Legal Case Summary

Good afternoon everyone. Good morning to you, Judge Alderser. Good morning. Good to see you. And we have both very young, very young people on the bench. Well, if we, if we're as young as you are, we'll be in good shape. That's for sure. We have lazy days today and before we begin, obviously this state court has issued an opinion here and we may give you a little more time. You can tell us what you think that means. And my guess is at the end of the argument, we'll ask you to brief that issue as well. But we'll wait until the end of argument and make that decision. Good, Mr. Russo. Thank you, Your Honor. May it please the court. I have to start my apologizing. I have a very ill-time sore throat. We've all been there

. My voice will carry to California, Your Honor. Would your, would your honors like me to address the state court decision now or? Yeah, why don't you? You have a seat. I'm sorry, just bring up the mic. Thank you very much. The status, first of all, the status of the state court decision is findings and conclusions have been entered. My understanding from Florida Council is that the court intends to make that a final judgment on June 27th. The only post trial motions that I understand, and again, I'm representing having talked to the Florida people involved in the Florida case, my understanding is that I for his filed a motion to disqualify the judge after the, after the judgment which motion I told has been denied. I believe our side has filed some motion having to do with how the rent was paid during the period of the litigation. So we do not yet have a final judgment. My understanding is after it becomes final, then there is a 30-day period for to initiate an appeal. With respect to this court's jurisdiction, I do not believe this court's jurisdiction is affected. I guess we can get into the metaphysics. I do not know what Florida raised you to Cata. Law is as to when it's considered raised you to Cata, but we, there's a reason. Isn't there a strange parallelism almost in the sense that if your position is correct that the bankruptcy court had jurisdiction and it did not issue an advisory opinion, then that's a matter of federal law and a state court can't take that away from the federal bankruptcy court. Is that your position or not? I think once, I think once, if the bankruptcy court's order is affirmed and becomes a final judgment, then it is binding between these parties. I think in this case, state courts do have jurisdiction to decide federal law issues when they have subject matter jurisdiction over case

. And the reason, we have this whole body of law on race to judgment and comedy and all this is because two courts can have jurisdiction at the same time. So at this moment, I think both courts have jurisdiction as a matter of subject matter jurisdiction. The race to judgment, at least this stage doesn't, you know, that much because the same party is winning in each forum in terms of the substantive issue. State courts have, you know, how do you say this? State courts have authority to make wrong decisions. It's even been rumored that federal courts occasionally banqued about 1,000 percent. That is a different matter from, for example, if Florida had a state statute or a rule of decisional law that purported to address what happened in a bankruptcy assignment, you know, that would be preempted if it were, if it were any different from what the federal law is. This just happens to be a federal law issue that was presented in the course of state proceedings and the court decided it. As this court sometimes decides state law issues and diversity cases. Great. Fine then. We'll ask your compatriot across the aisle what his view is on this and why don't you go ahead with your argument here. Thank you. I would like to, I don't know how we're doing time in terms of this extra issue that came up. I hope to reserve four minutes for Rebellion. Yes, we're going to start with 15 minutes again. Would this would happen all the time. I never get extra time after answering questions

. The basic issue is subject matter jurisdiction of the bankruptcy court. It's whether it had jurisdiction to reopen the case to interpret and force its own order. Here the issue is your bankruptcy law question. In fact, the section 365 F3 on an assignment that is made as part of a reorganization plan through by the state. You think travelers and then that he decides it. Oh, I do your honor. I mean, travelers and then that he is, you know, 2009. There you have a settlement that's issued more than a decade before it's reopened. Then there are all these state court claims filed based on common law and state and state statutory theories against the insurers. An insurer who's one of the insurers involved in this very complicated settlement goes back to the bankruptcy court and says, I think your confirmation order bothers this. Bankruptcy court says I agree. Second, circuit disagrees, but not on the jurisdictional issue. It disagrees in terms of interpreting the earlier orders. Spring court gets there and decides that the bankruptcy court was right in the order. But on a subject manager jurisdiction question, which is your honors know is never gratuitous in federal courts. That's never that's never dictated. Spring court addresses subject manager jurisdictions

. Clearly, the bankruptcy court had it. It's got plainly has jurisdiction to interpret and enforce its own its prior order. I believe that's precisely what we have here. We have a confirmation order for a temporary organization plan under which a lease gets assigned as part of the overall deal. Is it an advisory order? It is not. And I think, you know, I think part of what is, gives us confusing is the difference between advisory as we sort of talk about it in terms of, I mean, this court may give an opinion, for example, and tell the district court, you really should take our advice on this issue or say that in some advisory though is a term of art means you have hypothetical controversy. If you look at your court's opinions, which are like most of the federal system, that examples are the in-rate grand jury case that we cited the Armstrong case. In-rate grand jury, I thought it's press well, advisory opinions that gratuitous expression of a legal opinion by court lacking either jurisdiction or a decisiable controversy. And that gets into the constitutional issues in the federal system. You know, in the Armstrong case in 1992, court said, has to be real, has to be non-hypeethetical, has to have an effect on the legal rights of the litigants in a concrete way, in the fact context that permits the adversarial proceedings in the decision. So this is a real live dispute. It's which it's absolutely pending. What is the effect of what happened under this kind of bankruptcy law in this order? It's clearly been litigated adversarially. The fact that the council, this is Judge All Desertio that questioned putting aside the aquarium case. Is there any other case where a bankruptcy court opened a final confirmation judgment at the request of a former debtor who was a litigant in that state court? Is there any other precedent? I'm not aware of that. You know, I'm trying to think you're on a dealt with three-sifty five issues while state litigation is pending. There was a recent case in in this circuit in the CD with my question because I couldn't find any

. That makes me feel better. We agree with you in this case. We will be making some new law. I think you will be applying subtle law in this in a factual situation that may not have really been in precisely this context. Whether it's, I think it is. I'm saying that because what we have here is an issue of comedy. The here we have a judge, a bankruptcy judge who has been asked by one of the litigants in the state proceeding to write an opinion, to open up and write an opinion. Now, the question in my judgment is that there's a serious question of comedy. If I were a state judge and I have been a state judge and I know Judge Sirica has been a state judge and suddenly the federal court came in and interfered with my proceeding, I would be screaming the feds are out of again, they're clapping on federalism. You're out of, I think that's a good question. Let me respond to it a couple of ways. First of all, let me distinguish the city and then second part, I want to give to some of the precise factual situation in this case. First, comedy is of course a different concept from subject matter jurisdiction. Comedy doesn't come into play unless a court has subject matter jurisdiction and declines to exercise it. What was the timing of when this these suits happen? This is not a situation where a case was long pending in a state court and a litigant wasn't happy there and said he I'm going to run over and find a better forum. All these suits happened virtually simultaneously. I for instituted the state court action at about the same time we were going to the bankruptcy court

. I think it's all red June of whatever the year is. At that point, my understanding, and I represent our council had even seen a copy of the state court suit. The same day that we filed the federal bankruptcy proceeding, we then filed protecting our rights, an action in the state court so that this is what lawyers do when we're counseling clients, know where for sure where it's going to be decided. So you have to cover it's not a situation in your honor where a state court had long had jurisdiction over a case and then all of a sudden a federal court interfere. These proceedings were instituted virtually simultaneously. If the court has further questions on advisory opinion, I can talk briefly about the Martin's aquarium case if the court would wish otherwise I can move on. That's not okay. Thank you. You're on. There's been an argument made that a nobley was presented below. It's not saying it's appropriate. You can raise alternative grounds for permits, but it's a waiver. But we saw in the briefing now a long argument about Stern v. Marshall, one of the nice things about the appellate business, what I think whether it grow, whatever side of the bar you're on, she used to know about a lot of things that you didn't know before you started on a case. And I gather Stern v. Marshall is now sort of this huge case in the bankruptcy field in which the Supreme Court held that federal courts not was standing that the bankruptcy code may technically extend jurisdiction. You not have jurisdiction to resolve purely state law disputes

. Stern v. Marshall courses the canonical Smith case. What you have there is a defamation claim on the one hand by Anna Nicole Smith and her stepson, her stepson, she brings a case for defamation in the bankruptcy proceeding. She counter claims claiming that he interfered with her expectation of an inheritance from her husband and all this gets resolved. What the Supreme Court said is that that is purely a state law issue and non-archal three judges cannot constitutionally exercise jurisdiction over these things simply because the bankruptcy court, or a extra-be-court statute may technically extend jurisdiction. In the northern pipeline case before that, that was another case where you had technically related to the bankruptcy proceeding because it involved different parties in the bankruptcy proceeding or claimants which had reached of contract and its representation of the rest claims. Supreme Court said, no, those are state law claims and you don't have jurisdiction to decide this. Then there's Granthenes Yara which was the third case discussed by our colleagues on the other side which involved this and I confess I don't totally understand it involved this public rights exception to when you don't have jurisdiction over state law claims which seem to go on and on and on involve a lot of metaphysics but the point is it doesn't arise unless first of all you're dealing with a state law claim. This is not a state law issue. This is the effect of a bankruptcy provision on what happens to an assignment in the course of a bankruptcy and what it says it doesn't destroy the anti-assignment clause. It just says the anti-assignment clause doesn't operate in that assignment that occurs as part of the bankruptcy proceeding so that the person whose the debtors assigned he emerges from the proceeding with the same rights that the debtor had and that is a conscious. You're saying counsel that in the Florida case it was not decided on the basis of federal law. I'm not saying that you're on her. This issue was decided on the basis of federal law on the Florida case. The Florida state court had an issue of federal law presented to it which it resolved. It resolved it in our favor. It resolved it the same way that the bankruptcy court resulted here

. This was the effect of the bankruptcy court provision and the Florida court had subject manager jurisdiction to do so. Even if we assume that both courts have jurisdiction as a practical matter it doesn't make a lot of sense to be litigating both cases in two four. I think that's why we have rules about comedy and why this issue arises a lot but we also have a whole body of law about race to judgment because this happens a lot. What was there an effort to stay the Florida act? It is my understanding that we requested the Florida judge to await with the bankruptcy court we do because it was purely an issue of bankruptcy law. We requested lazy days requested the Florida court to wait for the bankruptcy court to decide this issue about the meaning of its own or federal bankruptcy law and the Florida state court declined to do so. Whatever the comedy balance might have been the Florida court decided no I'm not going to do that. That was its call but there was an effort and the bankruptcy court adjudicated it obviously. It adjudicated the matter well before the Florida state court. The Florida state court Florida state court decision came and still hasn't even issued a final vote. It's not. We were in the situation where we didn't want you not to know about this development but we were waiting until argument week so that we could give you the most up-to-date report. This is where it was going to be in the Marshall case. There is no state law issue here in Florida. As I said before Florida doesn't have a statutory revision. Florida doesn't have a body of court-created case law that says here is Florida law on what happens when an assignment is made. There are state law issues but they're not exactly 365F3 issues. Correct

