so the real issue is are we are we did anyway this and it was discussed in the briefing in the district court in the back to court but i'd certainly understand your honor it should have been done better than it was so so what you're saying so  just to understand you're saying you're saying look even if we didn't get it right then our complaint should have been dismissed with prejudice we should have had a chance to go in and fix whatever deficiencies were there the problem with that argument is of course it wasn't squarely presented to the tyler i understand the put your honor i would say i think it probably fits within what what was alleged it's put should have done better but at the end of the day there are two other theories that basically turn on the same facts they have there's a theory under the find that normal three was not fairly rated below it's not going to have an impact on the outcome of this six point seven on hundreds on the waiver argument there and he said you should be entitled to administrative expenses just like everyone else is there anything in the record indicating that other unsuccessful bidders had adeleke and other entities have their expenses paid in relation to experiment or transaction for the very same transactions for which we are being denied mistreated expenses there were other entities that were paid their administrat the st meal sorry we have does divide the time up ten minutes for myself and i've minutes for mr mccain if that's if it's even doable under the circumstances i'll do my best to be as quick as possible you know not time  i would like to start with is is the point that judge phipps mentioned and i do think it's important because i think it goes to the st women case and maybe that is what he was thinking about one point that you did raise was isn't the time period to think about it a day one where you prove the transaction date to reconsideration time period and then moving forward with the problem with that had they just terminated in this was an  expressway defined term and and provision they they agreed in that circumstance and this is one of the main facts in the circumstance were they terminated they did not get expenses end of story no matter how much work they had done at they terminated they did not get expenses so this is not like the women's st case at all because in women's st you had an enforceable agreement with someone during that very short period of time i that is a significant difference i'm going to jump around a little bit because i think it will help for some of the questions i'm not quite it it sounds like some of the subtext here is an assertion that there was bad faith on the part of n should have received fees for any of that period of time whether or not they were pursuing the appeal with the with the bankruptcy court found with respect to three d and what the court ultimately found in the district court is that a certain point there played the game to seventy five was it bad faith no was it a failure to understand the circumstances as the district as the bankruptcy court said yes was there an obligation to step forward and say there a confusion yes the bankruptcy court found that in in both of those instances when it was considering the terminations so it does not bring us back to valuation bottom i mean it absolute bottom i mean i mean guess all those say that that the number the value of the ministry of expenses should be low you know you know way below sixty million but valuation is a different question because right now the question is you know ability don't think it goes to valuation at all and let's get back to five hundred and three b and in particular why it's five o three b and i'm a bankruptcy lawyer day to day so let's start with the basics i both three b is an exception of the distribution of assets among unsecured creditors what five o three b requires is that in one creditor come in seek to be elevated and be paid an administrative expense to be elevated to pay that administrative expenses has to be very simple actually necessary expenses to preserve the estate that is the only way quite frankly that you administrative expense and we'll get to the gentlemen's prejudice argument but when you look back at o'bryant it says quite specifically that to get an expense a statutory expense it has to be authorized under the bankruptcy code statute five hundred and three b is that statute if you look at judge wall ratz decision in women's st she rejects the equitable argument under one of five another section of the bankruptcy code that you may be familiar with that says you can do things that the bankruptcy code doesn't express they reject oftentimes it's equity she specifically on the basis of brian rejected any other the debtor to pay it's expenses that depletes the creditors assets so that debtors obligation has to decide whether that expense will maximize the benefit for the constituency it represents so that anything that next there are once would would provide an actual benefit well actually it's even stronger than that your honor it's not simply actual benefit it has to be an actual benefit that was necessary to preserve the estate it's not just one test and there are cases out there and i can give you an example if i was a bitter and an auction and there were three b say they created a structure which we all alternately will say they spent that sixty million in what way did it preserve the value of the state no other bid was made higher than the estate incurred fifty million dollars of interest and fees after the deal killer terms the estate had to go back to get in the other on its face to at least go through or process the application i think there are two reasons your honor st if you completely divorce and i think you are getting to it before or if you completely divorce these expenses from the termination you are divorcing him from the merger agreement that was the form of the transaction upon which next era filed its request for administrative claims if you go back to the record it's not a it's not a complaint it's better than a complaint they get to tell a story the only basis upon which they proceeded on paragraph forty five and throughout is i both repeat what are you need to transfer action you need a you can help me because then you