a contract that spyglass negotiated and drafted yes a purchase agreement provides that spyglass purchase all assets of the debtors of whatever kind except for excluded assets one of the key categories was assume contracts and understand what an assumed contract is we have to look at the specific language of the p f a and not fall back on bankruptcy vernacular that it's not only an executor or a contract that can be assumed or rejected and i asked state a predicate question which may be a digression but there was a claimed it or you have a preferred to security interest in the movies gross receipts and there's an obligation and  a curate so we're financing statements your honor there's nothing in the record that indicates the financing statements file the security agreements that are that there are referenced and certain of the investment agreements only secure the payment of an uncertain stream of payments based out of potential gross receipts that were entirely speculative and the testimony the undisputed testimony in the case your honor mr birmingham and the debtor schedules of assets reflected these investment agreements were accounted for and has investment agreements they were not loans or debts they were accounted for as investments on the books and records of the parties and there's no due date for payment no interest rate no amortization schedule it sadder yet it actually leads to my next point it seems in connection with both the bankruptcy court and the district court again as an aside there were treating these as if they were somehow it affect loans that you would think of in a commercial context i didn't see that as your honor i would we didn't need there and that that's the hinge point of the district court opinion where there was you know absolutely clear you know if you under review it in ohio and needs to be reversed the district court only looked at this is a liability yeah but i thought i thought the bankruptcy court really did that as a court did you know everything flowed from the district court since this was not an executive order contracted out to be some kind of liability but in fact based on the contract as drafted by spyglass the assume contract list actually contains executor are you not executor contracts and i'd like to parse through the language of section two point eight a because it's all it takes a little bit of work to get to the right answer the st step under two  is that the parties agree that they would create a list of contrast called the available contracts from exacting or a contracts might they further recognize and this is a forty seven that this initial list of contracts now that's not executive any contracts contracts is a defined term at ninety seven dollars that includes any written contract lease license agreement or arrangement and in fact using this provision spyglass added a number of non executive contracts to the list of assume contracts the assume contract list could be modified it looked to me as if into point a d that only ex contracts are available contracts that can be designated for assumption and obviously both sides agree that we don't have an executor or a contract here so your honor that's the st step that i reference executive or a contract that the st part of the list is from available contracts which are exactly tory contracts then it goes to say it may be updated from time to time after the execution date by the seller parties to add any contracts not just executor contracts and spyglass drafted he was acquitted but didn't the nd amendment put the word executor henri in front of contracts in the sentence that begins all contracts of the sell contracts that provision was corrected by the nd amendment to provide that executive order contracts that are listed on two dollars a which is the assumed contract with us that the buyer has the opportunity i don't see any affirmative indication that spyglass wanted the purchase the investment agreements oh your are there are two places where that's and i think the record reflects otherwise the st is in the asset purchase agreement spyglass made an affirmative statement that they were going to purchase all assets of the donors including the assume contracts the assume contract which is on schedule two point one refers back to this honor this is a situation where spyglass had unmitigated discretion to decide what to put on that assume contract list and what not and what to remove from it prior to closing and the a p a only allows  change to the schedule for nonexistent for executor our contract was closing slide last instead says well wait a minute that doesn't make any sense even though it was on the list it didn't have any value to us but the contract when it talks about the assets that are being purchased does not contain any materiality threshold in many other instances during your throughout the a p a spyglass added things have to be material or there's material prior to january of two thousand and nineteen and say hey i think these are obligations you should assume or i think you already have some of them i'm not aware that your honor and that's not part of the record you know the contract was  the contracts would be the investment agreements were put on that schedule and as of the closing date they were not off that schedule there was nothing to call and say are you sure because the contract language a post closing notice that in fact i'm reasonably certain that that was not served properly but in any event that you know once then that had no effect because they can't change the terms of the asset purchase agreement and session to coin a day which fixed the contracts that they were going to take the capital c contract by post closing notice and in fact mr callahan only quibble about the value of those assets but they were certainly assets as identified on the debtor schedules