right gentlemen this is obviously a multi multi volume episode in the b p saga of cases poet sometimes we get these what as a related issue raised but it's just among a bunch of issues and frequently a pal may go off another way but just whether it's a poem but there are other times when it's just impossible to  answering the question i don't think it's impossible i may not know the case because these cases have been sealed i know i was able to attend all argument i've listened to it again on one of the cases involving an oyster company which was similar but i recall the facts still being a little different in the facts in that case were were more complicated from a factual standpoint and here i think they're uncomplicated factually but baby from a legal standpoint we have the water money a little so if i may try to clarify what i mean by that we have one issue that i believe is legal for this court to decide and that is an interpretation of the settlement agree and whether or not the parties intended by its agreement to exclude businesses that had changes in the end it's form over time and what i mean by that changes in form is if a company changed form it still continued as a going concern and so that the business as a going concern following b p s interpretation is excluded and instead we have two different businesses following the bts interpretation that have two different possible claims following the interpretation of the appellant adams produce which was as a going concern since one thousand of the read until after the relevant period of two thousand seven to two thousand and eleven which is relevant for a business economic law school it was the same going concern although it had different forms at different times and relevant to this case is a change in form that happened me and i know most simplified i'm saying in that deal i'd say ok say mom and pop takes in the waffles they just made up a tax change from being so proud to ship to a subject x which was s you know for tax reform purposes and to me is clear to see that's the same on going interest you've got me as opposed to a more complex deal where here if it's an asset purchase versus we not take in the lab bill these over here we you know we strategically pick into this the s s but the rest we left out on is saying i can some it's clearer where it's the same if i want to say it whereas with his other deal with this is this asset purchase yet i left something over here is one thing he says been existing for her years but maybe yes maybe no defilement within i'm just saying what's the clarity on his legal point of when is it the same and when is it not months to be a complete merger you see what i mean versus das and look what i mean i found the case why appreciate the simplification because i believe it proves the point that we have to interpret the sun agreement consistently whether we have a simple change or a more complex deal or most important a more complex result but let me unpack if i may your question because it is with it a lot of things that i think i'd like to address because yes in the case of that his produce it's been described as an asset sale but the document that we've been looking at is an asset transfer agreement and what's most impressive to me about that agreement is that it's signed by the same person on both sides of the transaction and you don't have to build a transactional attorney to understand that if you represent both sides of the deal you must have the same client and i think that's important this is c reorganization no your honor this was an escort that became an l l c and so both are passed through  from a tax matter standpoint and as i understand it the reason for the change from a escort to an l l c is that an escort you may only have one classification of membership and in the complex result not in the complexity of the transaction but the complex result is that there are multiple classifications of membership and that's what the beneficial owners wanted and to do that they had to change their form of the going concern just see is true i'm not suggesting is not true but i kept looking for what was the purpose of it to help eliminate you know is it the same well to be fair i can't tell you that i can say within the record where that explanation is but i know that that is a reason to convert from an s corp ten l c and i know that from the prior ownership and their schedules of who the owners were who the owners are now and there are two pages on the record with a bunch of lines membership in the resulting l l c and we know that an escort does not permit so i think it's obvious on its face as what the purpose of it is but there's no statement that i'm aware of in the record that says that ok but that doesn't i mean i  care what you're saying but to me i'm not sure that helps you i mean what you're saying is what i understand the assets got transferred not all the liabilities got transferred my right you're correct it's some of the beneficial owner's personal vehicles ok but when you have lists and lists over pages and pages of fright liners and internationals and other commercial delivery appointment for produce that all transferred one hundred percent and all one hundred percent of employees work efficiently terminated but in the same document said will be hired under the substantially the same terms of the prior agreement so you have all the employees the what's what does go along and what's most important is that orders given and accepted and planned to be filled both for this transaction were accepted and all the responsibility to then deliver the goods the next day was transferred and so the business i am you know was did all this whole deal as the same louisiana get c about leading with your chen how big is the claim here so far as value you know i mean what is it that the claimant asked for the claim as ask for a business economic loss damages under the formula set out the exact amount i think is subject to several gray areas of interpretation of the settlement as far as how to make the calculations and i don't believe that the c s s p is actually published a calculation so the accountants i think may have defy me is it so big a clock in that