know as a as i read what was happening in the interplay of six dollars you know eight dollars and then the bankruptcy courts orders it it looks like the parties agreed period there was no other answer to be had they're now terming with your word to be granted well one of the exceptions right correct but it was it was not to be distinct as expenses it was the terminations fee which was great enough to cover far more than the expenses there was not is separate expense category as you will see in many stalking horse agreements they specifically did not include an expense reimbursement in the  paid come back under six seven it's said you can't come back under six seven and in any other circumstance it never said that moreover if your honor looks at the section about amending the approval of the bankruptcy court so that's step one second it's an administrative claim and these words are very important to the extent approved by the bankruptcy court ultimately the bankruptcy court said i could not approve of these this be on the grounds of o'brien so when they did that it didn't say and external went into the transaction with the  and with a contractual obligation to proceed on whatever terms the bankruptcy court ultimately approved the terminations fee would be payable the bankruptcy court determined it could not be payable under these circumstances that's not an unenforceable provision you see a lot of words about this is unenforceable we should rewrite the contract to floss with that argument one any coun could have pled in the alternative in the request by the way if i don't get my expenses this way parties should renegotiate i should get a benefit there is nothing in the administrative request to that effect that's not just an oversight of assent because where they argued nine point one three was that the contract could not be separate the provision could not be sever the whole contract would have to be the bankruptcy court says explicitly that they aren't precluded from proceeding with that request but proceeding with their request and granting their request and meeting the standard of five hundred and three p want are quite different back and make a request under five o three b on any grounds other than the termination that was not putting an imprint tour that they would be entitled to those it was you make a request it's subject to notice dollars there's a need to renegotiate we've got reading and we've got a benefit theory i think and correct me if i'm wrong is reading in the benefit theory both being administrative expense theories five hundred and three b one theories grounded in five  p one let's i mean it strikes me as maybe six point seven gets you to the point of saying you that next year can't pursue its f h uncompensated prejudice the and that it can't pursue its nine dollars theory but what about six dollars says that that they can't pursue an administrative expense theory when the definition of administrative claim in the plan includes administrative expenses well let's let's take to it st let's start with a very simple point that the definition in the plan was a capitalized term the next era plan that plan was void have an issue what they then try to say is that it carried through each and every plan no matter what but that's not true under the contract it was a very specific plan it didn't say as amended supplemented or further modified or anything it was an extra plan which just south was void so even if this court were to read it addressed in that way that plan was never consummated let's go back to your honor's question before about what is it to be addressed in a plan many plans in restructuring address you will pay the terminations the you will pay it or b or c an administrative claim you do have that kind of language in plans all the time here it wasn't there for the terminations feet because the fact was they were proceeding with the transaction there were other fees which we identified but importantly about the language the language points one is the next era plan is void have initio so i think whether it's addressed in the next or a plant doesn't mean it was addressed in any other plan they have to argue it's addressed in every plan because every plan as a it had to be addressed in a specific plan yes had that agreement been terminated and the next era plan gone forward it would have been addressed that's not what happened it was terminated and it wasn't addressed in any subsequent plan so there's two arguments there and then there is the argument that being addressed then we've got to be expressly addressed in if you're going to read that it's any plan of reorganization but the the sophisticated they specifically defined planet reorganization as the next era plan and not any subsequent plan which can't rewrite the contract that the parties already wro so well i mean if the parties reference in xterra plan and said these are how we understand the terms to mean then the next year plan being void still provides meaning for six point seven in the agreement right that's an open ended question you're on a mask you want meaning you think it it does provide how sorry i didn't follow well well so so so let me just say that your lead point consummated it just says there are addressed in there and so i guess my thought is it one level maybe everyone was thinking that it would be consummated but doesn't it provide definition at if this were to just have listed those four components without the cross reference of the planet we organise zation we'd say oh that's that's what's in play and so i guess my question is why should we feel this is anything other than a cross reference because because again when you go back to eight point five b where they cover the expenses it says its sole remedy so this would have had to be something other than the expenses covered by it had it was it was giving power to encore which it wasn't but then you could get that expense but that's not the kind of expenses i think this went to your honor's question originally is this  the termination fee which the bankruptcy court clearly said you can't get them related to the terminations you can come back on an administrative expense let's see your application can you carry your burden what they did was they came back with again terminations the