. There are all kinds of state law issues. You know and with the efficacy of the assignment is purely a federal law. 365F3 means. That's purely a federal law issue. The only other thing I would say briefly before turning over to my posing counsel who will correct me is you can write things in a way that you avoid these provisions. Partly it's going to agree this provision of the bankruptcy code won't apply in this particular deal. It actually happened in this case. There's another provision where you can agree where the bankruptcy law provides that the the debtor won't be liable for post-assignment for breaches. As part of the deal here the parties negotiated that that wouldn't apply and that's in the in the in the plan. But they didn't do it on 365F3. They didn't do anything of the sort. So it shows they know how to do it and parties know how to in the one of the cases cited as an example this by my colleagues on the other side was this Monroeville Dodge where where the parties agreed that a provision I think prohibiting setoffs would not apply. And my understanding wasn't there quarrel with the initial plan. It was they're sort of getting whipsawed that there was a side agreement or an agreement that occurred afterwards that the SINE is getting penalized with in contravention of what all the parties to the agreement understood to be the deal. Isn't that really what there are arguments? I think there are arguments like that. I think that the the bankruptcy court which approved this plan in reorganization or didn't take anything of the sort. And that's why it ruled this way

. On those kinds of issues and the floor of course obviously it's just just a long opinion saying it doesn't credit any of that. So those are issues you could get into. But the bankruptcy court said no. And you know we think it's correct and it's got authority to interpret and enforce its own order. So I have this question. We have this very fine opinion by our colleague Judd Sirica and Inre Resorts. What is the sufficiently close nexus between the dispute and the bankruptcy plan or proceeding for the bankruptcy court to take jurisdiction even if we say it did have jurisdiction? Well I think you're on. What was that? I don't think we even get to you're not asking great questions. I appreciate your patience in giving two part answers. First I think we do not even get to close nexus analysis. Close nexus analysis I believe applies when it's not a court jurisdictional matter but you're trying to decide if it's close enough to the bankruptcy court issue that the bankruptcy court you know properly exercised discretion. Here it's core jurisdiction this involves the confirmation order, the plan of reorganization and what it means. So we don't even get the close nexus. If we look then at what close nexus is. If you look at the cases that the judge Sirica cited in Resorts you have this case out of Montana where there's a sufficiently close nexus because the party claims that one deal where it was going to get preference from the state of Montana on bidding that the state of Montana wasn't involving that was not on that. That was cited in in Judge Scrooge's opinion as sufficiently close nexus as being instructive. There was another case and I will address it on her bottle because I confess freely that it is escaping me right now but I know there's another case that I thought that was also far more attenuated than this but again. First nexus analysis is interesting but the court really does not need to address this is core jurisdiction. I thank you. I mean just hold on and say you touched on the argument from the other side that this matter was contracted around and as I understand it the LDRV's position is that the provision extinguishing the purchase option is unenforceable because it essentially stands in the same shoes as the debtor. It does it stands in the same shoes as the debtor and his sub-registered. So now to manifest it to a third party then the option. It would be subject. The current possessor is right. Current tenants right is subject to the anti-assignment provision. Of course it is. The all the bankruptcy code does is say it emerges through bankruptcy without being extinguished by any transfer that happens as part of the bankruptcy reorganization. Judge Alderser, any further questions? No I think I bothered this thing was counsel enough. I am going to tell my grandchildren that I was called distinguished by Judge Alderser. Thank you sir. Thank you Mr. Risto. Thank you Judge Sir. Good my name is Craig Martin if it may please the court I'm appearing on behalf of I4land holding company

. First nexus analysis is interesting but the court really does not need to address this is core jurisdiction. I thank you. I mean just hold on and say you touched on the argument from the other side that this matter was contracted around and as I understand it the LDRV's position is that the provision extinguishing the purchase option is unenforceable because it essentially stands in the same shoes as the debtor. It does it stands in the same shoes as the debtor and his sub-registered. So now to manifest it to a third party then the option. It would be subject. The current possessor is right. Current tenants right is subject to the anti-assignment provision. Of course it is. The all the bankruptcy code does is say it emerges through bankruptcy without being extinguished by any transfer that happens as part of the bankruptcy reorganization. Judge Alderser, any further questions? No I think I bothered this thing was counsel enough. I am going to tell my grandchildren that I was called distinguished by Judge Alderser. Thank you sir. Thank you Mr. Risto. Thank you Judge Sir. Good my name is Craig Martin if it may please the court I'm appearing on behalf of I4land holding company. Good afternoon. You might want to pull that down just to touch. Would you like for me to address the impact of the state court? Yes, we'll give you some time for that as well. Why don't you hold off on the time? Certainly. And thank you for allowing me to address it initially. Our view of the state court decision is that it is not relevant to this argument today and it was inappropriate to have been introduced because it is not a final judgment. The substance of the opinion itself essentially adopts the reasoning of the bankruptcy court and in our view it's if it shows anything it shows the exact kind of prejudice and harm that we predicted would happen in the bankruptcy court and in the district court by the issuance of an advisory opinion. As a Florida state court judge presiding over at least dispute the opinion from a distinguished bankruptcy judge in one of the most prominent bankruptcy jurisdictions in the country it's no surprise to us that he's given it weight and essentially followed it and that's exactly what we feared. Now if you wanted the district court I mean we did couldn't the Florida judge of equally have followed with the district judge did? Certainly and the reason we filed our letter that we did in response to the 28J letter that Mr. Rusthoven filed is that in our view there was inappropriate use of the bankruptcy court's opinion in closing arguments and in closing briefs. We did not feel that that was appropriate 28J material to submit into this record and made the decision not to submit it. However if the court is going to consider the decision as that the Florida state court entered it's our view that the court should have the full picture and that's why in that letter we ask for the opportunity for supplemental briefing. In addition to how could how could the Florida court's decision impact our review of this case? I'm maybe I'm not giving enough credence to our distinguished colleagues on the Florida state court but I I'm at a loss to understand why I would credit a Florida state court judge or any other state court judges interpretation of the bankruptcy code provision. Yeah and I think that's why we're here. Yes, that's what we do. And when you ask your question about parallelism Mr. Rusthoven the note that I made to myself is that this court's decision on federal law under the Constitution and the supremacy clause is binding on the Florida court but the Florida court's decision on the meaning of what happened in the bankruptcy court is not binding on this court

. Good afternoon. You might want to pull that down just to touch. Would you like for me to address the impact of the state court? Yes, we'll give you some time for that as well. Why don't you hold off on the time? Certainly. And thank you for allowing me to address it initially. Our view of the state court decision is that it is not relevant to this argument today and it was inappropriate to have been introduced because it is not a final judgment. The substance of the opinion itself essentially adopts the reasoning of the bankruptcy court and in our view it's if it shows anything it shows the exact kind of prejudice and harm that we predicted would happen in the bankruptcy court and in the district court by the issuance of an advisory opinion. As a Florida state court judge presiding over at least dispute the opinion from a distinguished bankruptcy judge in one of the most prominent bankruptcy jurisdictions in the country it's no surprise to us that he's given it weight and essentially followed it and that's exactly what we feared. Now if you wanted the district court I mean we did couldn't the Florida judge of equally have followed with the district judge did? Certainly and the reason we filed our letter that we did in response to the 28J letter that Mr. Rusthoven filed is that in our view there was inappropriate use of the bankruptcy court's opinion in closing arguments and in closing briefs. We did not feel that that was appropriate 28J material to submit into this record and made the decision not to submit it. However if the court is going to consider the decision as that the Florida state court entered it's our view that the court should have the full picture and that's why in that letter we ask for the opportunity for supplemental briefing. In addition to how could how could the Florida court's decision impact our review of this case? I'm maybe I'm not giving enough credence to our distinguished colleagues on the Florida state court but I I'm at a loss to understand why I would credit a Florida state court judge or any other state court judges interpretation of the bankruptcy code provision. Yeah and I think that's why we're here. Yes, that's what we do. And when you ask your question about parallelism Mr. Rusthoven the note that I made to myself is that this court's decision on federal law under the Constitution and the supremacy clause is binding on the Florida court but the Florida court's decision on the meaning of what happened in the bankruptcy court is not binding on this court. Precisely. So we should just focus on our case. My view would be that you don't need to consider what happened in Florida and you and you can focus on the briefs as submitted and the argument presented today. However, and that would be true if the Florida court had ruled your way as well. Yes, it has to be. I mean logically it has to be. Now my client might want me to say something differently. Did that question? Oh, you may win on the peel. Exactly. Exactly. And there are post trial issues that are going on that Mr. Rusthoven touched on regarding the whether a new trial should be in front of a different judge. I don't want to go into the substance of that unless the court wants to hear about it because it's we have enough here this year. So looking at this case, how can how can you argue that a bankruptcy court's interpretation of the application of 11 USC 365 F3 is not a case arising under the bankruptcy code. I just cited a provision of the bankruptcy code which sure seems to suggest that the case arises under the bankruptcy code. Before I address that, just sure could you want to start my 15 minutes because I don't want to get into the substance. I've forgotten you

