the issues in the case so i'm not going to belabor repeating all that i'm just i would just like to point out to the court that this is really an issue of whether there is an a material question of fact  p conceived this scheme of selling off many of its real estate propert and we know what the scheme was because we have all that evidence when they concede that that was part of their decision to sell the properties didn't decide to sell one property here one property there one property there as a separate decisions they decided to sell a bulk number of properties and they decided how they were going to sell them and they came up with this plan our scheme of how these properties would be evidence in this record showing that that the situation that they want to get out of the real estate business i don't think it's properties anymore was part of that bad faith decision on their part yes this was a business decision clearly it was a corporation making a decision to sell property so nobody's that disputing that this wasn't a business decision but the business decision was not made in good faith and in the normal course of business that's what decision to sell a property is wasn't made on a per property basis the decision was made as we're going to sell all these properties and we're going to in the course of selling these properties put in a system for suing to which third parties have no choice but not only on the fair market value of the real estate but also on the value of the ongoing franchisees goodwill ok so you have the business problems right i'm not sure i understand the question well i mean the initial decision to sell is not is not what's at issue here is that well it is what's at issue under the p n p a the initial be in good faith and normal course of business and what we're contending is it's not merely the decision we're going to decide now we're going to sell these properties now let's decide how we're going to sell these properties what we're saying is that that is one decision and i understand that but i mean if you don't you don't merely a landlord of a piece of real estate that's somebody subleasing who decides to sell that real estate and that's the end of it we wouldn't be here that was it this is a situation where you have a patrolling marking practices act the federal act passed by congress that protects the franchisee dealers which provides that if you are going to non green you a franchise you have to comply with certain requirements for one of those appliances the decision bidding according to i think that is the one of the judges on one of the cases use the normal market forces as if it's a firm so because more normal market forces are involved b p is just standing back and letting the market decide what the price of these properties w was going to ensure that third parties would have no choice but bid on the market on the value of the franchisees goodwill and that's undisputed in this case that th scheme right off the top there was no no doubt that the goodwill would not have been that on would you be here today now so that really gets down to the whether or not the decision to include clue good will or not in accordance with the procedure mandated by the petroleum act you really don't have any good right by the way we are not contending that b p because one of the aspects of life bill was included here is because b p was not only selling the real estate but they were also telling third parties that if you buy this real estate we will give you a franchise in fact it made it mandatory that if you buy this piece of real estate for the dealers they're in this case you must agree to a fifteen year franchise without us that's one of the condition for purchasing this property we're not necessarily contending that that was in and of itself improper because the p in this case wanted to get other real estate business but they wanted to retain the volume that was coming into it through it and the gasoline volumes that each station was selling to the public and they advertise their receipts from the ampere many markets that were being sold and that fact by itself shows b p s intent because there's no other reason to advertise those things except to entice third parties to bid on this property knowing that they're going to have a fifteen year contract and to sue because they're bidding against each other to take into account what that property is generating business wise and that doesn't belong to b p hi i agree with you that the property is being sold bidding on you only have the right to be to get to get the same right of first refusal and there's nothing in the act which would indicate that congress intended the courts to look in to see what the third party determined to pay including your good will be the difference between what the law and furniture thinks are of buildings are worth and what it's worth as a going business which they're selling it for worth when the the pm p s t says that all they have to do is to give you mr franchisee what they could have sold it for even though it included the goodwill i e the excess of what it was worth if they were just selling it for my own building and fixtures the act presume that when the third party is bidding on a piece of real estate that he is being driven by market forces is making a bid to purchase a piece of real estate that the franchise of franchisee does not have the ability to challenge that then he must accept that as the fair market value of the property even if the offer includes goodwill right exactly now the problem here is the mean there is the case of alice which does talk about in that case there was a third party who was buying a bulk of properties so the multiple properties and it was impossible to determine what value the third party was assigning to each separate property because they were paying a ball price for a group of properties in that situation the court said well here we are going to allow you to inquire into what the third party into what the fa sales they are required by the contract to submit to a fifteen year franchise agreement so they have all these things but what i'm looking at is so long as i think the act what price they get they give you the right of first refusal or better well it's so they're selling unquestionably they're selling the property for more than the property it's worth they're selling it because if they give you the right of first refusal it's not that they can sell for whatever they want they can sell what they own for whatever they want and they do not own the goodwill of the business whether the question is whether or not you really have a right to the good of that business