good morning or owners they please the court finding this john good child i represent the two funds that were created by congress to provide health care for retired coal miners who are protected under the coal industry construction that are matters of first impression in any court of appeals it also includes one additional issue statutory construction i suspect i will not have time to get to that unless the court has questions the matters of first impression or first our coal act premium payments within the definition of retiring benefits contained in section eleven fourteen a of the bankruptcy code such that the obligation to make those premium payments might be modified by order of a bankruptcy court and the second issue again a first impression  section eleven fourteen g of the bankruptcy code which requires that the bankruptcy court find that a modification of retiree benefits must be quote necessary to permit the reorganization of the de before ordering any such modification nevertheless authorizes a bankruptcy court to modify retiree benefits in a case in which the debtor is selling its assets and winding down and before i reach the first issue the court issued a jurisdictional question i believe the parties are agreed that doesn't mean have a race as your briefs by the way i understand your honor i only want to say that the parties are agreed that the bankruptcy courts order was a final order and thus is fully appealable to this court under twenty eight u s c one fifty eight d i'll turn to the first of the issues of first impression collect premiums are not within the definition of retiree benefits in section eleven fourteen a the bankruptcy code the analysis starts with the plain language of the statute eleven fourteen essay says that retiree benefits it is a defined term the term retiree benefits the entirety of section eleven fourteen keys off of that definition and said retiree benefits are payments for medical disability or life insurance benefits under and this is the important park under a quote plan fund or program leaving out of the words maintained or established in whole or in part by the debtor the key language is payments to a plan were fund that is maintained or established by the debtor maintained or established are the keywords in issue in the construction between the parties can i ask you a question section one one one four d so you say they can't be retiring benefits because they're not  right we say they are not retiree benefits because they do not fit within the definition of retiree benefits in the statute but we do go farther and say our interpretation which we view is supported by the eleventh circuit's preceden about authorize representatives for retirees benefits not covered by collective bargaining agreement and i think is i understand their argument they say well that shows right there that there can be negotiation about statutory benefits what is your response to that it certainly doesn't your honor it simply covers all of the private plans that are out there to colors to cover s salaried retirees and formally hourly retirees that weren't covered by a union now the words eleven fourteen is and is intended and does cover benefits that arise in our collective bargaining agreement but also all other retiree benefits for all other kinds of employee and we know that the colac what in effect at the time that language was put in to do right we do know that but it just i mean i assume they are like other i mean it would just give me an example of another type of atari benefit not covered by a collective bargaining agreement a salaried employees life insurance policy of salary employees not covered by union not a member of a union maybe that person is an executive that person gets executive retiree benefits and those things are are covered under rissa usually and also subject to eleven fourteen assuming that the plan fits with s that payments fit within the definition of retiree benefits and so here what we're saying isn't that the collective premiums are necessarily outside the ambit of eleven fourteen a because they're statutory what we're saying is they don't meet the definition and construing the definition as written doesn't create an absurdity because it's very clear that eleven fourteen is designed to deal with benefits that are established by contract and not subject to negotiation other words it's a confirmatory point but the analysis on statutory construction proceeds from the plain language and simply goes from there in other words you don't need to reach the point that you're raising in order to conclude that retiree benefits doesn't include collect determined exclusively under this chapter when i look at your brief it seems like you're arguing that this position provision requires that liability for contributions to the one thousand nine hundred two benefit find should be determined under the coal act but the provision only refers to the combined fun does it does that language govern the one thousand nine hundred two benefit fund your under section ninety seven a way to collect is not governed premiums to the one thousand nine hundred two benefit plan and i apologize if we gave the court the wrong impression on that the is there is is ninety seven twelve the provision that says what you just said well ninety seven twelve as many provisions your honor this stablish is the one thousand nine hundred two plan it sets the board of trustees it provides for what it meant was that the previous provisions of those plans before congress took a mobile were not be controlling but the statute was going contro what the premiums and what all the obligations were it didn't say they could not be modified and bankruptcy or it they didn't say that they could negotiated in bankruptcy it seems to me well your honor i agree with all of that except for the last part but the statute says what it says and the once the how about we can we can discern what it means can we not yes your