. Precisely. So we should just focus on our case. My view would be that you don't need to consider what happened in Florida and you and you can focus on the briefs as submitted and the argument presented today. However, and that would be true if the Florida court had ruled your way as well. Yes, it has to be. I mean logically it has to be. Now my client might want me to say something differently. Did that question? Oh, you may win on the peel. Exactly. Exactly. And there are post trial issues that are going on that Mr. Rusthoven touched on regarding the whether a new trial should be in front of a different judge. I don't want to go into the substance of that unless the court wants to hear about it because it's we have enough here this year. So looking at this case, how can how can you argue that a bankruptcy court's interpretation of the application of 11 USC 365 F3 is not a case arising under the bankruptcy code. I just cited a provision of the bankruptcy code which sure seems to suggest that the case arises under the bankruptcy code. Before I address that, just sure could you want to start my 15 minutes because I don't want to get into the substance. I've forgotten you. We've got to go on for an hour. I don't want to take advantage of the courts. That may have been one of the more professional acts we've seen here in a while. The kudos to council for that. Thank you. I'm not sure of the courts. Thank you. Yeah, so you know in our view that's the exact question. This case is about whether parties at a pre-packaged bankruptcy case that agreed to settle their disputes and present them to the bankruptcy court can have that settlement agreement as approved by the court be binding or whether the bankruptcy court has jurisdiction to come back and revisit it later. The pre-packed, it shouldn't make any difference whether this was a pre-packed shouldn't. I mean, you mentioned this but I'm trying to figure out why that's significant. Yeah, I think it's in the district court opinion, Judge Andrews has a footnote where he talks about a court that interprets a confirmation order after there's been a long hearing in a trial. Here we have 30 days in the bankruptcy case. The confirmation hearing itself was 18 minutes. So and I think some of the standard of review issues that we raise also touch on the fact that when you have a lower court that interprets an order that's ambiguous looking at what was litigated in front of it and what it intended when it entered that order, that might be a different review by this court than essentially a stipulated order which is what Judge Andrews found this confirmation order was more akin to. The parties agreed on a variety of documents showed up in bankruptcy court said we've all agreed and we'd like for you to approve this and the judge approved it. Now I don't mean to minimize what the bankruptcy court does

. We've got to go on for an hour. I don't want to take advantage of the courts. That may have been one of the more professional acts we've seen here in a while. The kudos to council for that. Thank you. I'm not sure of the courts. Thank you. Yeah, so you know in our view that's the exact question. This case is about whether parties at a pre-packaged bankruptcy case that agreed to settle their disputes and present them to the bankruptcy court can have that settlement agreement as approved by the court be binding or whether the bankruptcy court has jurisdiction to come back and revisit it later. The pre-packed, it shouldn't make any difference whether this was a pre-packed shouldn't. I mean, you mentioned this but I'm trying to figure out why that's significant. Yeah, I think it's in the district court opinion, Judge Andrews has a footnote where he talks about a court that interprets a confirmation order after there's been a long hearing in a trial. Here we have 30 days in the bankruptcy case. The confirmation hearing itself was 18 minutes. So and I think some of the standard of review issues that we raise also touch on the fact that when you have a lower court that interprets an order that's ambiguous looking at what was litigated in front of it and what it intended when it entered that order, that might be a different review by this court than essentially a stipulated order which is what Judge Andrews found this confirmation order was more akin to. The parties agreed on a variety of documents showed up in bankruptcy court said we've all agreed and we'd like for you to approve this and the judge approved it. Now I don't mean to minimize what the bankruptcy court does. Certainly there's not no suggestion that the bankruptcy court didn't review the material and do its job and approve the confirmation order. One more importantly if the parties had slukered the bankruptcy judge somehow the bankruptcy judge could have rectified that when the case was brought back before that judge. That's a fair comment. I don't disagree with that but I think if you look at this record there is no reference of 365 F3 anywhere in these proceedings. My colleague mentioned that 365K which is a provision of the bankruptcy code that says when a debtor assigns a contract it's no longer bound by the provisions of the contract. If you look at paragraph 25 of the confirmation order 365K is not mentioned. What is mentioned is that the settlement agreement is assumed and that the assigning debt or will remain liable on the assigned lease. So the parties didn't mention 365K and yet the settlement agreement and the order as our opponents have conceded were contracted around. We believe and submit to this court that under the same language under different language in the settlement agreement we simply contracted around section 365 F3. There's nothing to suggest that the parties here can't do that and there's nothing to suggest that that's not what they did. And in fact Judge Hardman you asked a question that if this tenant was now to assign the lease in violation of section 13.1 without extinguish the purchase option and the answer was yes. So I think it's clear from this record that the and all of the terms of the lease were assigned. And so what does that mean? That means when the tenant elected to exercise the purchase option it was well within the landlords right to submit that there had not been a section 13.2 assignment. And in the bankruptcy record there are no facts that suggest that 13.2 was complied with

. Certainly there's not no suggestion that the bankruptcy court didn't review the material and do its job and approve the confirmation order. One more importantly if the parties had slukered the bankruptcy judge somehow the bankruptcy judge could have rectified that when the case was brought back before that judge. That's a fair comment. I don't disagree with that but I think if you look at this record there is no reference of 365 F3 anywhere in these proceedings. My colleague mentioned that 365K which is a provision of the bankruptcy code that says when a debtor assigns a contract it's no longer bound by the provisions of the contract. If you look at paragraph 25 of the confirmation order 365K is not mentioned. What is mentioned is that the settlement agreement is assumed and that the assigning debt or will remain liable on the assigned lease. So the parties didn't mention 365K and yet the settlement agreement and the order as our opponents have conceded were contracted around. We believe and submit to this court that under the same language under different language in the settlement agreement we simply contracted around section 365 F3. There's nothing to suggest that the parties here can't do that and there's nothing to suggest that that's not what they did. And in fact Judge Hardman you asked a question that if this tenant was now to assign the lease in violation of section 13.1 without extinguish the purchase option and the answer was yes. So I think it's clear from this record that the and all of the terms of the lease were assigned. And so what does that mean? That means when the tenant elected to exercise the purchase option it was well within the landlords right to submit that there had not been a section 13.2 assignment. And in the bankruptcy record there are no facts that suggest that 13.2 was complied with. If you look at this lease it's a little bit complicated because there's Article 33.3 which says and I think both the bankruptcy court and the district court did a fair job of going through these provisions. The 33.3 says so long as there's not an assignment provided there's been an assignment under 13.2 and the parties are not in default then you can exercise the purchase option. What the bankruptcy court did is say when I approved this lease 13.1 is written out of the contract. So we have a confirmation order that approves a settlement agreement. A settlement agreement that says all-term survive. That's where we leave it at confirmation. But don't don't agreements in all these confirmation orders come with the proviso or the understanding that they're subject to the operation of federal bankruptcy law unless stated otherwise. I mean the default position I posit for your response that the default position can't be that we put all these things in the document to the exclusion of federal bankruptcy law. Wouldn't the position be that they're all put in their subject to the bankruptcy law unless explicitly stated otherwise and approved by the federal bankruptcy judge? I think that's a very good question and in my practice at least we oftentimes state what you just said in a contract. For example if we have a bidder that wants to buy assets and we're representing a debtor we'll actually ride into the contract with that bidder. This contract has to be approved by the bankruptcy court or we retain our fiduciary obligations and if the higher bid comes along we're not going to be bound to not sell it to that party. But I submit that if your question if the answer to your question is yes then at least with respect to prepackaged bankruptcy cases the policy implications are great. Namely where you have a straight

. If you look at this lease it's a little bit complicated because there's Article 33.3 which says and I think both the bankruptcy court and the district court did a fair job of going through these provisions. The 33.3 says so long as there's not an assignment provided there's been an assignment under 13.2 and the parties are not in default then you can exercise the purchase option. What the bankruptcy court did is say when I approved this lease 13.1 is written out of the contract. So we have a confirmation order that approves a settlement agreement. A settlement agreement that says all-term survive. That's where we leave it at confirmation. But don't don't agreements in all these confirmation orders come with the proviso or the understanding that they're subject to the operation of federal bankruptcy law unless stated otherwise. I mean the default position I posit for your response that the default position can't be that we put all these things in the document to the exclusion of federal bankruptcy law. Wouldn't the position be that they're all put in their subject to the bankruptcy law unless explicitly stated otherwise and approved by the federal bankruptcy judge? I think that's a very good question and in my practice at least we oftentimes state what you just said in a contract. For example if we have a bidder that wants to buy assets and we're representing a debtor we'll actually ride into the contract with that bidder. This contract has to be approved by the bankruptcy court or we retain our fiduciary obligations and if the higher bid comes along we're not going to be bound to not sell it to that party. But I submit that if your question if the answer to your question is yes then at least with respect to prepackaged bankruptcy cases the policy implications are great. Namely where you have a straight. All right let me just stop you for a minute because I don't want to get to the policy argument until we deal with the legal argument. Or maybe you're saying you only have a policy argument are you suggesting to us that for non-prepackaged bankruptcies they win but this case is different because it's a prepackaged bankruptcy and you want us to plow some new ground in that regard. I don't think I'm asking you to plow some new ground. I think I was going to make a distinction between a prepackaged case and a non-prepackaged case but to be responsive to your question I'll set that aside. I want you to do that I just want you to get. I want to answer your direct question which is isn't it always the case that an agreement if you don't expressly write that you're contradicting the bankruptcy code that the bankruptcy code always trumps the agreement. I would submit that that is not the case because the bankruptcy code while it has many provisions that govern and are self-executing also requires court approval of various agreements. It's not unusual in bankruptcy practice which is what happened here. To have two parties settle a dispute or litigation or an event that occurs outside of the bankruptcy process but because one party to that agreement is in bankruptcy that they come to the bankruptcy court and they get it approved. I don't think that it's understood in the bankruptcy community or that it is the substantive law that if you don't write in that contract we are expressly writing out of this agreement section x, y and z of the bankruptcy code that you can't achieve that through the language that you actually write. In fact the 365K example is the perfect example. 365K I've looked at the record three times and I can't even find it mentioned in the plan the confirmation order the settlement agreement. The language of the settlement agreement said all provisions will survive of the lease. That is directly contrary to 365K. The confirmation order says the lease is assumed and the lease remains binding. That's directly in contradiction to 365K but neither the settling parties nor the bank. I'll counsel I know that your adjunct questions presented to you but I'm waiting for you to get into the issues you raised in your brief