related expenses they then had to say under five o three b one i need i have to show a plausible claim what the bankruptcy court that's a heavy burden as i mentioned before five o three b is an exception it takes money out of unsecured creditors pockets hopefully to get them more but as five  means you have to have an actual necessary expense to preserve the estate and as judge sign she found and it was found not to be an abuse of discretion that the risks were too great so they have to go outside the contract they acknowledge that why do they how do they acknowledge it they now plead it trying to plead a tort claim at the last minute that was never in their request and they  they in fact were detrimental to the estate not that that's hard that's doing an evaluation and balancing as few determination and as as even the bankruptcy court mean clear it to administrative expense to sue him that's a different issue and evaluating the benefits from the particular expenses if you write well but again to carry it you still have to do a balancing a test with respect to whether those expenses did in that that carries over to two to it and particular administrative expenses when it went to brian indicates we should be looking at the particular benefits and those benefits can include  you know in increasing the likelihood that the price at which the debtor is soul is reflecting its actual worth even if that actual work is is lesser than the price initially thought and i would ask your honor two points to that your honor st i don't believe the balancing actually had to be done as a matter of law and this is perhaps different than what your honor is when you have a standard complaint you haven't lived before your bankruptcy case which is also what judge andrew has looked at judge and that's why when we put a record up on appeal to you you'll usually get so many documents from a bankruptcy court plans of reorganizations all of those other events because importantly five  a contested matter in a bankruptcy case it is not an adversary proceeding unlike the complaints the judge who has lived it for four years can take account of all of the facts that have been determined to before and look at the expense so when confronted with this particular application there was no fact finding to be done the facts had been found out the facts had been found that court had approved the transaction for three hundred million more fact next era refused to terminate the agreement there's no further fact finding when looking at finding of necessary to preserve the estate when the state and creditors recovery was diminished by close to five hundred million dollars you keep referring to this these terms of hundreds of millions of dollars  there was a difference that it was a different number it was actually lower and i'll do defer to mr cheney give you better on the math because he lived that transaction but i believe it was three to four hundred million less when you looked at the consideration but i'll defer to him on that opinion because there is no facts and here with respect to the inducement and the facts with respect to that there has no been no evidence to back that they wouldn't have it otherwise and if you look at i think it's a very telling decision how the judge who denied that terminations in that example treated the other thing i would i would ask your honour's to look at is with respect to the fundamental fairness point it was not raised in the application and again if you look at the reliant decision it is physically said to be a different claim or cause of action and therefore was found to be waived when it was not raised in the initial complaint very much rather you had the same facts or not the party it was found to have weighed the fundamental fairness argument and then finally they with respect to the f h and prejudice argument there is no basis for going for prejudice is is what we call one hundred and five in my world and equities five o three b says it must be actual and necessary to preserve the estate if somebody suffered prejudice you took my property and it benefited the estate i don't get it five hundred and three b claim unless i make a stealing or a tort claim and if you look at the crew that the application itself there was no allegations of tort negligence misrepresentation and it's too can it's too quick to say you could go back and amend they chose to take an appeal if they did not choose to amend their application used the exact same stack forty six and when they did in fact granted if you look at the very end of reading there is a section i have the paper copy if you don't mind if i look at it very quickly and it said because the receiver was taking actions to maintain and then it could be a date then a negligence claim arising out of that could in fact be an administrative claim under bankruptcy act forty six dollars and that's because the activity that the receiver was doing the negligent still was doing something for the benefit of the estate that is different and that's a tort and if you look at judge wallraff on st women she goes back even on a fundamental fairness and says you administrative expenses and supposed determination but but again your honor those things done even if you give it credit for being done against standard of motion to dismiss and necessary to preserve the if it's if they diminish the estate and you can look at me i mean to me that really comes down to kind of where are we perceive really with contested matters that you're going to tell me if i get bankruptcy code you have to i have to proceed by devotion st adversarial hearings adversarial proceedings which kind of are farmed out more and more in the kind of standard litigation way maybe that's maybe i misunderstand that i'm happy to be corrected in point time if i do but but but but but don't i mean it doesn't kind of turn on that because if we're really just going to say we're going to strictly apply it  matter it seems that they're saying we think we provided a benefit and i think you're saying oh no oh no this that this was actually a net loss and that to meet it is to feel like oh we actually it what i'm doing is i'm assuming that they've got to the point of demonstrating that they had a post petition transaction that's that's rooted in statute and