morning matt please the court my name is torrence lewis i'm here on behalf of micro hell in this matter we're here to determine whether the bankruptcy and district court subsequently whether the erred as a matter of law and holding the micro which was a fully vested fifty percent shareholder and involuntary debtor did not have standing as a matter of law  remedies under eleven u s c three zero three against the petitioner sic capital i'd like to start with a couple of bankruptcy code policies just because i believe that they should inform the decision here and these are in the this case which is the subject of the bankruptcy court and the district courts misunderstanding that's in ri miles and also the case cannot sue you damages for themself for their own injury well then how can your client when based on miles so they are not the debtor so well i don't think there's you know there's actually be determination of whether they're the debtor but i think there has to be a remedy in this case where you mean i thought they were sure although they're not of the debtor well they're a fifty percent vested shareholder in the debtor and no doubt that doesn't make them the debtor there they appeared on behalf of the debtor seeking release payable to make its appearing on behalf of the debtor good enough and what and if you think it is what your support for that there in terms of i think there has to be a remedy when a corporation or company it's completely deadlocked someone has to be not the non petitioning party or interest holder counsel to miles decide a factual circumstances similar to this one where you're seeking to re behalf of the debtor as opposed to on behalf of yourself i'm sorry did miles involve a factual situation like the one here where you're seeking to recover on behalf of the debtor as opposed to some unrelated third party it did not i mean i think that the petitioners in it's clear from from the opinion that petitioners in miles were third parties strangers seeking remedies for injury to themselves not payable to the debtor was in this case was there anybody since there were fifty percent shareholders was there anybody who had the legal ability to go into court and speak as the well it would have been able to absolutely if it if that determination had been made in advance and it was not deadlocked so for example in the arbitration that was filed at the same time as the involuntary  titian my client was attempting to determine who could function as the debtor and what decisions we made going forward in terms of restructuring dissolution or what have you and that was foreclosed a determination on what the debtor was going to do was foreclosed by the petitioning creditor here a contingent shareholder  debtor filing an involuntary petition to collect a single debt so in the in the circumstances here if the appellee is correct no matter how much bad faith was involved in the filing there would be no possibility of a recovery i mean i think that the holding below that matter of law so i think that's correct i mean basically not having a remedy in this case allows a bad faith involuntary petitioner to file it with impunity i mean i think that's absolutely what it means party one insider is filing an involuntary petition and no and obviously no other director officer etc is able to or willing to appear to defend the debt or to protect the interest of the debtor a fifty percent vested shareholder should be able to appear to seek an award for that debtor and the debtor never basically it's a glass of wine the way you described it i mean for the court's finding on standing but i i believe that the debtor the debtor never appeared in the bankruptcy court correct not as understanding you can get around the fact that the debtor is the entity with standing because didn't want to act and i guess i don't see the consistency in those positions just trying to wrap my hands around head around that i think that first of all the question of whether or not both parties consented which is right a threshold issue for whether remedies available i think that they did not both consent in the terms  statute means they were on different terms one was seeking you know we filed our motion to dismiss early and then they decided that it would have been a waste of everybody's money and time and so then they filed one but they opposed ours in the sense that we sought additional relief so i don't think it's consent on the same terms secondly i mean the debtor yes i  think there may be some internal inconsistency there but i still think you come back to my client appeared on behalf of the debtor was transparent about that there was no objection which raised an issue that we've also briefed and guard to whether they've waived the question of statutory standing and they sought an award payable to the debtor i think that any any rule that doesn't permit my client to do that basically it's permitting a bad faith involuntary petitioner to file with impunity and get away with it and i think that's contrary to the policy in the code where the drafters took great care to build into the code provisions that would prevent and deter abuse of process thank you thank you we used a lot of your time so  have to be considered is that to say capitals is not a shareholder they had an option to become a shareholder by investing a million dollars in billing kiosks and initial term was they had to build a thousand he asks my client then puts one hundred thousand dollars into this business five hundred fifty represented by a promissory note an additional four hundred thousand and he's got nothing he's got nothing so he files an involuntary petition the notice we're getting from from vibe micro about this they're all saying happen so with that background in fact it's important understand that the this case was dismissed by consent if you read