they're making here that they should have gone through this whole transaction and thereby run the risk of leaving it behind i mean it's what i don't understand why would you do this have this claim in the successor form of it as an l l c it could go into court and sue on behalf of itself for all damages caused to it and it including its predecessor form as the successor in interest because that claim carried over to well i understand that the claim carried over my somebody said it didn't the question is what what apparently they're trying to do here here is to be able to compare the finances before and after so to speak and so that's why there's a particular premium pay was the ability to look back to not just two thousand and nine and two thousand and eight but look back as far as two thousand and seven if this transaction has happened in two thousand and eight and we had a question of whether or not we can look back to two thousand and seven it's a different question than we have here today but i think it would be answered today in their farm to that yes that is the operating history of this same going concern because what's most important is that the business the operations of the business continued seamlessly through this entire transaction through july when the papers were filed in delaware three september third when all the papers were all to move the sun because so far as the employees knew so far as the customers lives so far as the vendors and their everything stayed in the same everything just moved over and that's why even the title to the document asset contribution agreement signed by the same person as o for both forms is so telling as to what really happened here and legally this is in the successor form that would be the real party in interest with standing to make this clear and there nothing within the four corners of the settlement agreement that makes a delineation between businesses or into these i don't want to talk about the difference because i don't believe there is one businesses that made these types of changes i want to talk about two things on that first since it's not within their to have expressed only done that yet we have thousands of pages maybe twelve hundred maybe two thousand pages of of the green and all the exhibits how they can be so specific about everything else but not this does not allow b p to come in and say well but if we construe the definition of entity to mean something other than it really sad as then we can just draw artificial lines based on the registration and the probate court or with the secretary of state and so since that's not within the four corners i'm trying to unpack the agreement and what i see is a definition of and the employees truck and threw so to speak what you definitely did is change the ownership structure the ownership structure did change and there's nothing within the settlement agreement that discusses that effect if ownership structure changes or ownership changes in any way that that somehow impacts the ability of a business as a going concern to make a claim and that's important b p has in other cases been called t a operating where a business that sold a certain percentage of b under up the defense contractor exception if your business is more than fifty percent defense contracting you're out if it's less than fifty percent that's contracting you're in somehow some way but here there's not a twenty five percent chang explicit down to the bone prohibition of what transpired here i mean i wonder how many cooks when the kitchen draft in the selma agreement etc etc so we can't construe a guess drafters that old notion is out of books but it is a fact that some agreement is explicit if you will in a lot of things although we've had our share from exit ramps and surface to all these other nooks and crannies that keep coming up in the settlement agreement that we when at the table said to some so your honor i think that this is covered by the expressed terms of the so many agreement in and that's i think because mr wood sometimes selectively quotes the provisions he says that there are class number as long as they are within the class geography in section one and then as long as they have a facility within you know a certain time period but that's what section one's introduction says it also says however that in order to be a member of the class you also have to fit within one of the damaged categories in section one point three that's specifically what the class definition provides and that's the precise basis on which the c s s p and judge barguti denied this claim as judge king was getting at which if the question i want to ask for let's assume that you have an unincorporated business you know produce this is a business and so the owner say that it's unincorporated and the owner say maybe a husband and wife at the be a big business and they say you know we really ought to incorporate we're just sitting ducks here so all they do is incorporate this so they now own all the stock a pair of them whereas before they just own all the business the assets and liabilities and whatever yes in that situation which is very simple would you say there's that they can't get their  claim goes up in smoke no your honor we would construe that is equivalent to you know a stock sale and in this kind of a situation right that all that's changed is a matter of the legal form and not anything else but this is not just a ska how let's go through this and why is this not simply a change and for sure so judge first of all we think the judge barbie as a matter of fact found that in that there's been no showing that that's clear air he gets you know hundreds or even thousands of these re for discretionary review he plucked this one out to reverse a c s s p appeals panel which ruled for the claimant to say that he saw this as an asset still and not as a stock sale and we think he's entirely correct about that and this is a situation as you're exploring i think that's king in your questions that some assets were left behind it doesn't really matter whether it's you know you know all or substantially i mean substantially all or you know a large chunk left behind some of them were left behind to a