honor it is your job to interpret the statute as a matter of law let let let me raise just assume can be a sermon a whole lot of things against you interest but i'd like to get a different point assume you lose on this definition of a retiree benefits because it was maintained in part  cases hold that it can apply eleven fourteen g can apply even though you are chapter eleven would ultimately liquidating in order to permit the going concern sale but that did not require a complete elimination of the premium obligations with respect to th you did make that argument in your reply brief in the district go but have you not made that argument because your honor it is important to us that today when what is its stake is our claim in the walter case a chapter eleven administrative expense and a chapter seven administrative expense it's important that we present to the court the issues of law and the issues of statutory construction that have never been touched by a court of appeals in other words your honor what we have an interest in the outcome of the walter energy case in both the chapter eleven admin and chapter seven admin we viewed because we had limited resources and opportunity we view the two issues that we've raised as the ones that have the most importance i have a question about tax and i'm going to be generous on both sides with the time if it's hard with my colleagues at we want to get this right now it's complicated a certainly agree our on the tax issue  as i understand it judge proctor said it's not a tax but even if it is a tax on these payments under the coal act you know there's no there's no other way to challenge it and again have sure you are trying to confine your arguments because we're so many to make but i didn't i mean nobody seemed to address that is there another way  that the coal company could have challenge the payments under the coal act assuming it's a tax yes the coal company could have declined to pay the premiums and then challenge them  once a penalty was assessed against or could they have filed a refund suit or something like that but there is a procedure under which a coal company that pays premiums to either the combined fund or the hundred two plan can challenge the premiums and in fact there are a circuit level and even supreme court decisions that deal with companies attempting to get refunds of their premiums and so all we're saying in raising the anti injunction act is by fronting the issue to the bankruptcy court in the way in which it was fronted it violated the anti injunction act we do acknowledge that that's a timing issue and that's why in my remarks i started out by looking at that the eleven fourteen a and the eleven fourteen g issues because those are the ones that are that are of first impression that tax injunction act does relate to the timing we believe it was violated but in the end we think the result of it is that payment of premiums would then trigger the right of the coal company to challenge the their premium obligation once paid we think that's all the tax injunction act would do all right but we're not a few more questions about that and my going back to your argument about the right tyree benefits definition congress specified that colac funds are employee welfare benefit plans for the purposes of a risk it seems to me that that undercuts your argument that this is some sort of special type of protection unavailable und any other type of retiree benefit but your response to that argument your honor it is quite the opposite and i'm glad you raised the question colac funds are welfare plans within the meaning of section three sub want to receive twenty nine u s c one welfare benefit plan that's what anderson versus him stands for in other words yes the other side raised this issue but it is the strongest point in our favor because once acknowledge that the colac plans are to be treated as a receptive lands arista well for benefit plans there is a rich body of case law and what it means to maintain full right right but in fairness to the anderson task as to by an employer or an employee organization and here we have a union involved in the plan so the other side's argument is because the coal act has been to collect mines were fit into the arista definition then that must mean they must be treated like interests of plan that is maintained by a debtor and we look at it and say the fact that the colac funds were acknowledged to be employer employee welfare plans and attempts to argue in in my view quite creatively if we look at these plans as a reception lands and ask the question of whether the employer maintains because we know there is an employee organization if you look at the definition in a recession we know there is an employee organization a union that is in part establishing and maintaining because the union is a set lower of the colac funds so we know the definition itself is met the question is whether in addition to an employee organization maintaining you also have an employer maintaining and it's undisputed that walter is not a member of the bitumen as coal operators association which is the other settlers so they don't get there that way they're forced into the anderson definition and the anderson definition requires actual involvement in the plan it is not enough just to pay premiums assume you're on are quite right what all i'm saying is anderson which is also an eleventh circuit panel case comes after randolph first of all and second of all the facts and randolph showed more involvement than walter could possibly of two things about that your honor first of all none of that is in the record second of all it is factually inaccurate i understand that your honor thinks that that is incredible but in reality the your way health or retirement funds which administers the colac funds respectfully no that's not how it happens the way that it actually happens and this is true just standing back from it the reason why this is going