when you're a franchisee subject to their right of selling the property that they own on which that business is located if you're right it's not really a true analogy but if you're a if they hadn't been on renewed which if if b p did not comply with the p and p they would not be in on renewed they could sell their business to a third party absolutely but the selling selling segregating the goodwill from the assets would these properties to third parties out in the open market and get a third party offer they could have gone directly to the dealer and made an offer to the dealer pursuant to fair market value of the real estate now they didn't do that in this case but they had a right to do that under the p n p as well and had they done that b p would have been bound to limit its offer to a price that approaches fair market value and that means that it would not worth another three hundred thousand because they say to the franchisee look we're buying this property and we're going to give you we're going to give the five hundred thousand dollars for  and your argument there would be you're selling me my own good will but i think it is going to think that property they want they can say look the physical assets are worth five hundred thousand but the fact that you put the physical assets together with a friend with with selling gasoline my property is worth eight hundred thousand and your argument again would be that you're you're making me buy my own good will that's correct yeah and it would not be able to do that what you're saying they cannot do under the p m k because it was created to protect deal or to give an opportunity when it went well company decides they're going to get a business at that station or terminate you to give you an opportunity to continue in business we're good we'll you concerned and so the piece that does not allow a franchise is or to so you back your own good will it can only sell you what it owns and what it owns is the real estate the equipment improvements now when you're dealing with a third party offer which is what we're dealing here with it becomes a little bit more murky because you don't have any control over what third parties are thinking when they're making bids on your property so you just have to accept that what the third party is offering is the fair market value of whatever they're buying the problem in this case was is when when b p came up with this scheme to sell the property it's built into it fail safe mechanism by which third parties will have no choice but bid on the good will so in other ways they got their cake and they want to eat it too they got they got to sell the property at its fair market value of the fee simple and they got the value of the growing concern of the business which just bumped up the price of the real estate which if they had gone directly to the dealer they would not be able to do now any and all of these dealers in this case then end up matching those prices and they're still in business  parties do the third parties are their own business man they're making our own decisions and we can't be telling third parties don't bid this much money on the property because we're businessmen too we want to make as much as we can i have no quarrel with that except in this case they set up the sell real estate all the time this is a very unique case of how the real estate is being sold b p could've gone out there said ok third parties we have a piece of real estate do your due diligence we are mandatory requiring you to enter into a fifteen year contract with us on the for the franchise and just leave it at that let the party bid on that but they didn't do that they went a step further they not only advertis sales which are confidential but they also went third parties made did they tell a third party you know what if you decide to back out of this deal i will give you a break up fee and let the third parties i've got out of this these deals thought when our client matched that the price got ten to twelve thousand dollars the break up the so they had an incentive to up their beds because the higher the bid the more they begin to break up the next thing they did is they said well longer don't don't back out now three cases for us three case for us with the record it's pretty clear that they had ready willing and able pyres not necessarily on her because the other problem is what i'm talking about ye that the third party was a multi site i've operated which means he had other gas stations and he wasn't approved to be a multi site operator so there's evidence to that effect as well but that's not the focus of my argument right now what i'm saying is that there is evidence in the record of his that shows the p's state of mind with regard to look we just want to jack up the price on these property that's why they can't and the dealers and end up buying it anyway we'd rather have the dealer bind because they're more experienced in the business anyway but we're going to give them a choice that they can't refuse they got to pay and overpay for this because the third party has got has no choice but to bid on this as high as they can including the goodwill well the problem with that is if you jack up your bid and you never don't maybe the franchise he shouldn't have to buy that the good will because he owns it already the morning appellant's argument essentially asks us court to undermine the roe for procedure that congress established as a simple and straightforward procedure the very inquiries callan pointed out that that is all you need to do is provide an offer that he's at least as good or in this case better than the offer that was provided by the third parties fixed there's no question you're selling your real estate for more than the real estate buildings and fixtures are worth your selling and if you if you didn't sell that isn't going gas station you would not get the extra price which which it's worth isn't going business which was built up by the present franchisee so you are selling their the person buying the property is paying for that property more than the furniture fixtures land and building is worth they're paying for want that for that's going to be worth by reason of going concern aren't saying no your honor i disagree that they are paying for a location that has a branded gasoline station on there it is a in to the extent there is an additional value to that location because on in terms of his concern are are two things that arco advertised the gas volumes and that arco advertised the booths that was raw data that ar it was proprietary data that was just as much arco it was an act arcos it reflected the actual gas sales that