of assets and on the assumed contract less how going to be a defined term asset for the estate and on the assets have some value for the estate so what's the value of your well your honor the let me address that in two ways the st is they identify them as assets right we don't have to litigate over whether their words about you know how much value there was because they made a decision to put them on that schedule which by the terms of such schedule two point one was a purchased asset if it's on the assumed contract list it's a purchased house that the debtors put a contract on their list  like there's no evidence that those were not valuable to to spyglass and in fact there was no need to point out that evidence on because it was spyglass the draft of this agreement spyglass the put it on the list spyglass that didn't of your say in these non executive contracts were assumed and not really taken off so therefore they're bound by them even if there might not be any value in them to sp i would say i would say that a little differently or are ok they put non executive or a contracts on the assumed contract list they purchased those contracts and all of the obligations and liabilities under those contracts by the terms of the agreement there's no requirement under the us a purchase agreement that these contracts in a certain value materiality threshold there's not spyglass going to put in spike last you know could have taken these off the list there were so many contracts on the legs that it was impossible to go through and identify what contracts they wanted to keep and what they did they drafted it this was their agreement so you would you agree that if they took the group your investment agreements of the list prior to the closing you don't prevail i would say that with respect to the contracts that were not on the june statement we would not prevail if they had taken them off the assume contract list for purposes of the argument that we're currently making we think your honor that there are ancillary arguments that they were title agreements or our contract price but that's not the main thrust of our agreement we think th plain language of the agreement provides that if they were on that assumed contract with us and then taken off for non executive our contracts prior to closing they have to live with the specific language that they drafted  amendment and the word contract without a modifier of executive henri appeared three times and after the amendment the words executive or a contract appear twice but contract capital c without the modified language still remains confirming your thank you on your honor st of all i think we've got a recall there was testimony that was a witness at this hearing in front of the bankruptcy court it was why movies witnesses mr birmingham and he his testimony was pretty revealing ok st of all when we go to whether or not this is in a get as opposed to  unnamed unspecified kind of investment his testimony is what led the district court and bankruptcy court to conclude that this was an instrument for the payment of money he testified that there was a majority well i think that points it's not on the table this point let's is it your position you try to read designate all of the investments as excluding contracts but perhaps ac missed a few but it's a point that we intended to designate all of the investment agreements as non assumed contracts that the investment agreements were not assets they were liabilities and that any manipulation of the language here and and the history here doesn't change the facts so that my client would have assumed a liability for which it got no corresponding benefit ok mr mr birmingham's testimony is pretty clear about the available benefit to my client iran if we look at the provisions of the agreement and as i said in the last appeal you put it in context trying to buy these assets without would come through that which were all the problems of the weinstein company and not only you know the very public allegations but the fact that this company was run in a manner which led it to chapter eleven so what it what it what is what is your primary argument my primary argument your honor is that these were not assume contracts that the even the parties cannot render a non executive contract executor that these were debt obligations and that the language of the asset purchase agreement and after the speech that obligations you want to you can have a non recourse debt obligation is that all the in disha of debt as the bankruptcy court and district court found it at maturity date it had guarantees and some of them had security interests what you can't have a security interest or something which is not a debt you cannot have a guarantee for something which is not a yes but apparently there were no financial statements  it's even if there was that it was not secured right yes but it doesn't that doesn't change whether if it's an unprotected security interest just didn't change the fact that a security interest is only granted in connection with  ok i thought your one of your primary arguments is that the investment agreements are not purchased that sets because they are not excluded assets because they are actually that they are excluded assets human and one of the and they are excluded assets and there is no at that that goes with these agreements now the point i'm trying to make that looking in the context of the order iran or for an assumption of an obligation like this especially when the excluded liabilities include any indebtedness for borrowed money loans or facilities or the debt instruments any assumption would have to be clear and unequivocal and if you look at the language of the order itself which has the broad typical delaware exclusion language it excludes any liability which this could arguably fall into for example at