to make sense is recall what we're doing the coal act funds are established to take care of people many of whose employers are gone you're talking about retirees of companies that have left of sold their assets have gone defunct have turned into other companies what actually happens is it is the funds staff that communicates to the beneficiaries and their spouses and dependents the fund staff is actually the entity that has the relationship with these people and if a beneficiary dies and the surviving spouse makes a call she or he is mean i know you won't like it but holds against you on the retiree benefit definition and the liquidation clause chapter seven liquidation argument that you make but concerns your honor no i would be bothered in two ways by that the first reason i would be bothered by it is because that articulation of the standard by a court of appeals would create a significant amount of mischief among the lower courts in the bankruptcy courts because you can even see in this record where you have a complex debtor a transaction can be created in order to put the rabbit in the hat so to speak your honor so it's an unworkable standard if your honor is say it's ok in a liquidating case to modify retiree benefits but only if it's a going concern we would never say that when you say we don't address any of the situation but in this situation the you might has not man made honor again i don't believe that that would be a workable articulation if your honor were to do that the reaction among the lower courts would be to attempt to construe it sometimes it would be all right to have a modification of retiree benefits it would depend upon what the debtor was doing and the absence of some direction i believe that that would be an unworkable thing your honor and it would turn to the second thing i believe it would cut against not only the literal language of the statute which we haven't even talked about your honor but it would also create in my view a an absurdity or cut against the whole reason why eleven fourteen exists eleven fourteen exists in order to prevent liquidation we cited the statements of senators to that effect that's really undisputed prevention of liquidation you have a bankruptcy court here who literally rewrote the statute in her opinion to say in a liquidating case eleven fourteen she should read necessary to permit the liquidation so does any of the case so hold no your honor but the situation in family snacks together with the situation you have in this case is quite instructive because in this case what you see in the record is the adjustment of the terms of the transaction in order to take into account what could be modified and what couldn't the record shows this is a three zero one the record shows that this transaction was designed in order to allow the purchaser to assume certain obligations that the purchaser didn't think the purchaser could get out of like black along the total number of dollars in all those one hundred fifteen million dollars that's in the record a three zero one one hundred fifteen million dollars family snacks in this case actually show you that when it's permissible to modify retiree benefits into liquidation it will become necessary it will become a self fulfilling prophecy because your honor the purchaser here had one hundred fifteen million dollars to give toward non modifiable obligations like black lung benefits very similar to the coal act by the way but because there was a chance coal act obligations could be modified it became part of the deal your honor dale stover's affidavit in the record establishes that coal act obligations are worth less than four and a half million dollars a year to walter it was a drop in the bucket combined fund premiums every year one hundred forty two thousand dollars so i don't accept the notion that especially in a complicated transaction here where you have assets being sold for total consideration of nearly a billion dollars that it was truly truly necessary in some way that would require a standard that a going concern sale would need to have elimination of coal act obligations so this case is emblematic for why there isn't another case out there like family snacks please the court just to the beginning and the coal act is a statutory funding mechanism for you m w a retirees who retired before nine hundred ninety two or before nine hundred ninety four depending on the funded issue so you're talking about folks who've been retired somewhere between twenty and twenty five years at a minimum secondly it's important to realize that there is no risk that any retiree from the from the us covered by these fines are going to lose any benefits the district court made that finding d r forty one at page fo and it's also in the d c circuits hollande case two fifty six f there are at eight twenty one the reason for that is because that's why the coal act was enacted it was enacted to create a insured government backstopped statutory retirement fund for a confined group of retirees and when the future bankruptcy these orphaned more retirees this is the language of senator rockefeller when it was in acted he intice a pated there would be future bankruptcy's that orphaned new retirees that would you don't have any more obligations under the coal act we were terminating your premiums where does the money come from there is an abandoned mine reclamation find that was created by congress that has a surcharge on coal production and that fund earns interest and as that interest a cruise on that fond of those interest payments at current market r mean if that are transferable to the funds as a backstop funding there is also a provision for additional premiums from those employers who are contributing but the backstop funding is set forth in the statute would you like me that's yes so that's that's how it works i have provided the court in a supplemental authority a congressional resource i'm sorry a congressional research