the opening transcript from judge davis who heard this case first thing she asked both parties does every agree this matter should be dismissed is the aug twenty three my client says yes by michael says yes so then goes on to bring about the other issues being raised by this appeal but clearly it was dismissed by consent debtor consent to the dismissal if the how could that have happened if the debtor didn't appear if the debt it informally appear it couldn't have happened unless as micros maintaining all along were standing in the shoes the debtor then they could have done it t for purposes of where we're at it is important to note that i have the mild cases the nights are went through great explanation great detail in the miles case analyzing how we get to the point that it's just th shareholders creditors a century you've opened the door and nobody knows where it's where it's going to end he want five micros not without remedies there's a board of directors for a speed eight there are officers of eight speed eight none of that was under they were going to meet with the board and try to figure out what we're going to do as the officer i believe mr mandela who is a micro was the president of a speed eight no they just jumped in with both feet saying we've got an impasse and therefore we're going to jump in and we're going to talk for the  it's six position that this chapter seven had it gone through would be better for everybody than being where we're at today because the assets would have been collected and liquidated and if sig wants five michael wants to buy the assets they certainly can bid just like  capital could bid on those assets because the corporations basically done this was all precipitated by the fact that they wanted more money from seed capital and sit capital checked what was there and there's nothing there and therefore there's that shareholder notice that that they nonetheless rather meaning his shareholders and trying to iron out what they're going to do about this involuntary bankruptcy they simply jump in and say hey we're the debtor now and now we get to claim fees and costs and i just don't think that's the intent of the statute they've got another matter proceeding the supplement of the record just before the oral argument it dealing with an arbitration in florida involving these parties relative to some of the issues they're concerned about i have a question about there if you didn't take  dr michael actually has other actions going forward against these parties to try to iron this out they don't need to get damages from this court and the bankruptcy court as a debtor they are proceed with other remedies dealing with the  etc but they're certainly not allowed in the arbitration or any other proceeding to under him or a miles to seek damages as the result of the involuntary bankruptcy filing correct miles precludes that jurisdiction so bankruptcy court for damages for the involuntary filing but that doesn't preclude him from seeking other damage for example if in fact the money was bled out of eight speed eight not property they've certainly got a fraudulent transaction that has nothing to do with involuntary bankruptcy there so there are there are other claims they could raise there that would not impact this but they certainly cannot get damages for the involuntary involuntary bankruptcy  ignore miles and the the analysis done by miles with respect to how congress got to the point that they limited debtors to people who can get damages or tourney fees and costs you know chapter eleven much after any chapter of involuntary bankruptcy petition or chapter seven either one and that's the kind of use that we're trying to avoid the other issue or possibility as judge davis heard this evidence that linked the oral argument made this decision she has discretion as to whether to ward tony's fees or not or costs or not a the debtor was not five micron therefore the debtor was not making the claim for attorney she's got so yes clearly if you read her decision she's limiting herself in that aspect to miles whether is a bad faith filing or not without opening a can of yet and so why is he going to put more money into this so it's an involuntary bankruptcy that's completely good faith and so they are in bad faith is a bit of a red herring because number one is not relevant to i don't think there's bad faith here for gets remanded back because it is who said yes and they have a legitimate that nobody ever in any of the pleadings i've read said that sig was not on this money nobody said hey they're not a debtor nobody's disputed the amount cetera therefore i think the creditor stands as been it's not really a functioning company could there be damages what possible damages could there be if they liquidate it and one of the worst ways to hide anything is to file bankruptcy because trustees have a way of finding stuff granted the imposition of a trustee who then certainly go through the books and records of h p a and look at the assets of a speed eight and find out what happened and then liquidate them fairly in equity which what trustees do so the dumbest thing in the world for him to do would do that raised and i think there was some discussion there is no authority obscene and pallies certainly doesn't cite any for how we would've not how that threshold issue would have  been crossed in terms of both parties consent i mean obviously we were seeking different relief than they were they were competing motions the court granted ours i just don't i don't see that issue  because my client have standing as a matter of law to seek remedies payable to the debtor and i think that it's consistent with miles i think that the principle of miles is that it has to be  this case that's very challenging and we appreciate the arguments from both counsel and that case is submitted for decision