paragraph a of the order it not only disclaims liability for debt but for any interest in any ownership interest in any a or any interest related to any assets so whatever these agreements are we think their debt they argue that it's an investment agreement their investment agreement is either debt or equity they clearly fall within the category of liabilities which are excluded and for a liability like this to be assumed in the face of the other like it's the assets are what on schedule two point two is that correct yes your honor and the investment agreements you know that are not noted there and i would go to the you know the definition and to point to and in these agreements in our opinion for clearly within that definition  actually what's in your stronger argument would be under twenty two dollars that that was standing any provision piracy i mean only the assume liabilities and is not assuming any other liability of any seller party of whatever nature all such liability shall be retain by remain liabilities of the seller parties and that that is that's what i was referring to your i'm sorry that's referring to two four say ok and the and the language of the sale or the free and clear language which the lawyer recites was important to my client and was important to the purchase the free and clear language was of extreme  importance in addition to two point four c i was thinking i might want to look at two point four s yes your honor that that is another one of the points it is not in assume contract the definition of assume contract is a subset of available contracts and available contracts are clearly executor or a contract the two hundred argument by appellant here is that somehow the parties agreed to treat point eight defines the billable contracts for st as only executive or it contracts but then after that initial definition broadens it all contracts i don't believe that that's an accurate reading of that provision ok i don't know what would you just walk through that would i think he and i think in that provision available contracts are always executor or e contracts i think contracts so there is no broadening of the scope later on iran because everything that as you said relates to in dish of executive henri contracts causing notices to parties if they're not it's not a reason why you have to send a notice to a party of the assumption so that they can contest the cure and the bankruptcy judge recognized that what happened here was a standard practice that she had seen in dozens of cases over the twenty years that she's been on the bench and she pointed that out to why movie and pointing out the disclaimer now the bankruptcy court recognized that assume contracts were a subset of a bell the contracts the district court recognized that assume contracts were a subset of available contracts which is limited to secretary contracts and why movie has never been able to explain why that doesn't preclude their argument about the assumption but i mean i mean the hardest point for you is about on two point eight  about me think twelve thousand three hundred and forty five about six lines now and it says to add any contracts not included on such schedule as the execution day in any contracts doesn't say any but but so it seems to me that you've got one of the easiest ways for you to prevail would be to say the only reasonable way to read any contracts would to read any contracts as meaning any executive or the contracts not any and on executor of contracts and i never doubted that was the point i think that was the point of art as i was making very poorly i guess but there is a reference to secretary contracts in this in the very st sentence in this paragraph previously it did not appear yes your honor ok and i think that is a clear indication of what was intended here and that was fixing you know the possible ambiguity that not having it in the original contract in those places meant but that i mean that amendment fixes it but even if you don't think about the amendment and you look at what this paragraph does and the fact that it's a discussion of kmiec your amount and the right to exclude contract it's clear that that entire two point it section would only make sense in the context of executive executor of contracts it talks about consent to transfer which is another thing which is dealt with by three hundred and sixty five of the bankruptcy code so even if it wasn't fixed in the amendment and i believe it was fixed in the amendment a common sense reading of this provision means that it can only apply to executive henri contracts and the assumption process that bankruptcy courts go through with with the executor a contract because this section two point eight lays out that process so for the for why movie to rely on that provision in two eight as their entire argument for assumption of these obligations is just a fallacy because not only was it affects in the amendment but hundreds of contracts attached to these agreements and they tried to exclude them all they may you know they may have missed one but if you look at that i mean it's sort of like move a certain fund bankruptcy court i said they're trying to you know it's like a gotcha china say you tripped you know you made a football team and now you've assumed this obligation yet if you look at everything else in this a purchase agreement and in the sale order the the great weight of the evidence and all the parties indications are that this type of obligation was excluded well that's that's why  this is a protection for a buyer who comes so what what why movie is trying to do is up set all the assumptions that go into a bankruptcy sale because when you have a sale of all of the assets of a company of this magnitude and it's complex for buyers to be worried about a football in these notices would destroy the process of bankruptcy