service publication that was given to the senate at the time of enactment and it sort of lays out the basic nuts and bolts of how it works but i just wanted to make it clear that we're not talking about retirees who are losing any benefits here is just district court affirmed all of her factual findings in that opinion i think it's important to pick up on your question jane or send mr goodchild conceded below that this was in the best interest of the walter energy's bankruptcy estate and as you pointed out the district court made a factual finding that this was necessary to facilitate the reorganization of the debtor did notice that the bankruptcy kohak relied heavily on the fact that it was necessary for the ongoing sale yes but the district did not he was less specific at least well he had  affirmed all of those factual findings that was what happened is at the front of judge proctors opinion he affirms of her factual findings and mr goodchild is trying to make this liquidation point as a legal issue but question when your time is up and the presiding judge like to let me do that which if you want to ask the question i'll take it it seems to me that it's clear that this was necessary for the ongoing sale what is not clear to me is that the modification could not have been made in a manner that protected war couldn't it have been modified in that one of the facts before the bankruptcy court or that there was zero cash after the transaction to pay for any us once the sale closed on the clore walter energy assets there was zero cash in the state at the thought they got paid a billion by no that's the buyers credit your honor that's a billion three but in terms of the debtor and the debtors resources there were no cash right but let me let me back up so so did i get any k they got a substantial amount of cation the so you know your honor this was a credit  situation the secured creditors have interests in the debtor and rather than go through a plan and they bought the company reorganized and have saving the mines preserving the jobs of voiding the environmental consequences that's the going concern so you had secured creditors in the bankruptcy make a period of the debt that they're owed and they turned that into equity by virtue of the bankruptcy so then there was no case left to pay the additional premiums that would do after the sale as i understand it plain manful paid through the sale correct we were current up until the closing of the sale and nobody thinks that the premiums would continue to be due after the company is actually liquidated what is that correct yes ok so we're talking about the premiums for a period of about a year so systemd think back from that factual issue to the legal question the cole actually requires three things it requires the company who is operating to post security second to pay premiums and third to maintain their own employee retirement font it's called n i walter energy had an eye e p that covered five hundred seventy two of these pre ninety four retirees we have our own plan we pay for it and we administer it in the statu requires section ninety seven eleven requires the company to maintain that when walter energy goes for this transaction the most important thing in the language of mr goodchild below the primary source of benefits here was our plan that week in disputable e a stablished and maintained we canceled that so five hundred seventy two retirees that we were paying for p those five hundred seventy two retirees then move into the ninety two point zero k the the premiums that we were paying were for thirty two retirees covered by the combined fun that we weren't covering in our own plan that's just one hundred forty seven thousand dollars but the big premium on his side of the case is the four plus million dollar premium and that's for five hundred seventy two retirees to move into that point so there's a big piece of this that we established and maintain that we had to cancel because the buyer wasn't going to set up a new plan for those retirees so that shows you that these obligations have sort of they're intertwined on both sides of the transaction that's what the point i was trying to make can i direct you to the same question i asked opposing counsel on this provides for an authorized representative of four persons receiving quote any retiree benefits not covered by collective bargaining agreement and you say well that's that means the coal act no structure of eleven fourteen there are provisions made for representatives of the retirees who are covered by a union under a collective bargaining agreement and they're also means to to cover non collective bargaining agreement but the point we are making there is it covers contractual and non contractual isn't it but there are other categories besides collect your sorry benefits to answer your question i'll take you back a page if you have the read brief and the statutory appendix so that we're reading out of the same jimeno oh well page eighty three of the read brief has eleven fourteen a and if you have the language there you've got it right in front of me so the more important piece of this your honor is the use of the word any plan fund or program its any congress wrote this language to be exceedingly broad any plan fund or program and then this picks up on judge honor since point parents that a call through the purchase of insurance or otherwise a close friend that indicates as judge anderson pointed out in the randall case all that was it issue in randall was the payment of premiums for an insurance policy and this court in randall holds that that is in or is a point and then picking up on judge priors point the coal act itself tells us that this i covering five hundred seventy two employees that we we wrote the part i mean we administered the plan we funded that planned and full but then you have or in whole or in part by the debtor in so far as we're talking about the premiums paid to the colac funds