arco me to the french zs and it reflected the total amount of food sales upon which arco charged a royal it is simply a logical to believe that in any given circumstance somebody is going to pay upwards of a million dollars and will not want to know all of the information but respect for that property and arco provided that information whether it was good bad or indifferent it provided it with respect to every one of the fifty two sites in every one of those fifty two franchise the accepted the right of first refusal with respect to were putting the data out but we didn't we took an entire portfolio somewhat high performing stations someone were middle performing station some more low performing stations and we provided the information not in order to enhance the value but in order to give full disclosure so that the buyers would have as much information it's possible under those circumstances the other point the counsel seems to make is that somehow by virtue of the fact that there was a breakup the arco engaged in bad faith because it is standard procedure with respect to any third party who is going to be buying a property on a contingent basis knowing that they may go through all the due diligence efforts have all the transaction costs of of entering into a purchase and sale agreement doing the due diligence versus for the environmental and then have the transaction sold out from under him because there is a franchise the standing in the wings to take third party that under those circumstances in order to make it worth their while to cover courts go behind the four corners of the purchased sale agreement and start looking at the ject of intent of the declarer it's under those circumstances it as this court essentially said in l a that when you urge the court not to turn the roper procedure into what we have here that appellant's are arguing which is every case becomes an issue of fact that's what congress specifically designed for procedure so that it would not occur with respect to the appraisals those two are subject to whatever assumptions or manipulation that is provided in the given case and if you actually go and look at the that facility whether it be chevron or exxon in and so what you wind up with is the group of appraisals that are based on an assumption and if the court is going to allow ultimately a subjective determination to be made by going behind the four corners of the documents every case that becomes an issue of fact a battle between the individual appraisers under those circumstances  party for more than the real estate and the building and fixtures are worth they're getting a bid from a third party which shows what a business would make which  at that location and the difference between that is according to your adversary is the goodwill that they've built up by having the gas station there for years so you're in strict economic terms  you are getting more from this for this property than what you the physical property that you own and that difference is the goodwill that they worked off of it but i beg to differ with you in any type of transaction like this the sell arco is entitled to recover that highest and best use value and a buyer is actually going to and certainly it's a typical way to appraise a property going to look at what the income spraining as of a given piece of property and that's all that arco sold under these circumstances if you look that's a blind way of looking at it i think i think you've not acknowledged that you're getting more for this property from the third party better than the property is actually worth you're getting through if you were going to sell this property not for a gas station for just selling it and you would not get the extra bump that  realized by reason of the of the good will of operating a gas station there now you're in a position to solve this real estate and they give them a franchise the third party give a franchise so the difference between what you brand to facilitate but in some cases that value is going to be you know with the one number in other cases we might sell a piece of property where you know in the l a housing market where you're going to put condominiums on they could be worth ten times what it might be worth as a gas station except that you are required to see this view sold as an operational unit right when it's and that's that's part of the coral i think know because you have because if you and i suppose your argument is look we are entitled to to get value for the franchise agreement the guarantee both ways your franchise for fifty years they would say well no you're certainly would have looked at that station in a similar way looked at what the gas sales were looked at what the food sales were and said gosh if i put a chevron station on this property if it really is this property is going to be worth a fortune there are some people who think that the chevron brand might be more valuable than a car but brand out chevron would have would have put a bid and there in that the app point which could have been significantly higher and so whether it was an  article operating station or chevron operating station franchisee still would have been required if it wanted to purchase the station to have matched that offer under those circumstances so there isn't anything magic about the fact that indeed when you look at the record and the fact that each of these franchisees bought these locations each of them made the economic decision that this was a good deal it was better than using their million dollars to go buy the chevron station across the street or the shell station with what that location is worth as a brand that station and once arco followed the pm p a and made the determination in good faith and in the normal course of the business to sell the location anything the franchise e can continue to own after that point ended at that point and arco you know as i said only did not sell anything with the franchise didn't sell their permits didn't sell concede that because you if you didn't demand it you wouldn't make the franchise mandatory three you sold it as a going concern he didn't sell it as this as a standalone piece of real estate we sold it as a standalone piece of real estate with the value of a brand it is still a date with a brand new franchise relationship new type of business completely different economics that whoever whether it's going to be the third party or the franchisee that is going to be operating that they would be responsible for all of their own tanks all of their own environmental problems there would be a different royalty structure that wouldn't be running under the surface right