. All right let me just stop you for a minute because I don't want to get to the policy argument until we deal with the legal argument. Or maybe you're saying you only have a policy argument are you suggesting to us that for non-prepackaged bankruptcies they win but this case is different because it's a prepackaged bankruptcy and you want us to plow some new ground in that regard. I don't think I'm asking you to plow some new ground. I think I was going to make a distinction between a prepackaged case and a non-prepackaged case but to be responsive to your question I'll set that aside. I want you to do that I just want you to get. I want to answer your direct question which is isn't it always the case that an agreement if you don't expressly write that you're contradicting the bankruptcy code that the bankruptcy code always trumps the agreement. I would submit that that is not the case because the bankruptcy code while it has many provisions that govern and are self-executing also requires court approval of various agreements. It's not unusual in bankruptcy practice which is what happened here. To have two parties settle a dispute or litigation or an event that occurs outside of the bankruptcy process but because one party to that agreement is in bankruptcy that they come to the bankruptcy court and they get it approved. I don't think that it's understood in the bankruptcy community or that it is the substantive law that if you don't write in that contract we are expressly writing out of this agreement section x, y and z of the bankruptcy code that you can't achieve that through the language that you actually write. In fact the 365K example is the perfect example. 365K I've looked at the record three times and I can't even find it mentioned in the plan the confirmation order the settlement agreement. The language of the settlement agreement said all provisions will survive of the lease. That is directly contrary to 365K. The confirmation order says the lease is assumed and the lease remains binding. That's directly in contradiction to 365K but neither the settling parties nor the bank. I'll counsel I know that your adjunct questions presented to you but I'm waiting for you to get into the issues you raised in your brief. On the question of jurisdiction and the question of whether there was the nexus in exercising jurisdiction. Yes I'll be happy to address those judge all discernment. Thank you. I would like to hear your position on that. Both on jurisdiction and also on the close to the nexus. Yes we argued jurisdiction from two different perspectives. One is the statutory perspective. One is the constitutional perspective. As Judge Aldecerg mentioned, Judge Serica has written the NRA Resorts International which is one of the leading cases on post confirmation jurisdiction and it says that after confirmation of a bankruptcy plan jurisdiction narrows with respect to bankruptcy case. But as I read that case the judge simply said that you still have to find that close nexus and that close nexus is not unlike the well-known and well-respected third-circuit decision in Pac-Worver's Higgins which says there must be some type of effect on the administration of the bankruptcy case. It is our view here that since this case has been confirmed and all of the shares and the new reorganized entity have been distributed that the resolution of this dispute did not affect a creditor. It did not affect the administration of the estate. It had no bearing on any of the core type of administrative issues that typically arise in a bankruptcy case. In fact, Judge Harteman asked me at the beginning I didn't get a chance to answer if this was a court proceeding and I think my opponent suggested that it is a court proceeding and that leads me into Stern versus Marshall where Chief Justice Roberts wrote a wonderful opinion on statutory bankruptcy jurisdiction and he talked about he found in that situation that under the statute as written the counter claim that was filed was a core proceeding under the statute. He then turned to the next section of his decision and said but Congress didn't have the congressional didn't have the authority under the Constitution to delegate the decision of that dispute to the bankruptcy court. So I would submit that the jurisdictional issues here as properly analyzed and as simply analyzed are that under the facts of the record before us there simply is not a close nexus such that the resort's international case has been satisfied. And I want to be clear that I'm not asking for some kind of per se rule or asking for something unique that there could never be jurisdiction in a post-conference situation

. On the question of jurisdiction and the question of whether there was the nexus in exercising jurisdiction. Yes I'll be happy to address those judge all discernment. Thank you. I would like to hear your position on that. Both on jurisdiction and also on the close to the nexus. Yes we argued jurisdiction from two different perspectives. One is the statutory perspective. One is the constitutional perspective. As Judge Aldecerg mentioned, Judge Serica has written the NRA Resorts International which is one of the leading cases on post confirmation jurisdiction and it says that after confirmation of a bankruptcy plan jurisdiction narrows with respect to bankruptcy case. But as I read that case the judge simply said that you still have to find that close nexus and that close nexus is not unlike the well-known and well-respected third-circuit decision in Pac-Worver's Higgins which says there must be some type of effect on the administration of the bankruptcy case. It is our view here that since this case has been confirmed and all of the shares and the new reorganized entity have been distributed that the resolution of this dispute did not affect a creditor. It did not affect the administration of the estate. It had no bearing on any of the core type of administrative issues that typically arise in a bankruptcy case. In fact, Judge Harteman asked me at the beginning I didn't get a chance to answer if this was a court proceeding and I think my opponent suggested that it is a court proceeding and that leads me into Stern versus Marshall where Chief Justice Roberts wrote a wonderful opinion on statutory bankruptcy jurisdiction and he talked about he found in that situation that under the statute as written the counter claim that was filed was a core proceeding under the statute. He then turned to the next section of his decision and said but Congress didn't have the congressional didn't have the authority under the Constitution to delegate the decision of that dispute to the bankruptcy court. So I would submit that the jurisdictional issues here as properly analyzed and as simply analyzed are that under the facts of the record before us there simply is not a close nexus such that the resort's international case has been satisfied. And I want to be clear that I'm not asking for some kind of per se rule or asking for something unique that there could never be jurisdiction in a post-conference situation. I'm simply asking to do what it's done in both resorts international Armstrong world industries and the Shinango cases and say that the jurisdiction analysis is multifaceted it's one of degree it requires an understanding of the facts and circumstances and then under these facts and circumstances there was not statutory jurisdiction and under Stern v Marshall there was not constitutional jurisdiction that leads me to answer two questions that I'm sorry did you go ahead finish I was just simply going to turn to the travelers v Bailey decision because I think Judge Sharricka you asked if that answers the question and the other argument and I say that that does not answer the question because travelers v Bailey deals with whether the discharge and injunctive provisions of a confirmed order whether the bankruptcy court could revisit those issues and as we analyzed in our briefing the 30 year history of the 1978 bankruptcy code every time it's made it up to the United States Supreme Court the United States Supreme Court has reminded all of us that practice bankruptcy law that bankruptcy jurisdiction is not unending and that it has limits and that it has the bankruptcy court can only deal with public rights discharge injunctions and related type issues that are core to the heart of bankruptcy in this country now when you have a chapter 11 case or chapter 7 case you then do have the authority under 1334 to deal with cases that arise in or arise under the bankruptcy code but I submit that since this bankruptcy case had been closed for 15 months but it does not it did not arise in a bankruptcy case and that it did not arise under the bankruptcy code can it be argued that travelers is not really an interpretation of a discharge I mean the question there was whether the order precluded claims against the debtors insurer so it was not the typical kind of discharge case uh yes and I I think that's a fair question the is I understand the record of that case there was a lot of argument and a lot of evidence taken at the at the bankruptcy court level about whether travelers really would have funded the bankruptcy plan with I think it was several hundred million dollars if it had not received the discharge and the bankruptcy court found that it wouldn't have and that therefore the discharge injunction was I think it was called the cornerstone of the bankruptcy plan why can't it be said here that the bankruptcy court just adjudicated one issue relating to the dispute before it they were they were uh the court was acting under federal bankruptcy law not under state law in the circumstance right and I I think my answer to that would be if that's what the bankruptcy court was doing and if it was using powers the stowed upon it by travelers be Bailey that it needed to develop a better record to determine whether this dispute was really the key to the plan the bankruptcy court's decision actually said that this was you know a key aspect of the bankruptcy plan but there were no there there was no testimony in front of the bankruptcy judge the second time we got back in front of him to to judge Hardamon's whipsaw point you know we just got the decision with a statement that this was a key issue the record reflects that the key issue was a hundred and thirty eight million dollars worth of bond debt that couldn't be paid on time and what's not in the record is whether the parties would have still assigned the lease had the purchase option been expressed the terminated or what would have happened and what would have been the economic impact on this debtor if the parties that had the litigated 365 F3 issue in front of the bankruptcy court timing was important here yeah assuming there was I know it's time to make a judge out and I would just want to know if you will help me out why wasn't there a sufficiently closed nexus in this particular case I guess the the most direct way I can answer that is to remind your honor that the movement in the bankruptcy court is a separate and new legal entity the reorganized debtors are not the debtors the debtors and the landlord entered into a settlement agreement which the bankruptcy court approved 15 months later a new party that succeeded to the lease decided that for whatever reason they wanted to exercise a purchase option and when we informed them that the way in which the settlement