that through the payment of insurance or otherwise is sufficient under the language of eleven fourteen eight and in the language of rain i have another question  argue that section eleven twenty nine thirteen makes clear that retiree benefits referred to obligations that a debtor contracts for and not premiums under the call act that are statutory and they rely on the language in eleven twenty nine a thirteen that says that the debtor has obligated itself to provide such benefits reading that as a contractual obligation i don't see that you address that argument in your brief and i wonder if you could comment on  jury or are i think if you read that language in context it's talking about the debtor is obligated itself to provide in the bankruptcy court itself i don't know that that language has the heft that he wants to give it  if you if you look at eleven twenty three before it makes it clear that the bankruptcy court has the authority the rise a going concern sale by this by selling assets and it via three sixty three and eleven twenty three that's what happened here and it's that in the language of the case law sufficient under judge andersen asked the question mr goodchild which cases hold that a going concern say always sufficient the first case starting at the top is maxwell newspapers from the second circuit that's relied on by the bankruptcy court at page twenty five in no forty two that's nine eighty one f second at ninety one and then judge anderson's already spoken to family snacks hoffman brothers is a ninth circuit bat case family snacks is an eight circuit bad case both hoffman brothers and family snacks are in our brief and then the going down to the bankruptcy courts you've got alpha horizon and the eye on a sphere case and i honest fear is important because honest fear makes it clear that if a chapter eleven debtor cannot modify either a collective bargaining agreement under eleven thirteen or its retiree benefits under eleven fourteen when it goes through a go in concerned sales what happens well eleven fourteen e g super priority to payments to retirees and so if you can't modify in a going concern sale what that means is all of the money made from the sale goes straight to the retirees to the detriment of all of the other creditors and that's inconsistent with the purpose of bankruptcy if that's what the court holds it will have two significant effects on this case it would undo the closing of the sale because eleven thirteen uses the same language  the collective bargaining dream was cancelled so he's collaterally attacking the eleven thirteen order if that's what this court holds but more importantly any debtor who wants to reorganize who has a collective bargaining agreement or large outstanding retiring obligations will go straight to chapter seven straight to the chop shop piece millett quotation in the bankruptcy court held that that would be a disaster here and that's a factual  finding that she made at page forty seven and fifty four of her opinion and made that same funding that that's her findings drawn or bankruptcy record fourteen eighty nine pages forty seven and fifty four and mr goodchild comment about how it was in the best interest is district court record twenty three page thirty nine thank surprised by the answer i want your answer because the reason why i'm a surprise is that he seems to suggest that there's no jurisdiction in the bankruptcy court for adjudication of taxes and that seems to suggest that he wouldn't have jurisdiction over his own administrative client that's how jurisdiction works it's not the core only has jurisdiction to rule for him and not for me that's not how it works so is that but what how would how would you challenge it well first of all this is so far afield from where we are eleven u s c five zero five trumps the anti injunction acts which is why the i r s in this case and in any bankruptcy case when they show up they don't tell the bankruptcy judge that he or she can't adjudicate the taxes of the debtor five o five says the court may determine the amount or legality of any tax or any addition to tax whether or not previously assessed so even when the i r s shows up they don't wave around the tax any injunction act through their government lawyer because the bankruptcy court in five zero five a adjudicates taxes all day long now mr goodchild is not a government lawyer he doesn't work for the i r s for the department of treasury so he's making sort of a very work through all these issues and i'm just trying to be sure i've got the framework so if it's a tax it can be adjudicated in five or five days the simple answer like that question all right on the tax and i want you to make sure what i say is correct and tell me if it's not the reasons why this combination of retiree benefits anyway after the sale to pay the premiums is that correct bankruptcy court fourteen eighty nine pages thirty five and thirty six that's her order and the hearing they thirty five through thirty six ok and the hearing bankruptcy court record thirteen thirty six page ninety  chapter situation because they would simply go immediately to chapter seven liquidate and terminate the premiums did you is that what you said i did your honor because the language of eleven thirteen and eleven fourteen on necessary for the reorganization of the debtor appears in both statute us and that would mean that someone who wanted to do a let's say all g m wants to go through a going concern sale to salvage it after the recession but they have existing collective bargaining agreements if if these two statutes don't apply to all g m all g m can do is go straight to the chop shop they can go through as they did chapter eleven and cancel their collective bargaining agreements and modify their retirement benefits and come out the other side as a new business and you say and i think i do remember that  says the same thing is that correct well i honest fair talks about a little bit