precognition order should be vacated or modified chapter fifteen of the bankruptcy code allows for recognition of foreign proceedings which in titles a foreign debt or substantive relief including the automatic said but this is this is a collective proceeding i mean where there's exactly that part is that that possess the assets in this case that are deriving all of the benefit from recognition in this case are the receivers that are administering a non collective need to look at this in the best way to look at this is that there really is that we could treat this as if there is just one proceeding i realize that there is the liquidation but if the receivers if there had only been the receivership proceed and if there had not been any liquidation proceeding and that that is a possibility under australian law there would be no problem and unsecured creditors are see as a creditor in this case could go after the receivership well that's a little like saying if things were different they'd be different right i mean you posited a hypothetical where the lesion doesn't occur but it did occur and section fifteen seventeen is pretty clear in saying that if ever notice and hearing a formal order recognises there's a four proceeding the court shall enter in order for that fact right i mean there's not any discretion there if it meets if it if you can go down off the list and it means that the court shal worth that in one of the statues that that is and the liquidation did occur i guess my argument is that in this situation where you have a receivership that is dominating liquidation that admits that it's dominating the liquidation with liquidation really didn't even care about getting recognition whether receivers when asked liquidators to get them recognition where you have as i outlined in the briefs essentially a and by definition it needs what the statute calls for so why don't we take it past that because it doesn't seem to me to be you know your your strongest argument and an address for a moment if you would your assertion that there are say there's there's something because as i said what we have here is a receivership that is not entitled to recognition that is the one that requested and is receiving recognition point of chapter fifteen to recognize that if you're going to try to do some international plumbing so to speak the pipe come in our stream isn't going to fit perfectly with the pipe coming out of the united states and you're going to have to have some are some kind of a a valve of some sort that recognizes that they're not perfectly aligned and which adjusts for that new fifteen is set up specifically to say isn't it that we're going to recognize something if it's close enough and wasn't so far out there that we can't in good conscience deal with it we're going to recognize this for insolvency proceedings and respect them and try to work with them my wrong about what the design is absolutely not ok so the fact that there is receivership going on at the same time liquidation that really that really shouldn't be such a big deal it's just two different systems working somewhat differently but as long as the liquidation is going on it's a collective proceeding c as my understanding of this is that when the receivers were appointed they take possession they get the beneficial interest of those assets they get to realise those assets i don't know a property in which the debtor only holds legal title have any access to its assets the receivers are realizing those assets and running the day to day business of the company and i think i cited in the brief an australian treatise that said the practical effect of the appointment of a receiver is to give the secured creditors equitable interest and i guess that's what i'm arguing here and kind of gets even if you give them equitable interest that doesn't wipe out every shred of equitable interest that the company doesn't there's a secular bull redemption that they retain there's rights there's a right to appeal to the court if there's a problem right well there are these rights that that the liquidators i suppose retained to to investigate for pretty insolvency fraud and they had they had been doing that and they had these rights in the event that they found fraud to attack the here's a billion dollars of your business let's keep it going they could pay off the creditors and and that title they've got would be then all the equable rights would be restored to a right yes that is correct ok well that's  that seems like a real a serious likable interest well i still think that under the circumstances we have here the receivers interest as is is the dominant interest and i guess is it it gets back to my point that that they are the ones getting the benefit of recognition they the receivers are the only ones getting the benefit of recognition and i guess that is where my problem is with this case let me ask another question of anything because the unsecured creditors in this case are not going to get anything it's not it isn't just a receiver says i'm not sure why you keep going back to that but here's what i don't i'm not going to put words in your circus mel but what he's saying prompts me to wonder how is it that you think that it's ok for you to say you know what for purposes of the lawsuit we've got here in the united states p b c owns that stuff for purposes of the bankruptcy in our priority he doesn't all of that stuff they accuse you of speaking out of both sides of your mouth you pick a pass c i'm just saying that the receivership hearing issue is the receivership domination of these proceedings and the fact that it is the one that is really driving this recognition proceeding so they own it enough for you to go get it  don't own it enough to have the priority to which law entitle them that's where you come down well they did they don't want it enough to get recognition under chapter fifteen thank you have you your honour's have put your fingers on our responses to our c e o s as arguments the liquidators brought this chapter fifteen proceeding for the precise purpose of getting the benefit of the automatic stay and it did that consistent with us policy that creditors unsecured creditors should all be treated equally and should be able to share the proceeds of in the state program with the they're not going to be treated that way because the receiver ships wants everything to keep driving so what's the response to the argument that this is in effect no different then had there been no liquidation it's only in that you don't have rights it's that it's is no longer a collective proceeding looked at correctly this is not a collective proceeding and there poor you should not have the benefit of chapter fifteen well i would turn back to several of the issues which your honour's have watt asked well what if it's a situation where the security creditors are over secured and their liens can be satisfied out of the collateral well in that situation then there will be proceeds for the and the liquidators have the duty and the right to get back the excess assets to distribute on secured creditors that's consistent with us policy also the testimony came out during the chapter fifteen to theoretical things but the things they say ought to be more work to those things that are actually happening like the liquidators never making any application to the court about what's happening with the assets of the time for that expiring the liquidators not seeking recognition and tell prodded by the receivers receivers are in every meaningful sense of the word driving this ship and that so what's why doesn't that argument carry weight that this is the there's a liquidation but there everybody