agreement in bankruptcy had occurred the purchase option was terminated having dislike with that they rushed back to the bankruptcy court and asked the judge to clarify for two non debtors a dispute that resulted in no monies being distributed to creditors and had no impact upon the administration of the bankruptcy case and for that reason we submit there was no jurisdiction my red light is on so I just I hate to keep going unless I I just want to make sure I understand your position fully you're saying that the the purchase option was extinguished in in conjunction with the planned confirmation document the settlement agreement is that right I think what I would more clearly say is that the full lease was assigned with all its terms and that when this party seeks to exercise the purchase option the way to decide that is to look at 33.3 13.1 and 13.2 and that full assignment was blessed by order of the bankruptcy court the we we we know in the factual background of our briefing and I won't go through due to the time but there was actually a complicated structure of assignments and different corporate entities that were created and one of the conditions to closing was a tax opinion saying this was all going to work in a way that was beneficial to the new owners all of those documents are in what's called the plan supplement in the record but the final documents were never before the bankruptcy court so we don't know exactly how all of the transfers occurred but in general the answer to your question is yes the bankruptcy court approved the plan that set up this structure but there were multiple assignments and assumptions and the settlement agreement only deals with part of that and then 15 months later or some period later question was raised as to whether or not section 365 F3 of the bankruptcy code altered that understanding in any way I think that's fair and the way I would then answer that is to say and then the bankruptcy court decided that when he approved that transaction initially he didn't really mean what he said and that although all provisions survived really section 13.1 of the lease didn't survive and the bankruptcy just may have been dead wrong on that let's assume for a minute the judge was wrong it's his job to make that decision right I mean it's axiomatic that the judges have the jurisdiction power to interpret their own orders is it not I mean maybe this is maybe it's a bad analogy but I'm thinking back to the time I was a trial judge and from time to time after I thought a case was closed and it had been put away in the electronic cabinet oh no they're back well let me let you know that's you know your job is to is to let me give you one analogy that might make it a little bit easier to understand my position this plan and disclosure statement also disclosed an exit financing facility between the reorganized debtors and Bank of America is it if what you're asking me is that the court always has the power to interpret the confirmation order is the true answer to the question posed today that if next week this borrower has a dispute with the Bank of America under that exit facility the proper form to adjudicate that dispute is to come back to the bankruptcy court and say we're having a fight with our lender if and tell us what you really meant if and only if they're dis I assume if and only if it's kind of nice you get to ask me the question I'll indulge you I think the answer is if and only if that dispute arises under a provision of the bankruptcy code if that dispute involves the statute of limitations in New York if it involves New Jersey consumer law it's only et cetera then you don't have a federal jurisdictional hook but if that dispute if one party can credibly walk into court and say we have a dispute here and I think 11 USC fill in the blank has something to say about this dispute it seems that that means you're in in the court you're in the ballgame so to speak within the in the jurisdiction of the bankruptcy court doesn't mean the bankruptcy court acts correctly doesn't get it dead wrong et cetera but as a jurisdictional matter how are you not properly there I would consider a point for an order but remember here we have a settlement agreement that this this resolution this case starts with the need for this debtor to settle other litigation under the lease and entering into a settlement agreement that said certain things are going to unfold in the bankruptcy case it's not that we just have an order here this is not an adversary proceeding where there was an entry of judgment and interest was to compound annually but the judge forgot to put compound and they came back and say did you really mean to say compound annually this is a complicated series of agreements that led to at least an interest in property that the parties are now have a dispute over which is a classic state law type dispute what does Elise mean there's plenty of cases that say a plan once confirmed is merely a contract between a debtor and its creditors and that state courts are fully competent to interpret those contracts so again I kind of returning to resorts and internationals and the questions that judge all of a sudden it was asking me there is a question of degree I'm not suggesting that the answer to your question is there's never jurisdiction to interpret a post confirmation order I'm suggesting that are these facts with the settlement agreement that's really what's being interpreted that it was inappropriate here good any further questions judge all of a sir and I have none thank you good thank you very much mr. Martin mr. Rusthoven until that very last statement council did not even attempt to identify a single state law issue that supposedly was presented to the bankruptcy court and in that response he sought to say that really what was the issue in the bankruptcy court was interpretation of a contract under state law no what was the issue in the bankruptcy court was as a matter of federal bankruptcy law self-executing provision did the assignments that occurred as part of the bankruptcy mean that the purchase option was then gone I mean council is kind of respectfully begging the question here yes the least was assumed in all its parts one of those parts was the purchase option the purchase option is still there and still subject to conditions it exists the only issue is when we're in this bankruptcy and the assignments occur as part of this reorganization plan does the purchase does the landlord consent provision operate to defeat the purchase option in that bankruptcy transaction that's the federal issue no one is there was no provision it just seems it you have to concede councilor don't you that this should have been dealt with before confirmation I mean this I don't think anybody thought it was an issue before confirmation or during confirmation I don't think anybody had a doubt that the effect of I'm sorry you're on I don't mean to rock you well I just if it were a non-issue it should have been said the other way then right I think what we really have here no I don't think parties have to recite and I think it would be an extraordinary rule of federal jurisprudence that would soon be regretted to have to recite in a confirmation order unless otherwise stated herein all the provisions self-executing provisions of the bankruptcy code apply I don't think parties have to recite by the way section 365 three applies here nothing nothing in this bankruptcy plan or in the confirmation order in the settlement says upon the assignments that occur pursuant to this reorganization plan the purchase option is extinguished there's nothing like that you just have assignments taking place as part of and you have people emerging the reorganized debtors and other federal bankruptcy law they emerge with the same rights your argument your argument is that if it were contracted around it would have been specifically identified oh my gosh yes oh my and I would also like to point out one one thing the suggestion that there's nothing here that suggests 13.2 was conglugged I'm sorry the bankruptcy court found in interpreting its own order and in looking at the proceedings with which it appeared to be quite familiar if you read the order the landlord consented to the assignment as part of the reorganization plan so it's not like they didn't know or didn't consent this is when did this be authorized to speech arise when there's lots of money on the line this dispute arose after the fact because all of a sudden exercising the purchase option would be beneficial to lazy days and not to not to i4 it's then that i4 comes up with this argument after the fact oh no no because it was assigned during the bankruptcy therefore the purchase option was extinguished no one thought of that before no one would have thought that that the self-executing provision of the bankruptcy code is a matter of federal policy so that debtors have the ability to transfer exactly what they possess that's the purpose of this provision no one would have thought of that didn't apply in the bankruptcy court had no problem dealing with it i also want to make a couple of points first of all judge Alistair I have not forgotten your problem but I have had had a chance to look up the other decision that was referenced by judge sterica in in resort and it is the birth drum or dalcon shield claimant's case in which the court found there was a sufficiently close nexus for the bankruptcy court to go back and look at provisions about what percentage of attorney's fees you might get as part of a claim that was found to be sufficiently close to nexus here we have here we have something that involves the meaning of the confirmation order itself the meaning of the plan itself the last thing and I appreciate the courts uh I just said two quick points one all this stuff about I don't think the court wants to get into any rule law where all of a sudden bankruptcy courts uh what they do and their discretion authority depends on whether it was a prepack or not my god what that will open up but the main point even here that would at most go to the weight that you assigned to the interpretation of the order it would not go to the jurisdiction to reopen the case to consider and enforce his own order and plan which is spring court said in travelers is right there uh lastly on the floor to decision we were not citing that and I am not citing that as a authority that is binding on this court uh our view of it was there was a related case proceeding going on there been a significant development in that case we thought the court should be aware of it good we think we understand your position they will we thank counsel for excellent argument here and excellent briefing as well um we'll decide whether we want to hear what whether we want to see any further briefing on the authority case and if we do we'll notify you immediately and give you some time to uh to do that again with our thanks yes we have counsel prepare a transcript of this very fine or our arguments absolutely absolutely um I want a third that I I think this is one of the most helpful and well done or our arguments I can remember so thank you to counsel good yeah I would ask you to share the costs on this and to uh and check with the clerk's office before you leave and we'll tell you how to do that good take the matter under advisement judge jaldasert we will we'll give you a call thank you