different subject which is the priority and what that means is he says if you can't modify it what that means is because retiring benefits in the language of the eleven fourteen he have probably already and if you can't modify them then what happens after a three sixty three asset sale any money earned from that would go directly to the retirees so in that case there were five million dollars in outstanding obligations that the debtor owed to the retirees they go through an asset sale that are earns a million nine and the judge and i on a sphere says if we can't modify the retiree benefits and you look at the priority under eleven fourteen easy then all that million nine is going to go only to the retirees and that violates eleven fourteen g which says any ruling on this has to be fair and equitable to all the creditors specifically and then generally bankruptcy is designed to treat all of the creditors fairly and equitably so any other reason that this was necessary to permit realisation can you please give me fourteen mitchell's opinion as bankruptcy court record fourteen eighty knowing and her findings are extensive and uncontested for purposes of the appeal but after you get through the front half she goes through starting on page thirty nine of her opinion the final proposals are necessary to permit the going concern sale of walter energy starting on paragraph seventy and you going through paragraph seventy eight your honor that's pages thirty nine and those are all the reasons through forty four yes ok how do you respond to your opponents argument that if these obligations can be modified they will always be necessary to the transaction because the transaction will be structured that way i'm sorry can you repeat that sure sure if if if we were to rule that the obligations can be modified by the bankruptcy court how do you respond to his argument that they it will always be necessary to the reorganization because the transaction will be structured so that that's the case as i understand was the case here according to him i think i think the best answer to respond to that judge far is that contrary to the spirit of eleven thirteen eleven fourteen which were passed to encourage the parties to negotiate over these things the whole idea of both statutes is to encourage the parties to work it out to try to save the to maximize the assets and reach a negotiation a compromise if you will that helps both sides and if they can't reach that right th then the court may have to step in to modify or cancel the collective bargaining bring that's what happened in this case we had a dual track scenario we tried to negotiate with the u n to get one hundred fifty million dollars worth of concessions they wouldn't go along their secured creditors realized they would have to put more more more more money and they just said work we're going to we're going to slip off the plan and go to the three sixty three sale and we'll reorganize that way so i think that argument from him puts the cart before the horse the purpose here is negotiation and the court only has to step in if the parties can agree so i mean that's we wint w file for bankruptcy one of the parties we met with why would any business person trying to make a deal say by the way we want to pay more her i mean once they know they don't have to i mean that his point ok i mean i just i don't think that's the way it works generally and i don't think that's the way it worked here i mean the record shows that we went through several rounds a negotiation with the u s in fact they were a party obviously that we met with before we even filed for bankruptcy so it's not like we structured this deal to you know to from the get go that's just not how it worked and as as he's admitted this is a drop in the bucket i mean the  manipulated and it was really necessary that be easy to see through would it not in the abstract yes and in this case it's now what happened and there is frankly no argument to us n on july eighth bankruptcy record to ninety four exhibit b paragraph five we made the first proposal for one hundred fifty million dollars in savings after we filed for bankruptcy on august twenty six yes or may it please the court i am here on behalf of the interested non parties warrior met coal the purchaser and the steering committee i just have a few things to say and then i'll answer any questions the court may have first been in all of mr smith's arguments i think he did a fantastic job and we agree with everything he said secondly i just want to make sure i'm here to protect the buyer's interest and judge anderson that was music to my ears when i heard a comment from you saying that you thought it was it's ok to cut off liability for the purchaser and the purchaser going forward and in fact in their pleading the mr goodchild said and i quote it's on page one of his opening brief reversal of section eleven fourteen order will not affect the underlying sale order the buyers of the debtors assets or the bars possible obligation to pay  premiums after the sale closed i like hearing that and i'm here to make sure that that is what happens but to the extent the court wants any further argument we think that the plain language bankruptcy code section three sixty three  and the stephan case this court eleven circuits court out of two thousand and fourteen interpret ing it pretty much puts a stop to all that so i'll answer any questions the court may have but we we want to make sure that there is no liability imposed upon the purchase r from this appeal i mean that question before us is that you bought the assets free and clear of any future co act obligations and right yes and whether or not it's before the court i think is is a question in a concern we hope it isn't we think it might not be based on what the appellant said but then they turn around and also ask for the court to reverse the order we still have claims and  interest in what is remaining in the debtor's assets