if you let me just put it in a way if you're just selling it as a stra piece of real estate then you wouldn't have the mandatory franchise requirement and you wouldn't necessarily given up the sales figures because that would be irrelevant to someone who just buying real estate you so i mean it was structured t the prior sales would be relevant history for anybody who is going to be entering into that new relationship well it's a new relationship that really with a new business doesn't mean of you but you know if you like to say well and you know think down franks and put joe's on the same location same pumps the second the same business and the economics of the business change radically completely once you know it as i said the environmental days and days of deposition on the part of the appellant to look for any type of information they were not able to bring to the district the the three district courts a single piece of facts that indicated that these were not ready willing and able buyers with respect to the loan issue in the one case that they have raised here the the purchase tailored for him and gave the prospective buyer i forget whether it was forty five days or whether a certain amount of time to get a loan approval they had it not in an opportunity to depose that third party they got a declaration from the third party or if there was any evidence that th power party buyer was not ready willing and able that would have been put forth before the district court so there are there is absolutely no evidence suggesting that these were not ready willing and court any further questions i would just close and urge the court but the only issue here really is a matter of law there are no factual issue khurana management mr saying declared that well the issue with mr seeing is that he was not approved multi site operator so there is no approval at the time that you need to beg for him to have more than one site that's and that's undisputed at the time admit that it was trying to sell the goodwill of the of these dealers because it knows that it cannot do that and that the pm here and that's my point here the focus from b p has always been  look this is a simple procedure the bidders made a bid there it's a harmless transaction and we court should not get involved in trying to parse out whether they're including goodwill or not including goodwill that's not for the court to decide that's the second prong of the test the first prominent a problem that we're here today is are there material questions of fact on the issue of whether b p made its decision to sell these properties in good faith and in the normal course of business p intend to include good will in these bids and this and it's more than just intend to do it but they set up a system where it would be no way that good will could not be included  and i figured well the property is worth so much and i really wanted that property even though i think more than what it was worth well if you are varying on a piece of real estate that's the nature of the market of course you're trying to figure out what is the market value of this property that here the right of first refusal that's going to cost your client more  well it is touching on that if the third party is thinking along those lines at that price bank these are real estate you're absolutely right but here we don't have that here we have a third party who is not only buying a case or real estate they're also buying franchise or they're going to be buying a franchise or going to become a franchisee and they're going to have a gas station that's fully operational has set customers the customers or you can use that station to use the customer service they receive from that station they used all the things all the well that's part of the goodwill you know what if it's dirty then it will make a berth less obviously but but but that's something that the dealer does is maintain the appearance of the station and keep those customers coming back and for a third party who knows they're going to just step into that this dealer is out and i'm in they're going to certainly bid higher than somebody else the question here is not so much what the third party was thinking the question here is what was b p thinking entitled to get the value of branded ranch franchise rights known because they're not selling their brand a franchise that's a separate agreement that's part of the franchise agreement that the third party will now sign and pay a franchise fee for so that's so they're not getting the value of the brand of their brand what they're getting the value for is the value of the business for example if b p had gone directly to the dealer as i previously mentioned it could have done the dealer would be terminated because the b p could not condition that sale on the dealer's continuance of the fifteen year franchise because that would be just their way of getting more franchise fees for a dealer who can't should be terminated in the first place so in order for the peter goes directly to the dealer they would have to they could not condition they could give you are not action to continue the franchise but they couldn't condition it on that and so the dealer would then buy the real estate you would come in remove all the arco branding trademarks and the dealer would continue operating that gas station as either an independent dealer joe's gas or brand with shell oil or chevron but the deal w maintain whatever goodwill he had and that is the relationship with its customers their appearance of the station everything the dealer did to keep that customer's coming back would remain because the dealer owns that the only thing b p would do is remove it from trademarks and that's not that's your problem well the bidding on buying the property the real property the brand is something that's going to come with it but what they're also building is what income that property is generating cannot sell the dealers with will and thinking how can we benefit from it came up with a system by which third party those would be bidding on that and that is the not in good faith normal course of business that we're talking about here and i think if the end if the court doesn't have to decide whether b p acted in good course in good faith in the court the normal course of business because that's a question of fact of the court as to the site is of sufficient evidence in the record from which a reasonable could find that b p did not act in good faith in them of course of business and i believe that there is which is it's actually very well outlined in my reply briefs where it was i point by point to the evidence that discusses as as a