i'm assuming for the sake of argument that they prove that there is some benefit the question that  think if this was a standard complaint where you had nothing else i could understand that but you have to put it in the context of five o three b the burden and the standard applied by o'brian one it's an exception you're asking that the creditors to bear the burden to the debtor has a do shiri duty to maximize the value so when you put it in that context and you give them think of it and in terms of when you have to plead fraud with particularity this is very much the same because you have the heavy burden to show but a judge that has sat there for fo years seeing all these facts knowing all the instances that that judge says what judge thought she said is i've sat here for four years i'll give you your best  cannot carry your burden to state a claim under five o three b one it's not plausible given your burden and given everything in this case but that this is that that that's the real trick right i mean maybe that's the nub of the issue because it beyond plea say we assume and true allegations and we take reasonable inference is in favor of the moving par in favor of the plant and so i guess what you're saying is instead of assuming those is true instead of giving next year the benefit of reasonable inferences in this context i think it's a legal argument that you're making maybe i'm wrong you're saying trust the bankruptcy judge because a bankruptcy judge has already been the referee over this for quite some time well there's a lot of that and even in the next era in the appeal in the rd circuit it's exactly that the judge rd circuit said he didn't abused his discretion it is not nearly enough to show a benefit i can give you examples where i plant flowers on your yard i gave you a benefit you don't have to compensate for the sake of argument i just want to go i just want to go straight down the road i don't want to say great to the transaction now it's based on a terminated transaction again we've argued expenses are not there but let's assume it was expense only let's assume six seventeen didn't stop them from seeking their expense this judge had all the right with the facts in front of him and this is what judge andrews he has sat there for four years how given their best case they're saying i created sixty million of value you didn't carry your burden you didn't carry your your heavy burden to put that sixteen million dollars on the unsecured creditors that would be detrimental to the detriment dollar for dollar for dollar because these facts in this case are unassailable and you cannot overcome those facts that is not fact finding that is taking the facts just like the standard motion to can agree more with what he has argued and what i really want to get to is this concept that this is not an adversary proceeding meaning this is not a full standalone piece of litigation that we have types of disputed matters in the bankruptcy courts there are what are called contested matters and there are ever service eden's that is federal a bankruptcy procedure nine thousand and fourteen an adversary proceeding is just like district court litigation the fell the full set of federal rules of banks the procedures apply and its complaints answer motions practice full discovery and contested matter is motions practice the vast majority of what we do in bank she court is motions practice with declarations and a hearing and that's why when you look at the start of five hundred and three and fifty three b one it says after noticing here because when you go forward  contested matter you provide notice to the entire parties in interest constituencies and then there's some form of hear what mr galardi did on behalf of his clients in response to the the next air application was to simply say we can cut through this by just a valuating the application as filed and evaluating the merger agreement he used the rules he said to use twelve b and fifty six deprived of the court some type of context and structure for it but he is really saying we do not need to go on to a full hearing on this on the facts because we can accept everything that next era put in that application and then evaluate it in bridge with regrets the remainder of the case and it's absolutely appropriate to do that that's a bank the courts do and then to say is this sufficient it was a sufficiency type analysis and what i'm trying to find you this is you know when you see an adversary proceeding it gets a nd separate number actually start to say in a in a case you'll see it's the classic plaintiff versus defendant relationship this application as are all of the ministry of applications are filed in the main case that's the moment the twelve thousand docket entries and when he's filed in the main case in front of chief judge saatchi four years into this bankruptcy he looks at that administrative claim and says i know this case i have lived this case and what you're telling me based on this application they were two theories they wan didn't you look back because five o three b run requires that you there actually be actual and necessary costs and expenses to preserve the state that's the language of the statute so you actually have to incur the costs and then you as the counter party or the claimant come forward and say i have incurred this cost but it has yielded a benefits in the estate are provided is preserved the value of the estate and that is why i am asking the courts to shift my obligation onto the creditor consistency that's why comes in at the administrative claim level and that's why it pushes everybody else down and so when you're in that situation at the end of the case judge sanji is looking at this and saying i will i understand this and basically he detailing of the specific administrator specific expenses that they are asking to be put on the and what he is saying is i will set everything you say with regard to this and then i have to evaluate under five o three b one was that an actual unnecessary expense to preserve the estate and that's land just cross to get your point i can answer the consideration issues a lot of times in bankruptcy court we talk about total enterprise value for a purchase price because the per the consideration is going to be both in cash