Good afternoon everyone. Good morning to you, Judge Alderser. Good morning. Good to see you. And we have both very young, very young people on the bench. Well, if we, if we're as young as you are, we'll be in good shape. That's for sure. We have lazy days today and before we begin, obviously this state court has issued an opinion here and we may give you a little more time. You can tell us what you think that means. And my guess is at the end of the argument, we'll ask you to brief that issue as well. But we'll wait until the end of argument and make that decision. Good, Mr. Russo. Thank you, Your Honor. May it please the court. I have to start my apologizing. I have a very ill-time sore throat. We've all been there. My voice will carry to California, Your Honor. Would your, would your honors like me to address the state court decision now or? Yeah, why don't you? You have a seat. I'm sorry, just bring up the mic. Thank you very much. The status, first of all, the status of the state court decision is findings and conclusions have been entered. My understanding from Florida Council is that the court intends to make that a final judgment on June 27th. The only post trial motions that I understand, and again, I'm representing having talked to the Florida people involved in the Florida case, my understanding is that I for his filed a motion to disqualify the judge after the, after the judgment which motion I told has been denied. I believe our side has filed some motion having to do with how the rent was paid during the period of the litigation. So we do not yet have a final judgment. My understanding is after it becomes final, then there is a 30-day period for to initiate an appeal. With respect to this court's jurisdiction, I do not believe this court's jurisdiction is affected. I guess we can get into the metaphysics. I do not know what Florida raised you to Cata. Law is as to when it's considered raised you to Cata, but we, there's a reason. Isn't there a strange parallelism almost in the sense that if your position is correct that the bankruptcy court had jurisdiction and it did not issue an advisory opinion, then that's a matter of federal law and a state court can't take that away from the federal bankruptcy court. Is that your position or not? I think once, I think once, if the bankruptcy court's order is affirmed and becomes a final judgment, then it is binding between these parties. I think in this case, state courts do have jurisdiction to decide federal law issues when they have subject matter jurisdiction over case. And the reason, we have this whole body of law on race to judgment and comedy and all this is because two courts can have jurisdiction at the same time. So at this moment, I think both courts have jurisdiction as a matter of subject matter jurisdiction. The race to judgment, at least this stage doesn't, you know, that much because the same party is winning in each forum in terms of the substantive issue. State courts have, you know, how do you say this? State courts have authority to make wrong decisions. It's even been rumored that federal courts occasionally banqued about 1,000 percent. That is a different matter from, for example, if Florida had a state statute or a rule of decisional law that purported to address what happened in a bankruptcy assignment, you know, that would be preempted if it were, if it were any different from what the federal law is. This just happens to be a federal law issue that was presented in the course of state proceedings and the court decided it. As this court sometimes decides state law issues and diversity cases. Great. Fine then. We'll ask your compatriot across the aisle what his view is on this and why don't you go ahead with your argument here. Thank you. I would like to, I don't know how we're doing time in terms of this extra issue that came up. I hope to reserve four minutes for Rebellion. Yes, we're going to start with 15 minutes again. Would this would happen all the time. I never get extra time after answering questions. The basic issue is subject matter jurisdiction of the bankruptcy court. It's whether it had jurisdiction to reopen the case to interpret and force its own order. Here the issue is your bankruptcy law question. In fact, the section 365 F3 on an assignment that is made as part of a reorganization plan through by the state. You think travelers and then that he decides it. Oh, I do your honor. I mean, travelers and then that he is, you know, 2009. There you have a settlement that's issued more than a decade before it's reopened. Then there are all these state court claims filed based on common law and state and state statutory theories against the insurers. An insurer who's one of the insurers involved in this very complicated settlement goes back to the bankruptcy court and says, I think your confirmation order bothers this. Bankruptcy court says I agree. Second, circuit disagrees, but not on the jurisdictional issue. It disagrees in terms of interpreting the earlier orders. Spring court gets there and decides that the bankruptcy court was right in the order. But on a subject manager jurisdiction question, which is your honors know is never gratuitous in federal courts. That's never that's never dictated. Spring court addresses subject manager jurisdictions. Clearly, the bankruptcy court had it. It's got plainly has jurisdiction to interpret and enforce its own its prior order. I believe that's precisely what we have here. We have a confirmation order for a temporary organization plan under which a lease gets assigned as part of the overall deal. Is it an advisory order? It is not. And I think, you know, I think part of what is, gives us confusing is the difference between advisory as we sort of talk about it in terms of, I mean, this court may give an opinion, for example, and tell the district court, you really should take our advice on this issue or say that in some advisory though is a term of art means you have hypothetical controversy. If you look at your court's opinions, which are like most of the federal system, that examples are the in-rate grand jury case that we cited the Armstrong case. In-rate grand jury, I thought it's press well, advisory opinions that gratuitous expression of a legal opinion by court lacking either jurisdiction or a decisiable controversy. And that gets into the constitutional issues in the federal system. You know, in the Armstrong case in 1992, court said, has to be real, has to be non-hypeethetical, has to have an effect on the legal rights of the litigants in a concrete way, in the fact context that permits the adversarial proceedings in the decision. So this is a real live dispute. It's which it's absolutely pending. What is the effect of what happened under this kind of bankruptcy law in this order? It's clearly been litigated adversarially. The fact that the council, this is Judge All Desertio that questioned putting aside the aquarium case. Is there any other case where a bankruptcy court opened a final confirmation judgment at the request of a former debtor who was a litigant in that state court? Is there any other precedent? I'm not aware of that. You know, I'm trying to think you're on a dealt with three-sifty five issues while state litigation is pending. There was a recent case in in this circuit in the CD with my question because I couldn't find any. That makes me feel better. We agree with you in this case. We will be making some new law. I think you will be applying subtle law in this in a factual situation that may not have really been in precisely this context. Whether it's, I think it is. I'm saying that because what we have here is an issue of comedy. The here we have a judge, a bankruptcy judge who has been asked by one of the litigants in the state proceeding to write an opinion, to open up and write an opinion. Now, the question in my judgment is that there's a serious question of comedy. If I were a state judge and I have been a state judge and I know Judge Sirica has been a state judge and suddenly the federal court came in and interfered with my proceeding, I would be screaming the feds are out of again, they're clapping on federalism. You're out of, I think that's a good question. Let me respond to it a couple of ways. First of all, let me distinguish the city and then second part, I want to give to some of the precise factual situation in this case. First, comedy is of course a different concept from subject matter jurisdiction. Comedy doesn't come into play unless a court has subject matter jurisdiction and declines to exercise it. What was the timing of when this these suits happen? This is not a situation where a case was long pending in a state court and a litigant wasn't happy there and said he I'm going to run over and find a better forum. All these suits happened virtually simultaneously. I for instituted the state court action at about the same time we were going to the bankruptcy court. I think it's all red June of whatever the year is. At that point, my understanding, and I represent our council had even seen a copy of the state court suit. The same day that we filed the federal bankruptcy proceeding, we then filed protecting our rights, an action in the state court so that this is what lawyers do when we're counseling clients, know where for sure where it's going to be decided. So you have to cover it's not a situation in your honor where a state court had long had jurisdiction over a case and then all of a sudden a federal court interfere. These proceedings were instituted virtually simultaneously. If the court has further questions on advisory opinion, I can talk briefly about the Martin's aquarium case if the court would wish otherwise I can move on. That's not okay. Thank you. You're on. There's been an argument made that a nobley was presented below. It's not saying it's appropriate. You can raise alternative grounds for permits, but it's a waiver. But we saw in the briefing now a long argument about Stern v. Marshall, one of the nice things about the appellate business, what I think whether it grow, whatever side of the bar you're on, she used to know about a lot of things that you didn't know before you started on a case. And I gather Stern v. Marshall is now sort of this huge case in the bankruptcy field in which the Supreme Court held that federal courts not was standing that the bankruptcy code may technically extend jurisdiction. You not have jurisdiction to resolve purely state law disputes. Stern v. Marshall courses the canonical Smith case. What you have there is a defamation claim on the one hand by Anna Nicole Smith and her stepson, her stepson, she brings a case for defamation in the bankruptcy proceeding. She counter claims claiming that he interfered with her expectation of an inheritance from her husband and all this gets resolved. What the Supreme Court said is that that is purely a state law issue and non-archal three judges cannot constitutionally exercise jurisdiction over these things simply because the bankruptcy court, or a extra-be-court statute may technically extend jurisdiction. In the northern pipeline case before that, that was another case where you had technically related to the bankruptcy proceeding because it involved different parties in the bankruptcy proceeding or claimants which had reached of contract and its representation of the rest claims. Supreme Court said, no, those are state law claims and you don't have jurisdiction to decide this. Then there's Granthenes Yara which was the third case discussed by our colleagues on the other side which involved this and I confess I don't totally understand it involved this public rights exception to when you don't have jurisdiction over state law claims which seem to go on and on and on involve a lot of metaphysics but the point is it doesn't arise unless first of all you're dealing with a state law claim. This is not a state law issue. This is the effect of a bankruptcy provision on what happens to an assignment in the course of a bankruptcy and what it says it doesn't destroy the anti-assignment clause. It just says the anti-assignment clause doesn't operate in that assignment that occurs as part of the bankruptcy proceeding so that the person whose the debtors assigned he emerges from the proceeding with the same rights that the debtor had and that is a conscious. You're saying counsel that in the Florida case it was not decided on the basis of federal law. I'm not saying that you're on her. This issue was decided on the basis of federal law on the Florida case. The Florida state court had an issue of federal law presented to it which it resolved. It resolved it in our favor. It resolved it the same way that the bankruptcy court resulted here. This was the effect of the bankruptcy court provision and the Florida court had subject manager jurisdiction to do so. Even if we assume that both courts have jurisdiction as a practical matter it doesn't make a lot of sense to be litigating both cases in two four. I think that's why we have rules about comedy and why this issue arises a lot but we also have a whole body of law about race to judgment because this happens a lot. What was there an effort to stay the Florida act? It is my understanding that we requested the Florida judge to await with the bankruptcy court we do because it was purely an issue of bankruptcy law. We requested lazy days requested the Florida court to wait for the bankruptcy court to decide this issue about the meaning of its own or federal bankruptcy law and the Florida state court declined to do so. Whatever the comedy balance might have been the Florida court decided no I'm not going to do that. That was its call but there was an effort and the bankruptcy court adjudicated it obviously. It adjudicated the matter well before the Florida state court. The Florida state court Florida state court decision came and still hasn't even issued a final vote. It's not. We were in the situation where we didn't want you not to know about this development but we were waiting until argument week so that we could give you the most up-to-date report. This is where it was going to be in the Marshall case. There is no state law issue here in Florida. As I said before Florida doesn't have a statutory revision. Florida doesn't have a body of court-created case law that says here is Florida law on what happens when an assignment is made. There are state law issues but they're not exactly 365F3 issues. Correct. There are all kinds of state law issues. You know and with the efficacy of the assignment is purely a federal law. 365F3 means. That's purely a federal law issue. The only other thing I would say briefly before turning over to my posing counsel who will correct me is you can write things in a way that you avoid these provisions. Partly it's going to agree this provision of the bankruptcy code won't apply in this particular deal. It actually happened in this case. There's another provision where you can agree where the bankruptcy law provides that the the debtor won't be liable for post-assignment for breaches. As part of the deal here the parties negotiated that that wouldn't apply and that's in the in the in the plan. But they didn't do it on 365F3. They didn't do anything of the sort. So it shows they know how to do it and parties know how to in the one of the cases cited as an example this by my colleagues on the other side was this Monroeville Dodge where where the parties agreed that a provision I think prohibiting setoffs would not apply. And my understanding wasn't there quarrel with the initial plan. It was they're sort of getting whipsawed that there was a side agreement or an agreement that occurred afterwards that the SINE is getting penalized with in contravention of what all the parties to the agreement understood to be the deal. Isn't that really what there are arguments? I think there are arguments like that. I think that the the bankruptcy court which approved this plan in reorganization or didn't take anything of the sort. And that's why it ruled this way. On those kinds of issues and the floor of course obviously it's just just a long opinion saying it doesn't credit any of