knows there's nothing left it's all the secured creditors what's what's wrong well there's one very immediate response in this bankruptcy court the liquidators are still investigating whether they were going to bring those claims and that was part of the record counsel brought up the lapse of a statue of patience us to some of those claims which occurred after the proceedings before the bankruptcy court but now that suit has been brought so we're no longer in the realm of the theoretical the liquidators are seeking to recover assets for the benefit of unsecured creditors that's surcharge and i think to determine property of the debtor which is different a property a state which has five forty one we have to look at the local law where the property resides where the liquidation is located where the rights of the receivers  reside and that's australia and the mony of the three acts that appeared in our two day trial were all consistent they all said the property resides with the liquids the receivers have license as they target under australian law to liquidate the assets but title both legal and equitable and that's the consistent testimony even of the expert of r c s is that title resides with the debtors that's property of the debtors and we cite a case of new south wales which says flat out legal an actual title remains with the debtors so we fit perfectly under the statute of chapter fifteen which talks about the stay on the next day applying to the property of the debtors if if if the circumstances were such that  good enough it's property the better we would five forty one the still be something we would have to pay attention to and say even if australian law recognizes that as property of the de not at all your honor first it's a hypothetical situation which we don't have because australia was quite clear but secondly manifestly contrary to public policy is supposed to deal the most fundamental  principles of the united states in the ephedra case the southern district of new york was faced with that argument in a chapter fifteen and it was a case we're a canadian insolvency proceeding took away the right to jury constitution may recognize the right to a jury trial now the other jurisdictions around around the world don't yet you get justice and you have due process so that's the kind of level of manifest contrary public policy hurdle that must be met here and i don't think we've come close to that particularly since five forty one a talks about the estate being a very broadly defined as all legal and equable title these is a very narrow section so i wouldn't overly focus on that it was designed to deal with more of the trading and mortgage securities so to meet the public policy exception here  australia that is consistent with a third circuit case which is cited in the sharon steel bankruptcy case that was a property state case  in that and that's why we look to us for a law and that's why we had the three expert witnesses asked that question who owns the property and they all said the debtors and there was no equi whatsoever to do otherwise here we mean that every chapter fifteen case you put a burden on the bankruptcy court of trying to determine the value of the property subject to the lien value of the liens the merits of claims to set aside liens that's not the purpose of an ancillary bankruptcy proceeding the purpose is to assist the foreign court under principles comedy and  think under those principles the bankruptcy court did the right thing and the district court affirmed and specifically found that under australian law property resides with the debtor this case so  to rule otherwise would reject recognition of the sister common law as your section australia and i think it would significantly set back principles of comedy and what chapter fifteen is designed to promote unique about chapter fifteen is fifteen zero one sets for of the purposes of the statute and ordinarily we don't we don't see that in legislation and that's because this is a model law it's been adopted by some twenty countries including australia and it was promulgated by the un situ unsettled organisation of the un the promise though is that fifteen is to recognise collective in complete control and it's not as if in the united states you had competing classes of creditors who were negotiating to get different things the banks and the could get it all and nobody else's getting anything by their view of the world you know what meaningful sense is that a collective action there is here ship is not a collective action received ships cannot get recognition under chapter fifteen are their point exactly that the receivership here has taken all the option out of the room now i know you said that's not true there's this lawsuit and whether or not that's going to be in the record something i guess will be decided but based on the record that does exist before us how are they wrong with what is what is the equitable interests that still retain my e c what are the rights that the liquidators are still looking out for well if we're going to stick with the record the record as it closed in the bankruptcy court was those claims are still being investigated so if we're going to be fair to both parties i think we need to be fair and that lawsuit is now pending but i think to create a general rule  creditors may be over secured are we going to put the burden on the bankruptcy court to make that determination before granting recognition recognition is supposed to be the magic you need the requirements you establish that you have a foreign proceeding and the bankruptcy court was very careful to go through the seven steps to get recognition as a foreign proceeding and it is without a doubt this judge of record pointed out that liquidation proceedings are collective proceeds there is substantial testimony as to the jobs of the liquidators there's a creditors committee that was formed committee of inspection it was called there was a meeting of  creditors dozens and dozens of creditors showed up with two billion dollars of claims it's the the very definition of a collective proceeding and the fact that there is a parallel receivership where the secured creditors are attempting to chance i think judge jordan got that the rule that we are looking for for this case it is not that every time there is a receivership and a liquidation in a foreign proceeding you must deny recognition it is when there are two insolvency proceedings and one of them as the receivership in this case is non collective and or otherwise doesn't qualify as a foreign proceeding under one a one twenty three of the code and that non collective proceeding controls all the assets dominates and as the sole beneficiary of recognition in answer the point that your opponent is making that just does not work ruling contrary to the measure of chapter fifteen which requires recognition formalised that way doesn't invite us to get into an inquiry about just how over security you happen to be i don't perceive that inquiry as being particularly difficult you could put at a where you have six where the secured creditors only have a portion of the assets where where they're only controlling a portion of the assets then liquidation then recognition i should say is probably more appropriate in that case but when you have a situation where the non collective proceeding is controlling all the assets and getting all the benefit then you perhaps should not have recognition or should at least limit it to whatever right the no i think that the unsecured caruthers unsecured creditors can come over here and make claims against the receivership i think we i guess we only get a leg a leg up in so far as we happen to be