sells because the bankruptcy sells as is found in the order as a stack record recognized it is all about separating the assets from the liabilities  paragraph a so this back and for why movie to disregard the fact that there is a broad waiver in every one of these agreements that listed the scam every one of these notices that lists the order is just disingenuous i mean the facts are here and the other thing that shows that they were just trying to this is a late created argument is the fact that they did not appear in the bankruptcy case to our make this argument until after the language an account with account agreement where they felt gave them a leg up saying that this is a non executive or a contract and a court ruled that there was an obligation that these contracts are very different because as mr birmingham testified there was no intellectual property that was transferred under clear in up until they saw something in the congress and once again i would point out the fact that the cone and the other town party agreements are different because there is a contractual there's a change to the a p a where those post causing obligations participation payments were assumed the post closing for the time that that spyglass enjoyed the exploitation of these of this intellectual property is no corresponding provision with respect to why movie and common sense dictates that they wouldn't be because there is no benefit and if you review and mr birmingham  nd amendment that if you look at the nd amendment and there's a red line in the record that shows exactly what term contracts were modified at eight thousand nine hundred and forty eight the reference to the contracts that could be added to the list of available contracts to create the assume contract with us was not modified it was only a subsequent reference to contracts that could be where the fire had the right to designate them for assumption or rejection that was the change not the earlier provision could it could connect us as your question about what i think is is your strongest point maybe i'd like to hear your response you know responses against your strongest but i think your strongest point is this this clause about six lines down and two dollars and a that says any contracts not that you can add any contracts not include but at least it looks to me like the st part of the definition of available contracts says section two eight of the disclosure statement only will contain executive ory contracts so it struck me is a schedule that by definition can only include executive ory contracts so when we read later on what can be added to a schedule that schedule definitional ie can only include execut contracts so isn't the best reading of that line about six lines down when it says you can add any contract well the only way that that contract can be added to a schedule of only execut contracts is if that contract were itself executor what do you say to your honor i don't think that's the correct reading of this action this actually sets forth the schedule of sassoon contracts which are the contracts that spyglass i'm there's no other place in this agreement where they put contracts if they're going to take the common agreement was on here by the way there's not a specific provision that sets out in this agreement that the cohen agreement gets special this was the one place where they bundle together all contracts and decided that for some they would be they would have flexibility to assume and reject them and for others they would be on the list and we know that because they they created the list themselves they then use that section three hundred and sixty three dollars to acquire the cone contract which was on that list and and agree that then the bankruptcy court ruled that if you're going to take that call on contract you're going to  contract that's nonexecutive or under section three suits you through a bankruptcy code you have to take all the prospective obligations and that's what they agreed to do we're not asking them to pay for obligations from the beginning of the world until a position  under these investment agreements were asked we're saying that we should be treated like the company for him and where they have an obligation prospect of lee once they take the contract they you get asked about it as well having any provision in this agreement the buyer is assuming only be assumed liabilities and what they reference in to point you know and if they specifically identify that  contract that is not assumed contract so if it's a assume contract by definition there picking up the liability they didn't say all liabilities under any non executive are contract or only part are you calling so far is to say that the omission of executive henri from any contracts in that six line actually operated to their benefit it to the extent that gave them additional flexibility and that it wasn't just an oversight that was everyone's meaning but not expressed in this isn't some after the fact super close read but this actually had functional value at the time it played out additional flexibility that could be viewed as consideration for the whole deal we said we revisit your honor as they decided that it was to their benefit to add non executive ory contracts to the assumed contract  they made that decision they decided that that was to their benefit to make sure that parties the two like cohen couldn't agree that they're not exactly sure a contract wasn't taken and they repeated that by creating a schedule by not taking the not exactly contracts off the schedule by saying by putting in different places like i just read that liabilities if you're if you're a contract not on the assumed contract with us we weren't going to tell you they try to make it abundantly clear that if you were on that list executive or you were not you have certain