that. So those are issues you could get into. But the bankruptcy court said no. And you know we think it's correct and it's got authority to interpret and enforce its own order. So I have this question. We have this very fine opinion by our colleague Judd Sirica and Inre Resorts. What is the sufficiently close nexus between the dispute and the bankruptcy plan or proceeding for the bankruptcy court to take jurisdiction even if we say it did have jurisdiction? Well I think you're on. What was that? I don't think we even get to you're not asking great questions. I appreciate your patience in giving two part answers. First I think we do not even get to close nexus analysis. Close nexus analysis I believe applies when it's not a court jurisdictional matter but you're trying to decide if it's close enough to the bankruptcy court issue that the bankruptcy court you know properly exercised discretion. Here it's core jurisdiction this involves the confirmation order, the plan of reorganization and what it means. So we don't even get the close nexus. If we look then at what close nexus is. If you look at the cases that the judge Sirica cited in Resorts you have this case out of Montana where there's a sufficiently close nexus because the party claims that one deal where it was going to get preference from the state of Montana on bidding that the state of Montana wasn't involving that was not on that. That was cited in in Judge Scrooge's opinion as sufficiently close nexus as being instructive. There was another case and I will address it on her bottle because I confess freely that it is escaping me right now but I know there's another case that I thought that was also far more attenuated than this but again. First nexus analysis is interesting but the court really does not need to address this is core jurisdiction. I thank you. I mean just hold on and say you touched on the argument from the other side that this matter was contracted around and as I understand it the LDRV's position is that the provision extinguishing the purchase option is unenforceable because it essentially stands in the same shoes as the debtor. It does it stands in the same shoes as the debtor and his sub-registered. So now to manifest it to a third party then the option. It would be subject. The current possessor is right. Current tenants right is subject to the anti-assignment provision. Of course it is. The all the bankruptcy code does is say it emerges through bankruptcy without being extinguished by any transfer that happens as part of the bankruptcy reorganization. Judge Alderser, any further questions? No I think I bothered this thing was counsel enough. I am going to tell my grandchildren that I was called distinguished by Judge Alderser. Thank you sir. Thank you Mr. Risto. Thank you Judge Sir. Good my name is Craig Martin if it may please the court I'm appearing on behalf of I4land holding company. Good afternoon. You might want to pull that down just to touch. Would you like for me to address the impact of the state court? Yes, we'll give you some time for that as well. Why don't you hold off on the time? Certainly. And thank you for allowing me to address it initially. Our view of the state court decision is that it is not relevant to this argument today and it was inappropriate to have been introduced because it is not a final judgment. The substance of the opinion itself essentially adopts the reasoning of the bankruptcy court and in our view it's if it shows anything it shows the exact kind of prejudice and harm that we predicted would happen in the bankruptcy court and in the district court by the issuance of an advisory opinion. As a Florida state court judge presiding over at least dispute the opinion from a distinguished bankruptcy judge in one of the most prominent bankruptcy jurisdictions in the country it's no surprise to us that he's given it weight and essentially followed it and that's exactly what we feared. Now if you wanted the district court I mean we did couldn't the Florida judge of equally have followed with the district judge did? Certainly and the reason we filed our letter that we did in response to the 28J letter that Mr. Rusthoven filed is that in our view there was inappropriate use of the bankruptcy court's opinion in closing arguments and in closing briefs. We did not feel that that was appropriate 28J material to submit into this record and made the decision not to submit it. However if the court is going to consider the decision as that the Florida state court entered it's our view that the court should have the full picture and that's why in that letter we ask for the opportunity for supplemental briefing. In addition to how could how could the Florida court's decision impact our review of this case? I'm maybe I'm not giving enough credence to our distinguished colleagues on the Florida state court but I I'm at a loss to understand why I would credit a Florida state court judge or any other state court judges interpretation of the bankruptcy code provision. Yeah and I think that's why we're here. Yes, that's what we do. And when you ask your question about parallelism Mr. Rusthoven the note that I made to myself is that this court's decision on federal law under the Constitution and the supremacy clause is binding on the Florida court but the Florida court's decision on the meaning of what happened in the bankruptcy court is not binding on this court. Precisely. So we should just focus on our case. My view would be that you don't need to consider what happened in Florida and you and you can focus on the briefs as submitted and the argument presented today. However, and that would be true if the Florida court had ruled your way as well. Yes, it has to be. I mean logically it has to be. Now my client might want me to say something differently. Did that question? Oh, you may win on the peel. Exactly. Exactly. And there are post trial issues that are going on that Mr. Rusthoven touched on regarding the whether a new trial should be in front of a different judge. I don't want to go into the substance of that unless the court wants to hear about it because it's we have enough here this year. So looking at this case, how can how can you argue that a bankruptcy court's interpretation of the application of 11 USC 365 F3 is not a case arising under the bankruptcy code. I just cited a provision of the bankruptcy code which sure seems to suggest that the case arises under the bankruptcy code. Before I address that, just sure could you want to start my 15 minutes because I don't want to get into the substance. I've forgotten you. We've got to go on for an hour. I don't want to take advantage of the courts. That may have been one of the more professional acts we've seen here in a while. The kudos to council for that. Thank you. I'm not sure of the courts. Thank you. Yeah, so you know in our view that's the exact question. This case is about whether parties at a pre-packaged bankruptcy case that agreed to settle their disputes and present them to the bankruptcy court can have that settlement agreement as approved by the court be binding or whether the bankruptcy court has jurisdiction to come back and revisit it later. The pre-packed, it shouldn't make any difference whether this was a pre-packed shouldn't. I mean, you mentioned this but I'm trying to figure out why that's significant. Yeah, I think it's in the district court opinion, Judge Andrews has a footnote where he talks about a court that interprets a confirmation order after there's been a long hearing in a trial. Here we have 30 days in the bankruptcy case. The confirmation hearing itself was 18 minutes. So and I think some of the standard of review issues that we raise also touch on the fact that when you have a lower court that interprets an order that's ambiguous looking at what was litigated in front of it and what it intended when it entered that order, that might be a different review by this court than essentially a stipulated order which is what Judge Andrews found this confirmation order was more akin to. The parties agreed on a variety of documents showed up in bankruptcy court said we've all agreed and we'd like for you to approve this and the judge approved it. Now I don't mean to minimize what the bankruptcy court does. Certainly there's not no suggestion that the bankruptcy court didn't review the material and do its job and approve the confirmation order. One more importantly if the parties had slukered the bankruptcy judge somehow the bankruptcy judge could have rectified that when the case was brought back before that judge. That's a fair comment. I don't disagree with that but I think if you look at this record there is no reference of 365 F3 anywhere in these proceedings. My colleague mentioned that 365K which is a provision of the bankruptcy code that says when a debtor assigns a contract it's no longer bound by the provisions of the contract. If you look at paragraph 25 of the confirmation order 365K is not mentioned. What is mentioned is that the settlement agreement is assumed and that the assigning debt or will remain liable on the assigned lease. So the parties didn't mention 365K and yet the settlement agreement and the order as our opponents have conceded were contracted around. We believe and submit to this court that under the same language under different language in the settlement agreement we simply contracted around section 365 F3. There's nothing to suggest that the parties here can't do that and there's nothing to suggest that that's not what they did. And in fact Judge Hardman you asked a question that if this tenant was now to assign the lease in violation of section 13.1 without extinguish the purchase option and the answer was yes. So I think it's clear from this record that the and all of the terms of the lease were assigned. And so what does that mean? That means when the tenant elected to exercise the purchase option it was well within the landlords right to submit that there had not been a section 13.2 assignment. And in the bankruptcy record there are no facts that suggest that 13.2 was complied with. If you look at this lease it's a little bit complicated because there's Article 33.3 which says and I think both the bankruptcy court and the district court did a fair job of going through these provisions. The 33.3 says so long as there's not an assignment provided there's been an assignment under 13.2 and the parties are not in default then you can exercise the purchase option. What the bankruptcy court did is say when I approved this lease 13.1 is written out of the contract. So we have a confirmation order that approves a settlement agreement. A settlement agreement that says all-term survive. That's where we leave it at confirmation. But don't don't agreements in all these confirmation orders come with the proviso or the understanding that they're subject to the operation of federal bankruptcy law unless stated otherwise. I mean the default position I posit for your response that the default position can't be that we put all these things in the document to the exclusion of federal bankruptcy law. Wouldn't the position be that they're all put in their subject to the bankruptcy law unless explicitly stated otherwise and approved by the federal bankruptcy judge? I think that's a very good question and in my practice at least we oftentimes state what you just said in a contract. For example if we have a bidder that wants to buy assets and we're representing a debtor we'll actually ride into the contract with that bidder. This contract has to be approved by the bankruptcy court or we retain our fiduciary obligations and if the higher bid comes along we're not going to be bound to not sell it to that party. But I submit that if your question if the answer to your question is yes then at least with respect to prepackaged bankruptcy cases the policy implications are great. Namely where you have a straight. All right let me just stop you for a minute because I don't want to get to the policy argument until we deal with the legal argument. Or maybe you're saying you only have a policy argument are you suggesting to us that for non-prepackaged bankruptcies they win but this case is different because it's a prepackaged bankruptcy and you want us to plow some new ground in that regard. I don't think I'm asking you to plow some new ground. I think I was going to make a distinction between a prepackaged case and a non-prepackaged case but to be responsive to your question I'll set that aside. I want you to do that I just want you to get. I want to answer your direct question which is isn't it always the case that an agreement if you don't expressly write that you're contradicting the bankruptcy code that the bankruptcy code always trumps the agreement. I would submit that that is not the case because the bankruptcy code while it has many provisions that govern and are self-executing also requires court approval of various agreements. It's not unusual in bankruptcy practice which is what happened here. To have two parties settle a dispute or litigation or an event that occurs outside of the bankruptcy process but because one party to that agreement is in bankruptcy that they come to the bankruptcy court and they get it approved. I don't think that it's understood in the bankruptcy community or that it is the substantive law that if you don't write in that contract we are expressly writing out of this agreement section x, y and z of the bankruptcy code that you can't achieve that through the language that you actually write. In fact the 365K example is the perfect example. 365K I've looked at the record three times and I can't even find it mentioned in the plan the confirmation order the settlement agreement. The language of the settlement agreement said all provisions will survive of the lease. That is directly contrary to 365K. The confirmation order says the lease is assumed and the lease remains binding. That's directly in contradiction to 365K but neither the settling parties nor the bank. I'll counsel I know that your adjunct questions presented to you but I'm waiting for you to get into the issues you raised in your brief. On the question of jurisdiction and the question of whether there was the nexus in exercising jurisdiction. Yes I'll be happy to address those judge all discernment. Thank you. I would like to hear your position on that. Both on jurisdiction and also on the close to the nexus. Yes we argued jurisdiction from two different perspectives. One is the statutory perspective. One is the constitutional perspective. As Judge Aldecerg mentioned, Judge Serica has written the NRA Resorts International which is one of the leading cases on post confirmation jurisdiction and it says that after confirmation of a bankruptcy plan jurisdiction narrows with respect to bankruptcy case. But as I read that case the judge simply said that you still have to find that close nexus and that close nexus is not unlike the well-known and well-respected third-circuit decision in Pac-Worver's Higgins which says there must be some type of effect on the administration of the bankruptcy case. It is our view here that since this case has been confirmed and all of the shares and the new reorganized entity have been distributed that the resolution of this dispute did not affect a creditor. It did not affect the administration of the estate. It had no bearing on any of the core type of administrative issues that typically arise in a bankruptcy case. In fact, Judge Harteman asked me at the beginning I didn't get a chance to answer if this was a court proceeding and I think my opponent suggested that it is a court proceeding and that leads me into Stern versus Marshall where Chief Justice Roberts wrote a wonderful opinion on statutory bankruptcy jurisdiction and he talked about he found in that situation that under the statute as written the counter claim that was filed was a core proceeding under the statute. He then turned to the next section of his decision and said but Congress didn't have the congressional didn't have the authority under the Constitution to delegate the decision of that dispute to the bankruptcy court. So