consideration the fifteen million dollars a month of a cruel of two primary costs the costs of of running you know one dollar of the largest banks of all time all the professionals that are able to look to the estates as well as another bidder in the picture and at that point it appears the debtors were still encouraging xperience to pursue the appeals in hopes of being able to concentrate their transaction the debtor was contractually and then they've waited for the next of the entire thirty days and then they file their st appeal and then father nd consideration that they were that next arrow was knowingly waiting it out there waiting because this was the ultimate issue and this is is the transaction closes if the transaction closes there's no terminations the pay and the benefit the next era gets is encore scenario two is the transaction does not close but it does not close for a reason that allows for the terminations and that's some of the snarls in eight point five b but not all the snarls and eight point five thirds grouping is the had simply terminated it is not entitled to the two one hundred and seventy five million dollars and so by waiting it out and forcing the debtors to terminate and why did the debtors have to terminate because we the debtors have a  maximize the enterprise value of the estate that's not just the bankruptcy law that goes back to dell or fiduciary law as well and to maximize the value the state has to the high style you it can but it also has that reduced costs reduced the claims and the fifty million is so important because every month that it's in bankruptcy it's accruing fifty million dollars in additional claims and so that's why and why i am a little confused is it doesn't seem like they had another solution maybe they ended value for the estate but then lost out on the asset here you know you know comparing merger between federations which is what you do we sell the same asset every time right we  i mean i mean i think well let me just ask this question i mean i mean i think it's i think it's really nice and hopefully you are kind of explanation between adversary proceedings which is why some were more comfortable with your at least because that's that's that administrative you know expenses and two the way i find the facts you know it's not sixty million it's two hundred million it's in it you know the terminations be provided a pretty good metric for that that's probably why people three to it it's a little what lens do we look at for i mean are we looking at i mean i've read the last three pages of the opinion and and there's a lot of stuff that cited in there as fact it's not sourced it's not documented it's not saying exhibit a as if it be contract testimony that's how i'm typically used to reading this for court opinion that says these are my findings of fact they usually have cites to a record and here there's no cites for a record there's nothing like that and granted i get maybe that's not needed because there is kind of a personal knowledge component to it but my point is assume it was flipped would you just say up got to got got to go through bankruptcy judge said or would you say no there's a and in the reconsideration discussion as well they are largely made an abuse of discretion review they're largely based on like looking at what the the i know that this judge knows this case far far far better than i do do i need responsive to what you're saying with regards to how do i address this this situation an administrative claim in the main case and i said application i said that's a so harland's so so so so so so let me just i just press if that's true then you don't care about it you don't care about tom plea you don't care about andersen versus liberty lobby you don't care about massive sheet you don't care about half the same problem maybe more than half the same problem you care about abuse of discretion for contested matters and i and i'm not saying that's wrong i just want to know what your position is because it strikes me that if we take this and this is why it's important if we take this to it st qualm really analysis then it seems that there's been something best correct and you look at section c it says which rules of civil procedure apply and which rules of silversea are silent and like the whole panoply is an adversary proceedings in sin in accept everything they're saying knowing everything you have in the record and while judson cheese decision isn't fully ticked untied like you would expect a full trial or you know decision to be it is it is fully supported by the underlying record that was in front of him and that's when your honor when you look at to judge andrews who again just enters doesn't know the record as well as judge johnson but he had over a dozen if age appeals he was the lucky were a series of failed transactions and so as a result judge anders was saying like i know and we were able and you can tick and tie that record and that's one reason why he felt couple you know coming to a conclusion that he did which is i know this is three hundred and fifty million dollars last year concerns about the basket of assets i think mr the large he's briefed is a very nice job of laying it out how do we know it didn't preserve the a state it didn't preserve the estate because the dollars thirty cents on the dollar as there is in the transaction and actually close so i hope that helps there's there is one point i want to fly for you all with regard to six seven and i don't want to open the amply i know you've had a very long day must pay administrative claims in full so when you look to the next era plan even if i except your argument that that is a writing that is memorialized they can give meaning to six dollars even accepting that if we look to that writing when you see the language in section two article two a and ministry of claims when you see generic statements like that are being relied on by mr bonner that the and i'm sorry but i have to push back because if you look at those other categories those other categories are obligations that have to be satisfied to to emerge by paying the banks that code requires that professionals also get administrative claims t perfect priority status so that that's a way of incentivizing debtors people to help debtors and out