even in chapter seven there is other stuff that we are entitled to get out of that and so to the extent this court were to order something that would somehow impose obligations on the remaining assets that are earmarked to go to other places including us that could possibly impact and that may be one reason you made the lead to any g terminate a condition of the  sale that is correct your honor and i suppose you'll potential liability was as a success and interest is that right that is correct your honor in both the bankruptcy court in the district court found we were not your honors i'd like to pick up right there it is sleight of hand to say that there was no cash or you have to do is look at a three zero one of the record is that which is it that's correct your honor that's paragraph twelve of the bankruptcy courts findings in which the bankruptcy court details who gets what under that transaction and what you'll see there is that instead of providing the cash to the debtors estates the transaction was designed to create specific trust funds so that the cash that was being provided in that provided in exchange for the sale was kept away from people now they kept away from people part is my and my editorialization so i apologize for that but the fact that consideration was paid in is clear in the record in a three zero one zero that goes both to the point of whether there is something to get and the fact that the purchaser is here as a competing claimant suggest that there is something to get and it also goes to my point about the design of a transaction now judge anderson you asked some questions about designed the transaction and also the negotiation point the transaction was not negotiated among everyone the transaction was negotiated behind closed doors between the secured creditors of walter energy their debt holders and walter energy itself the collect funds didn't have seat at that table nobody else has see at that table i'm kohut said you didn't make that argument to the bankruptcy code no your honor that's not the what the court ruled with respect to this particular argument i do agree that the bankruptcy court made certain for occlusive findings with respect to my client all i'm saying is i think i'm making a different point which is the issue of the design of a transaction and how this court's ruling affects how transactions are designed transactions and bankruptcy's are designed behind closed doors and then are presented for approval and by the time they're presented for approval what's necessary to them is already baked in and that's all i'm trying to say about it so with respect to all of the discussion on design of transaction and the possible results coming from a ruling from this court i do think it's important to to consider how these things actually happen in bankruptcy court and with respect to the negotiation point the record is clear that there was no negotiation whatsoever on the yes the bankruptcy court made factual findings about the discussions between the debtor and the union but the record is clear that the union refused to negotiate on coal act because it said that it was a statutory obligation and that is it a two seventy three us has no authority to agree to any suspension or reduction in any such benefits to the extent that there are factual findings about negotiation the record is clear there was no negotiation with respect to the cole act and i do think that's an important part of the record there was some discussion about section ninety seven eleven and something called an i e and it's true the cole act requires that certain employers maintain individual employment excuse me individual employer plans to provide health benefits for their retirees in fact that is a central tenet of the cole act and it is true that any such plan would be maintained by the debtor that's true but the section eleven section ninety seven eleven requirement terminates when the debtor stops being in business don't be misled your honour's there's no question it's not before you whether the terminations the i p was authorized under section eleven fourteen and orgy that's not the issue that i terminated because of the sale that the obligation expired as a matter of federal law we're talking about the obligation to make premium payments to the funds and the one nine hundred ninety two benefit plan is the fund that took and took over all the health care for all the people that used to be in walter's individual employer plan in other words my client is now responsible for for providing benefits to all those people that walter energy used to have in its individual employer plan so the section ninety seven eleven obligation and how that relates to retiring benefit is a red herring retiree benefits and that definition must be viewed in relationship to the premium obligation to the funds and not to the ninety seven eleven obligation  think takes me to randall now i think the parties are agreed that it is this court's own precedent that determines whether the cole act funds are maintained by the debtors this whole discussion of whether eleven fourteen a applies boils down to did walter energy maintain the colac funds and that question is a question on which there is controlling authority randall and anderson we acknowledge controlling authority on the question of randall didn't just deal with writing a check randall and i'm looking at the  reported decision in randall in randall the employer decided to help his employees purchase insurance and to provide an incentive for them to do so the employer contributed seventy five dollars toward the cost of the monthly premium for each employee in other words the employer took on a share of the employee's burden the employer wrote a check for the full amount of the first premium in other words the employer extended credit to the employees paid some of what they had to pay the employer then used payroll deduction to debit the employee's account to get the