different entity and then all you know virtually all of who i abilities were left behind to a different entity and certainly if the new entity which i'll call adams will see if they were sued in toward they'd be here section thirty eight point sixty five and then it's an incorporated term in thirty eight point fifteen which defines what a business claimant is and in order to file a b e l claim to get compensated you have to be a business claimant so those definitions all locked up together with exhibit four for a for before c which provide the whole compensation mechanism if they don't fit in as the actual entity the is making a claim for lost profits based on what they were doing before this bill and what they were doing after the spill then they can't file a claim and they're not a class member under section one point three and that's exactly what jets are being held and what the c s s p original decision the claims administrator mr juneau and his is a matter of you know form over substance that's all rhetoric i mean the actual finding in this case by judge corbett in a relatively rare situation in which he granted discretionary review to b p to reverse an erroneous decision was that this was that as a pivotal point i'll give you what i think is a much better anecdote which actually does appear in our briefing as to why they're separate entities which is that adams will see the newer entity sued the accountants of atoms in the older entity because they were supposed to a propped up with the valuation was and that you know if they'd known that they might not have engaged in the agreement that's entirely compatible with the notion that you have one continuous going concern entity that's merely sort of you know taking one h off and putting a different hat on there are two different entities they have different personnel involved that's precisely what judge barbier found as a matter of fact and we really don't see that there's any you know ability here by the claimants or even argument that there was if you get over the clear her error st andard as to what he found the nature of the transaction was based on reviewing the asset agreement the tax returns the nature of the transaction and then all of the other materials that were in the  in the things that matter to you your client you can't the income statements are not comparable right and so that's exactly why we say your honor that they can't hybridise the financials  you know it's almost like a kind of frankenstein of you know pick the old ones from adams inc and then use that as the baseline and then you know the new performance after this bill which is supposed to show the last let's look at the financials of adams l l c the new entity you can't do that one about the matching of revenues and expenses you can't match revenues expenses if you're matching if you're mismatching and you know kind of using apples and oranges from expenses and revenues you know from different entities together it doesn't work that way mr woods response to that in the reply brief well as well we assign the right to use the same financials to the new entity the problem that that runs into which is another reason why you know i think this appeal should fail is that there's a bar on assigning claims inside the celebrated in exhibit twenty one it's in exhibit twenty one one point one point one point one point two point one that section now the chronological question judge king about well you know the day gauging this transaction before the settlement right but the settlement was published before they would have had to decide whether to file a claim or not or opt out so if rational lawyers looked at it's somewhat expensive to pay the the accountants to kind of do the calculations to since the c s s p hasn't done the initial calculation it's not in issuance in the record yet but you know i don't think that i don't think that it's a gigantic claim like some of the cases that least if we're going to file a claim and try to get inside the settlement we should also preserve our litigation options and file a lawsuit so that you know if it turns out we're not in the settlement you know we're not time card and they didn't take either the step of opting out or the step of filing a lawsuit  want to do you know kind of go through if i could in addition to some of my affirmative points that i've hit the answers to these some of the questions that you started with so judge stuart you started with the question about what about this other case which is the oh i took you to be referring to the oystering case that mr wood referred to so i think it's possible that that case will decide this issue about an asset sale versus a stock sale indeed at oral argument judge graves was on that panel and he  specifically asked the question you can listen to it you know but wasn't this transaction between the old oystering company and the new eyestrain company done as an asset sale and not as a stock sale and then i think it seemed as if there was a comment to the effect of you know if you do that you gotta take the bitter with the sweet so it's possible that issue could be the one that the case goes off on in which case it you know it would become i would think precedent for this for this panel there are two other issues there which you're asking about in the panel can also go off on those one is our argument that there was no jurisdiction over that appeal because the appeal was filed at the sixty day mark based on an extension of the time to you know to file for an appeal in you know judge  be granted them permission to do that but we argue that that was an abuse of discretion so it's possible the panel could just odd you know women hate that case based on a jurisdictional grounds the other argument we thought was very promising in addition to the asset sale argument on the merits in the oystering case was the entirely unmoored from the sum of that agreement and indeed by the reply brief you know they had needed had admitted that they have no basis for the number that was given to the appeal panel and so we argue that if that's true then that appeal should fail under the baseball process as well so there are other arguments there but i think those