and ultimately help creditors and so what i'm fighting for you isn't it but their cars to article two way the statement with statements with regards to paying administrative claims the civically is really a just it's a contractual version of the code it's not beyond that so when you when you say is it addressed in the plan it would have to be more than that i say that because six seven is a is a section the ground that says we shall bear our own costs each party bears their own costs with two dollars sets of exceptions one we've already confirmed doesn't apply right those those the five clarify because i want to help i don't think that panel got it wrong i don't think they were focused on six point seven that wasn't part of the issue in front of them what they were saying was i think what the saying was i have to decide what's in front of me i expense you know i think there if that's wrong if that's truly wrong and six dollars st clued it that then maybe their analysis is that would affect their analysis because i think a huge part of their analysis was we aren't saying to seventy five or zero we're saying to seventy five or potentially sixty and now the answer is it was two hundred and seventy five or zero and their analysis was driving how big the prejudice  where they work satisfied that there was there wasn't prejudice here was focused on the heightened standard revealed under all fifty nine dollars and specifically said with regards to prejudice right general principles and reliance importantly were adequately protected past tense in this case by the high standard reviews i think the key focus from judge there was i understand there could be prejudice i believe that prejudice was at least address a substantial contribution that's another independent means under the code by which a constituent can recover even if they've agreed to bear their own costs if they come forward and say i do and this is what this is the state this is  contribution case law basically says this all if i did an act that not just benefited myself but benefited a larger constituency of everybody i can see i can file a similar application i can come forward to the you know to the court and ask the debtor to pay me for that benefit because it's helped everybody and that's another means by which you can come to the court and ask for the debtor and its other creditors result we even evaluating whether there are benefits right those benefits still must be necessary and actual and must preserve the value the state benefit in of itself is not is not enough and that is exactly what was are getting from the judge angers i was going to do that or i'm sorry i'll try to be brief there was some criticism of the arguments that we didn't terminate the agreement i think that again the debtor's conduct is at odds with this criticism of next era they were supporting this transaction until nine days before they terminated the terminator themselves they were making arguments before the p c t that these birds and conditions should not be applied and i think it's very interesting for council to say well we were contractually obligated to do that really mean that course you know this is one of america's elite law firms they have ethical obligations they meant that when they said it a thought that these conditions should be applied and they decided that they would support our transaction until the moment that they secured an alternative that or the women  decision i think is it is it was used by then they say it's ports their case i think actually it supports our case one hundred percent we have an alternative transaction that was proposed that was not actually filled to fruition another bidder came in and in those circumstances the court allowed the st bit or some company to collect its administrative expenses and it allowed some company to collect its administrative expenses despite the fact that there was a specific contractual provision that limited to a certain dollar amount transaction price low or no benefit it doesn't make any sense they decided of their own volition to go and sell assets that were less valuable than the ones that we want to purchase purchasers want control of their assets they want to be able to appoint the board directors they want to be able to declare diffidence one when they want to and that's why we show that the puti would never approve a transaction that had those normal terms and the debtors decided that they didn't want to wait out the appellate process and they would  for the bird in the hand but that's their choice to sell that's valuable s s though i do think that women's st really sports alex started of the equation you're on there isn't so much discussion about the standard of review here and this idea that a judge could has to do with anything they filed a motion to dismiss and they follow the motion for summary judgment and this court it told the court that the standard of review is the same standard as a motion to dismiss so this idea that we can let the bankruptcy court decide what he wants in a motion to dismiss context that's something they made up out of whole cloth and they made it up today they didn't even make it up in their appellate proves mystical artists if that one point he said well we have to have a balancing test with respect to whether next there is actually the benefit of the estate or does it harm the estate well that's exactly my point your honor a balancing test classically is a question of fact that can't be decided in the context of a motion to dismiss and the back to court that that here section six point seven we did go over this to some extent in my in my opening argument but i'll just very briefly say that mr bill already wants to transform the words addressed in which are is the language that set forth and six dollars he wants to transform next their plan for the reasons i expressed earlier mr mccain and mr goh already tried to say that we hardly a state because they got a lower dollar value at the end of the day and they paid as these interest expenses but we're worth as much as an unfettered asset so when they use these numbers or they say we do benefit the estate they're absolutely positively wrong your honor and again the experts that investment bankers and economists will come and they will tell us how