I would submit that the jurisdictional issues here as properly analyzed and as simply analyzed are that under the facts of the record before us there simply is not a close nexus such that the resort's international case has been satisfied. And I want to be clear that I'm not asking for some kind of per se rule or asking for something unique that there could never be jurisdiction in a post-conference situation. I'm simply asking to do what it's done in both resorts international Armstrong world industries and the Shinango cases and say that the jurisdiction analysis is multifaceted it's one of degree it requires an understanding of the facts and circumstances and then under these facts and circumstances there was not statutory jurisdiction and under Stern v Marshall there was not constitutional jurisdiction that leads me to answer two questions that I'm sorry did you go ahead finish I was just simply going to turn to the travelers v Bailey decision because I think Judge Sharricka you asked if that answers the question and the other argument and I say that that does not answer the question because travelers v Bailey deals with whether the discharge and injunctive provisions of a confirmed order whether the bankruptcy court could revisit those issues and as we analyzed in our briefing the 30 year history of the 1978 bankruptcy code every time it's made it up to the United States Supreme Court the United States Supreme Court has reminded all of us that practice bankruptcy law that bankruptcy jurisdiction is not unending and that it has limits and that it has the bankruptcy court can only deal with public rights discharge injunctions and related type issues that are core to the heart of bankruptcy in this country now when you have a chapter 11 case or chapter 7 case you then do have the authority under 1334 to deal with cases that arise in or arise under the bankruptcy code but I submit that since this bankruptcy case had been closed for 15 months but it does not it did not arise in a bankruptcy case and that it did not arise under the bankruptcy code can it be argued that travelers is not really an interpretation of a discharge I mean the question there was whether the order precluded claims against the debtors insurer so it was not the typical kind of discharge case uh yes and I I think that's a fair question the is I understand the record of that case there was a lot of argument and a lot of evidence taken at the at the bankruptcy court level about whether travelers really would have funded the bankruptcy plan with I think it was several hundred million dollars if it had not received the discharge and the bankruptcy court found that it wouldn't have and that therefore the discharge injunction was I think it was called the cornerstone of the bankruptcy plan why can't it be said here that the bankruptcy court just adjudicated one issue relating to the dispute before it they were they were uh the court was acting under federal bankruptcy law not under state law in the circumstance right and I I think my answer to that would be if that's what the bankruptcy court was doing and if it was using powers the stowed upon it by travelers be Bailey that it needed to develop a better record to determine whether this dispute was really the key to the plan the bankruptcy court's decision actually said that this was you know a key aspect of the bankruptcy plan but there were no there there was no testimony in front of the bankruptcy judge the second time we got back in front of him to to judge Hardamon's whipsaw point you know we just got the decision with a statement that this was a key issue the record reflects that the key issue was a hundred and thirty eight million dollars worth of bond debt that couldn't be paid on time and what's not in the record is whether the parties would have still assigned the lease had the purchase option been expressed the terminated or what would have happened and what would have been the economic impact on this debtor if the parties that had the litigated 365 F3 issue in front of the bankruptcy court timing was important here yeah assuming there was I know it's time to make a judge out and I would just want to know if you will help me out why wasn't there a sufficiently closed nexus in this particular case I guess the the most direct way I can answer that is to remind your honor that the movement in the bankruptcy court is a separate and new legal entity the reorganized debtors are not the debtors the debtors and the landlord entered into a settlement agreement which the bankruptcy court approved 15 months later a new party that succeeded to the lease decided that for whatever reason they wanted to exercise a purchase option and when we informed them that the way in which the settlement agreement in bankruptcy had occurred the purchase option was terminated having dislike with that they rushed back to the bankruptcy court and asked the judge to clarify for two non debtors a dispute that resulted in no monies being distributed to creditors and had no impact upon the administration of the bankruptcy case and for that reason we submit there was no jurisdiction my red light is on so I just I hate to keep going unless I I just want to make sure I understand your position fully you're saying that the the purchase option was extinguished in in conjunction with the planned confirmation document the settlement agreement is that right I think what I would more clearly say is that the full lease was assigned with all its terms and that when this party seeks to exercise the purchase option the way to decide that is to look at 33.3 13.1 and 13.2 and that full assignment was blessed by order of the bankruptcy court the we we we know in the factual background of our briefing and I won't go through due to the time but there was actually a complicated structure of assignments and different corporate entities that were created and one of the conditions to closing was a tax opinion saying this was all going to work in a way that was beneficial to the new owners all of those documents are in what's called the plan supplement in the record but the final documents were never before the bankruptcy court so we don't know exactly how all of the transfers occurred but in general the answer to your question is yes the bankruptcy court approved the plan that set up this structure but there were multiple assignments and assumptions and the settlement agreement only deals with part of that and then 15 months later or some period later question was raised as to whether or not section 365 F3 of the bankruptcy code altered that understanding in any way I think that's fair and the way I would then answer that is to say and then the bankruptcy court decided that when he approved that transaction initially he didn't really mean what he said and that although all provisions survived really section 13.1 of the lease didn't survive and the bankruptcy just may have been dead wrong on that let's assume for a minute the judge was wrong it's his job to make that decision right I mean it's axiomatic that the judges have the jurisdiction power to interpret their own orders is it not I mean maybe this is maybe it's a bad analogy but I'm thinking back to the time I was a trial judge and from time to time after I thought a case was closed and it had been put away in the electronic cabinet oh no they're back well let me let you know that's you know your job is to is to let me give you one analogy that might make it a little bit easier to understand my position this plan and disclosure statement also disclosed an exit financing facility between the reorganized debtors and Bank of America is it if what you're asking me is that the court always has the power to interpret the confirmation order is the true answer to the question posed today that if next week this borrower has a dispute with the Bank of America under that exit facility the proper form to adjudicate that dispute is to come back to the bankruptcy court and say we're having a fight with our lender if and tell us what you really meant if and only if they're dis I assume if and only if it's kind of nice you get to ask me the question I'll indulge you I think the answer is if and only if that dispute arises under a provision of the bankruptcy code if that dispute involves the statute of limitations in New York if it involves New Jersey consumer law it's only et cetera then you don't have a federal jurisdictional hook but if that dispute if one party can credibly walk into court and say we have a dispute here and I think 11 USC fill in the blank has something to say about this dispute it seems that that means you're in in the court you're in the ballgame so to speak within the in the jurisdiction of the bankruptcy court doesn't mean the bankruptcy court acts correctly doesn't get it dead wrong et cetera but as a jurisdictional matter how are you not properly there I would consider a point for an order but remember here we have a settlement agreement that this this resolution this case starts with the need for this debtor to settle other litigation under the lease and entering into a settlement agreement that said certain things are going to unfold in the bankruptcy case it's not that we just have an order here this is not an adversary proceeding where there was an entry of judgment and interest was to compound annually but the judge forgot to put compound and they came back and say did you really mean to say compound annually this is a complicated series of agreements that led to at least an interest in property that the parties are now have a dispute over which is a classic state law type dispute what does Elise mean there's plenty of cases that say a plan once confirmed is merely a contract between a debtor and its creditors and that state courts are fully competent to interpret those contracts so again I kind of returning to resorts and internationals and the questions that judge all of a sudden it was asking me there is a question of degree I'm not suggesting that the answer to your question is there's never jurisdiction to interpret a post confirmation order I'm suggesting that are these facts with the settlement agreement that's really what's being interpreted that it was inappropriate here good any further questions judge all of a sir and I have none thank you good thank you very much mr. Martin mr. Rusthoven until that very last statement council did not even attempt to identify a single state law issue that supposedly was presented to the bankruptcy court and in that response he sought to say that really what was the issue in the bankruptcy court was interpretation of a contract under state law no what was the issue in the bankruptcy court was as a matter of federal bankruptcy law self-executing provision did the assignments that occurred as part of the bankruptcy mean that the purchase option was then gone I mean council is kind of respectfully begging the question here yes the least was assumed in all its parts one of those parts was the purchase option the purchase option is still there and still subject to conditions it exists the only issue is when we're in this bankruptcy and the assignments occur as part of this reorganization plan does the purchase does the landlord consent provision operate to defeat the purchase option in that bankruptcy transaction that's the federal issue no one is there was no provision it just seems it you have to concede councilor don't you that this should have been dealt with before confirmation I mean this I don't think anybody thought it was an issue before confirmation or during confirmation I don't think anybody had a doubt that the effect of I'm sorry you're on I don't mean to rock you well I just if it were a non-issue it should have been said the other way then right I think what we really have here no I don't think parties have to recite and I think it would be an extraordinary rule of federal jurisprudence that would soon be regretted to have to recite in a confirmation order unless otherwise stated herein all the provisions self-executing provisions of the bankruptcy code apply I don't think parties have to recite by the way section 365 three applies here nothing nothing in this bankruptcy plan or in the confirmation order in the settlement says upon the assignments that occur pursuant to this reorganization plan the purchase option is extinguished there's nothing like that you just have assignments taking place as part of and you have people emerging the reorganized debtors and other federal bankruptcy law they emerge with the same rights your argument your argument is that if it were contracted around it would have been specifically identified oh my gosh yes oh my and I would also like to point out one one thing the suggestion that there's nothing here that suggests 13.2 was conglugged I'm sorry the bankruptcy court found in interpreting its own order and in looking at the proceedings with which it appeared to be quite familiar if you read the order the landlord consented to the assignment as part of the reorganization plan so it's not like they didn't know or didn't consent this is when did this be authorized to speech arise when there's lots of money on the line this dispute arose after the fact because all of a sudden exercising the purchase option would be beneficial to lazy days and not to not to i4 it's then that i4 comes up with this argument after the fact oh no no because it was assigned during the bankruptcy therefore the purchase option was extinguished no one thought of that before no one would have thought that that the self-executing provision of the bankruptcy code is a matter of federal policy so that debtors have the ability to transfer exactly what they possess that's the purpose of this provision no one would have thought of that didn't apply in the bankruptcy court had no problem dealing with it i also want to make a couple of points first of all judge Alistair I have not forgotten your problem but I have had had a chance to look up the other decision that was referenced by judge sterica in in resort and it is the birth drum or dalcon shield claimant's case in which the court found there was a sufficiently close nexus for the bankruptcy court to go back and look at provisions about what percentage of attorney's fees you might get as part of a claim that was found to be sufficiently close to nexus here we have here we have something that involves the meaning of the confirmation order itself the meaning of the plan itself the last thing and I appreciate the courts uh I just said two quick points one all this stuff about I don't think the court wants to get into any rule law where all of a sudden bankruptcy courts uh what they do and their discretion authority depends on whether it was a prepack or not my god what that will open up but the main point even here that would at most go to the weight that you assigned to the interpretation of the order it would not go to the jurisdiction to reopen the case to consider and enforce his own order and plan which is spring court said in travelers is right there uh lastly on the floor to decision we were not citing that and I am not citing that as a authority that is binding on this court uh our view of it was there was a related case proceeding going on there been a significant development in that case we thought the court should be aware of it good we think we understand your position they will we thank counsel for excellent argument here and excellent briefing as well um we'll decide whether we want to hear what whether we want to see any further briefing on the authority case and if we do we'll notify you immediately and give you some time to uh to do that again with our thanks yes we have counsel prepare a transcript of this very fine or our arguments absolutely absolutely um I want a third that I I think this is one of the most helpful and well done or our arguments I can remember so thank you to counsel good yeah I would ask you to share the costs on this and to uh and check with the clerk's office before you leave and we'll tell you how to do that good take the matter under advisement judge jaldasert we will we'll give you a call thank yo