would company in exchange for stock that would be ok meaning as they're sometimes called asset sales but if it's to a new and it be and so that would at that  be ok i think it would depend on the facts your honor i mean you know are the liabilities in your hypothetical being left behind because if there's one entity that's left holding the bag for the for the for the liabilities i think that you know i so facto creates two separate entities that's the whole point of this to create two separate entities you know but if there's a situation in which you know there's some kind of you know there i r s rules about deemed asset sales and the like if there's something like that and it's you know you could characterize it as purely a change in form then i think we'd be talking about a very different case but this case isn't about a peer changing form this case is about the change in substance so that the so libraries could be left behind so some assets could be left behind and indeed you know as i was saying the you know if they're putting aside this issue of like who signed the agreements on which sides there was some continuity of personnel between the two things if you have a newer entity suing the older entities you know advisers technical you know and professional  i think it's very clear you have two separate entities if you have two separate entities the claim can't get off the ground under thirty eight point fifteen thirty eight point sixty five is it feeds into exhibit four judge teacher  question about whether there was the same mom and pop or not and so i think that's what i've been exploring with with judge king is that this isn't a situation in which we're talking about you know mom and pop that decides to go from one kind of you know tax treatment kind of a thing where everything flows through to them to another one or whether they decide to formally incorporate because they see some advantage to that or not but everything otherwise is unchanged you know the operation of personnel the ownership this just isn't that case because there are changes in those things there were two entities and there were liabilities left behind and that's that's why judge barbie focused on that and in reversing the c s s p appeal panel and then the other two c s s p o p o panels they came along for their two other claim said judge barbie is ruled and if you look back at the correct mr wood was talking about you know there's some kind of purpose for this to create different classes of of owners or you know holders of interests in this company in the l l c formed you know i don't think there's anything in the record about that as i think  only admitted but even if there were king i agree with you that i don't see why that would be helpful because that would be more of a reason that a separate exports challenge more change or change exactly on the other hand if the liabilities hand been left behind if the all the assets and the liabilities had transferred and we now have a more complicated corporate structure but the assets and liabilities are now migrated then then that's a harder case a harder case that's i don't that i can heart that's our case but that's that's not this case and it's also relying on sort of purposes that you know are being advanced for the first time in you know oral argument and they're not ones that have been advanced before the c s s piece of it could be explored in a record you know could be built about case what was an issue was not the issue of class membership under section one but the issue of an exclusion under section two and there's an exclusion under section two for selling the peeper ended fuel and e t a operating so b p branded fuel they tried to argue well and you know an exception should be created if we're selling i do minimal amounts of b p branded fuel and the panel this court said no there's not an exception there mr wood says well there's an exclusion for defense contractors too emphasize a lot is that judge barbie found as a matter of fact that this was a an asset sale after reviewing the record and we don't see any basis for saying that's clear air mr wood's going to say well contract construction is a legal question well you know but they i think here is the best way to follow the sequence if you look at how you get compensated under us under exhibit four for see the very first sentence and foresee says a business claim it gets compensated you know etc under this provision so business climate i defined term business claimant is defined as a capitalized entity which is also a defined term the business claim is in thirty eight point fifteen defined and it is defined in thirty eight point sixty five and so it's integral to the agreement that you look at whether there are separate agreements or not separate separate entities or not for purposes of determining whether they can be classed members under section one in particular because you can't be a class member under section one under subsection one point three unless you can get through on you know section one and one point one about selling goods and in a facility during particular time period he ignores section one point three and he knows the definitions that feed in the section one point three the third point where these definitions i ran to ran through here you can't pursue an assignment because assignment claims the simon of claims was barred under exhibit twenty one in section one point one point two point one there was one specific kind of assignment from that that went to trans ocean and engendered separate class sounds point number six was that to the extent there is any ability to piggyback on proxy i'm sorry on financials of another entity it's only for approx ation cause a proxy causation claims which is a special exception and we explain that in the brief the second point is that they try to rely on section to seven point is that they try to rely on section two point two point four about juridical entities being something you should set to the side and corporate for not for maladies and the like that's only a provision that tells you that when you're looking at the exclusions you should look she should not look at changes and differences in injury tical for