rights post closing and if you weren't on that list you weren't this provision only dealt with non executive contracts as you said those provisions would be superfluous but it does it deals with executive power and non executive contracts and the provisions that you're referring to deal with how executive ory contracts on the assumed contract list are going to be treated and the rights that spyglass would have under that as these provisions still have value is at least as long as there is executor of contracts on the list or the potential for exactly contracts contracts that the bond that the seller put together were executor in congress and then the parties agree that subsequently the parties could at spyglass without any contract that list but with respect to the ex tory contracts that were defined as the available contracts and any other executor contracts that were added spyglass law to make sure that it has certain additional rights with respect to those executor congress it would have been easy for spyglass to say to put exactly tory in front of every reference to contract it's actually two dollars spyglass did spike less could have created a separate schedule of not executive order contracts and dealt with them any way they want and they didn't this is their contract and we're just reading what they wrote and with the bankruptcy court and broke i mean at one level though isn't there isn't there i mean i mean there's a little oddity to this with the fact that it might not feel like purchasing to make sure that you're actually buying what you write that there's no difference your honor than if they took a piece of real property and listed in nasa and there was environmental contamination on the property they took the asked at how they deal with the liability associated with the asset may be you know treated under the bankruptcy code or in the contract so that lobola turns out later they have buyer's remorse but they're stuck with the asset and the live billeted the flows from that asset and we know con agreement they admitted to the bankruptcy court and the bankruptcy court order that they had to pick up liabilities associated with these assets that they were acquired under section three hundred and sixty three of the bank and i just let's run through see if i understand something here to be and as soon contract a the st sentence correctly but your premise was incomplete because to be an assumed contract the st step was that there was a list of available contracts which were exactly toward the next in the next sens the parties agreed that any contract could be added to that list exactly tory i'm not exactly tory and then the definition and so once that schedule is put back with me to be and a vailable contract it must be a list of executor a contract correct correct and if you are not an available contract you can't be an assumed contract can you yes you can be your honor because stuff the st step of available contracts is to create a baseline d group of congress those are prior to the closing date buyer in its sole discretion this is down further into point right by written notice shall designate in writing which bailable contracts and you can't be available if you're not executor ory because you can't because available is a subset of assume contracts and assume contracts have to be executor oil so it would seem that if that avenue is is can think of another avenue to go your way could a purchased asset have a purchase asset but the problem i have there is you can't be a purchase asset if you're an excluded of asset is under two point two and that refers to schedule two two and that says a schedule two point to all contracts that are not assume and assume contracts under two dollars a must be executor well your honor i think even just looking at section schedule two point two helps prove the point and gives our reading you know more more legs because if it was true that only assume contracts only executor and congress could be assumed congress they wouldn't have needed to modify in a separate amendment section two dollars ways to provide all executive ory contracts that are not assume contracts are excluded assets they could just rested on contracts but they decided to change that there as opposed to changing it in the six line of two point a day and they have no explanation as to why as of the closing all of the investment agreements were on that assumed contract list and mckone agreements rommany assume contract was that right now this is not a gotcha this is a buyer's remorse situation where they decided that they didn't want to keep a what's obligated under those contracts on a prospective basis their remedy for mistakes or error or whatever hell that their they come up with would have been against  we left the fact that contracts all any contract could be added to the assume contract with us and never took our contracts off the list and based on the plain reading of the agreement and their own schedule to point to a split of assets it's looted us that's are all contracts which as you say is a very very broad term actually your honor i'm sorry i think you may be looking at the non modified version pursuant to the nd amendment that now reads all exactly tory contracts not contracts that's set in a one thousand and twenty one that's the red line version showing the change through the back door somehow you are as you are sue you it is the assumed contract because you're not excluded is that what you're saying your honor it's not actually through the back door it's through the front door section two point a day all right provided that the going if you're not excluded you're included that's their binary choice is under the but the way this contracts is set up your honor is that there are there's a binary world if you're an asset you're in their own purchased a house or an excluded