money back in other words to have the employer's loan repaid and then did that every month this court held that that meant that the employer was maintaining the fund it was the it was all of  it was the continuing involvement it was the extension of credit to the employees this court's own precedents established that maintain means something it means involvement you aren't you do not have facts in this record that would support a conclusion under this court's precedent that they collect funds were maintained even in part by walter so to the extent randall controls randall controls and requires a revers and i do if if it's all right your honor i would like to talk a little bit about liquidation there have been two points made about liquidation it is undisputed the statute doesn't say necessary to permit a going concern sale statute doesn't say necessary to permit a liquidation the bankruptcy court this is it a three thirty one the bankruptcy court literally rewrote that statute said literally in a liquidating chapter eleven the language should read should read necessary to permit the liquidation of the debtor now your honour's i believe that that right there is a violation of statutory construction but we can move beyond it because the entirety of the bankruptcy courts order proceeded from the idea that a bankruptcy court could simply rewrite the language of the statute there was no discussion of whether liquidation meant the same thing as reorganization the district court considered the question and said i know i'm supposed to construe the statute literally and i know it doesn't say liquidation but if i don't construe it to include liquidation i'm going to get an absurd result a result that is at odds with the with the meaning of statute and so i'm going to deviate i'm going to use the bob jones analysis instead of the ron pear and alice as of the district court did here the bankruptcy courts findings the beggar's court says a number of times in her opinion the bankruptcy court said this is a case in which the debtor has failed to restructure using a plan of reorganization and has determined to wind down in other words this is a case in which the record is clear walter was not going to emerge from bankruptcy that's not g that's walter going out that's what we have here we have a case in which a debtor is selling all of its assets going concern are not going it certainly is not relevant selling all assets ceasing eleven fourteen is not defined in the bankruptcy code so we don't have a an affirmative definition from congress but we do know in the bankruptcy code that there is a difference between a reorganization whatever that is and liquidation liquidation is distinguished from reorganization and at least three important pop pieces of the bankruptcy code in other words reorganization does not include liquidation and liquidation is not a part of reorganization and the three parts of the bankruptcy code that tell you that are eleven forty one d three which presumptively denies a discharge to a chapter eleven debt or even in a plan when the debtor is selling substantially all of his assets and is not going to engage in business just like walter the second part is eleven twenty nine a section eleven twenty nine a eleven that is the part of chapter eleven that requires that a plan the feasible before it can be confirmed by a bankruptcy court congress required in that section that a bankruptcy court find before confirming a plan that the plan is not likely to be followed by quote the liquidation comma or the need for further financial reorganization chama of the debt or in other words two different things a plan can't be confirmed unless the judge finds it will not be followed either by a liquidation or a further need for reorganization other words there different liquidation isn't reorganization we are not free to just say liquidation in some cases is just another way to reorganize that improper use of language that loose use of language is precluded by the bankruptcy code and there's one other spot section one hundred one sub twenty three and sub twenty four this is where the definitions of foreign proceeding and foreign representatives are made in the bankruptcy court and the bankruptcy code congress in making those definitions distinguish between a foreign proceeding that reorganize designed to reorganize versus a foreign proceeding that's designed to liquidate it defines foreign proceeding when it's specified that a foreign proceeding can have as it as its purpose quote reorganization and quote or quote liquidation there are different things again suggesting the two terms differ reorganization is not including a liquidation and liquidation is not simply a kind of reorganization in other words your honour's literal application of section eleven fourteen g requires reversal unless doing so is at odds with the purpose of the statute or creates an absurdity and it does neither and the reason it does neither interpret in section eleven fourteen g as written it's consistent with its history in language they suggest that the purpose of the statute just protect retiree benefits except when necessary to prevent liquidation and we cited statements of senators heinz and metzenbaum to that effect page thirty eight of our opening brief and it is certainly not absurd to limit the power to modify retiree benefits to cases in which the debtor is attempting to emerge from bankruptcy that's the key the debtor is attempting to emerge from bankruptcy you have a reorganization in progress even though there may be sales along the way of property but you have here and the bankruptcy court still found in multiple places you have here a debtor that failed to reach a deal failed essentially to reorganize and had already determined an orderly wind down was what was at issue thank you i think we've got it thanks again your honor i do appreciate the extra time there was a great presentation by both sides thank you i was actually