that provision there's no counterpart to it in section one about class membership they're trying to take a provision about how to construe the exclusions and read it over to construe the class definition and that's not proper i see my time is ended i have one last point i can finish ok in the last thing that they try to do is they try to say that they should win this case because once you are a class member and you do get paid and you sign an individual release you are bound and your certain bound and they try to argue that because of that you could you should construe this to allow the new energy to stand in for the elderly the problem with that argument is that there's nothing that guarantees that there's parity between the claims  released and the claims that fit within the program you have to decide whether the claims fit within the program by looking at those definitions once you've decided to sign on the bottom line you've accepted a deal and under that deal you get something like multipliers the so called are g p s the risk transfer premiums in the agreement but you also agree to waive a broad class of claims broader potentially even especially for a number of claimants that are you know ones that you haven't gotten paid for that's just the deal you get the you can then use that release to kind of backwards and for that they should be able to file a valid claim that logic doesn't work with that thank you very much  i'm not running away from or trying to avoid section one point three or any other part of the agreement what i'm trying to do is try to understand their argument that i can only explain our argument and since i don't see it within the four corners of the agreement i'm trying to figure it out and i think where they are missing it is when they say they throw around the term entity and say it's of the found term look it's defined right there in section thirty eight point six five but the definition is not really much of a definition it defines entity as an entity and that and  there's so much mix up or the word entity is so replaced by the word business throughout the agreement it's also used synonymously with business in the court filings in judge s original opinion which is nine ten fed subsecond eight ninety one on page nine of the three giving the overview of this entire settlement he says the putative class consists of private individuals and businesses defined by one geographic bounds into the nature of their loss or damage the nature of atoms produce loss and damage isn't one point three and it's one point three point one point two and the economic damage category a is climbing economic loss because of the oil spill so we're not running away from that but this is the second sentence right after what judge bar b i just said about businesses it says both criteria must be met in order for the person or entity to be within the set of the class so the business is the entity when you read the settlement agreement like that that the business is the entity the business claimant is the entity adam's produce is the business adams produce is the going concern and successors do have rights to use them the business records that they have for the going concern to make their claims at law and they knew that in two thousand and ten at the time all this was done in september of two thousand and ten the oil was still being cleaned up on the beach the n t l had not even been created much less the lawyers who would then negotiate and structure this complex and  contract the settlement agreement which is to be construed by this court as to what it means does it or does it not exclude the going concern the business as a going concern as a claimant and i think the only answer and which is actually helpful to the c s s be unhelpful to judge barbie a to give in the guidance is yes you look at the going concern you don't look at the form changes whether it's an asset sale or an equity sale if it's the same going concern the same business operations which is what a business is it's the operations to make a profit what do you say about i mean the argument they're making here and and elsewhere is that what's critical is being able to look at the financials crease bill and post bill and being able to say this is the same an itty now he says he says fine if it was a going it with a sole proprietorship and it was incorporated but all the assets and all the liabilities went over no problem but that's not what happened here the liabilities and what may or may not be out there on the revenue side in the expense side d d financial statements that were provided for two thousand and seven to two thousand and eleven just like every other business economic loss claim have the same line item descriptions throughout so they can easily use the financials provided to make the calculations on something there's no question about them you are left an asset left liabilities behind or send him somewhere else the balance sheet is not what is used for making the calculation answer the question i mean is there and in this record what happened to the i believe he's the some liabilities were not transferred substantially all liabilities actually just like substantially all the assets but there were three vehicles left out a lincoln town car b m w x five n f f three fifty how i move is not a substantial change in the operations of the business it sounds like more than just those list look into point one m and there's a schedules at three cars by then them and that's it everything else was transferred and you don't need to look at liabilities just take a look at revenue and expense to make the calculation and they they certainly can do that i believe is generally have some relation to expense my experience well if if if there was i passed liability that for example if there was that there had been a slip and fall in the past and that slip and fall was paid in the past then there may be a payment under a lot a lot of expense in the past but that's not still the books to be taken forward it's it's done so it's it's not it's not to be taken forward whether it's an equity sale or an asset sale it's all in the past the risk and the payment is done in the books and the books so all the