[00:00:01] Speaker 00:
Ray my Omni gaming LTD AJ come counsel for appellant John a Fortin counsel for appellee Okay, we'll take good morning.

[00:00:26] Speaker 04:
We'll take a palette first and

[00:00:31] Speaker 04:
Do you want to reserve some time for rebuttal?

[00:00:33] Speaker 00:
I do, Your Honor.

[00:00:34] Speaker 00:
I'd like to reserve five minutes, please.

[00:00:36] Speaker 04:
Five minutes, OK.

[00:00:37] Speaker 04:
Go ahead, please.

[00:00:41] Speaker 00:
In light of the fact that I have already set forth all of the arguments in the briefs, and in light of the admonition from the court to not merely recite our briefs, I just want to do a simple recap of what I think are the most salient points to the appeal.

[00:00:54] Speaker 00:
First and foremost, I want to stress to the panel

[00:00:57] Speaker 00:
that sports does have standing to bring this appeal, both as a creditor.

[00:01:01] Speaker 00:
Admittedly, no proof of claim and no amended schedule had been filed at the time my appellate brief was filed.

[00:01:08] Speaker 00:
However, the time for filing proof of claims had not yet lapsed at that time.

[00:01:13] Speaker 00:
That has been resolved, and I submit to the panel that there is no dispute as to whether or not sports is a creditor based upon the filings with the court thus far.

[00:01:24] Speaker 00:
You may hear arguments from SBC appellee that they believe that the proof of claim is inappropriate or should be disregarded somehow.

[00:01:32] Speaker 00:
But there's been no filing to that.

[00:01:34] Speaker 00:
And as it stands before the panel today, sports is a creditor with the proof of claim on file with the corresponding amended schedule, a debtor acknowledging sports as a creditor.

[00:01:45] Speaker 00:
and bank statements from the debtor showing the money that was loaned into debtor's accounts.

[00:01:50] Speaker 04:
I'm sorry, you said the debtor amended schedules to list that claim?

[00:01:53] Speaker 04:
Okay, thank you.

[00:01:54] Speaker 00:
They did, Your Honor.

[00:01:57] Speaker 00:
Okay.

[00:01:57] Speaker 00:
In short, sports seeks to vacate the order authorizing the sale of certain assets from Debtor Gaming's estate to SBC on four primary basis.

[00:02:08] Speaker 00:
One, we submit that the matter was hoarded on order shortening time inappropriately,

[00:02:13] Speaker 00:
Two, we submit that the motion itself was never served.

[00:02:17] Speaker 00:
Three, we believe that the trustee failed to meet his burden to show that the sales price that he ultimately agreed upon and sought approval for was the best and most optimal price to the estate.

[00:02:29] Speaker 00:
And fourth, we believe that the funding of good faith was a rubber stamp by the judge and that there was no evidence in the record that the motion was brought in good faith.

[00:02:39] Speaker 00:
With respect to the motion being heard on OST,

[00:02:43] Speaker 00:
I understand that bankruptcy rule 9006 allows the standard 28 day time to be shortened, but not without cause.

[00:02:52] Speaker 00:
And I believe that actually the rule it says for cause shown.

[00:02:56] Speaker 00:
So the inquiry then is what cause was shown to have this motion for the sale assets heard in such a rushed and hurried way.

[00:03:04] Speaker 00:
Well, the trustees declaration in support of his OST provided three reasons.

[00:03:09] Speaker 00:
One, and I'll just read directly from the trustee's declaration.

[00:03:13] Speaker 04:
This is an abusive discretion review point, don't you agree?

[00:03:18] Speaker 00:
Abusive discretion with respect to the approval, NOVO with respect to the finding of good faith, Your Honor.

[00:03:24] Speaker 04:
Right, I was just focusing on the shortening time.

[00:03:26] Speaker 04:
That's abusive discretion, correct?

[00:03:27] Speaker 00:
It is, Your Honor.

[00:03:28] Speaker 04:
Thank you.

[00:03:32] Speaker 00:
Excuse me.

[00:03:33] Speaker 00:
Again, I believe that the order shortening time

[00:03:37] Speaker 00:
requires cause.

[00:03:39] Speaker 00:
The cause should be something to the benefit of the estate.

[00:03:42] Speaker 00:
The cause should not be solely to assist SBC, the potential purchaser of the claims.

[00:03:48] Speaker 00:
The three basis justifying or warranting an order shortening crime profit by the trustee are as follows.

[00:03:55] Speaker 00:
Excuse me.

[00:03:57] Speaker 00:
The trustee states in paragraph five.

[00:04:00] Speaker 00:
First, this court denied

[00:04:01] Speaker 00:
SBC's request for temporary injunction and stay relief because the court concluded that SBC lacked standing.

[00:04:08] Speaker 00:
If this court permits Trustee Fox to sell the claims to SBC, this standing problem is cured.

[00:04:14] Speaker 00:
Therefore, good cause exists to recover or to resolve whether SBC may purchase the claims from the Trustee on short in time.

[00:04:22] Speaker 00:
The only benefit proffered in that is to assist SBC with their standing issues and has no benefit

[00:04:29] Speaker 00:
or play in obtaining the best, most optimal price for the estate.

[00:04:33] Speaker 02:
Well, the benefit to the estate is ultimately recovery by SBC on the claims against sports, right?

[00:04:42] Speaker 00:
Potentially.

[00:04:43] Speaker 00:
But as I set forth in my brief, I think that's an illusory purchase.

[00:04:47] Speaker 00:
The purchase was based upon zero guaranteed payment.

[00:04:51] Speaker 02:
Let's also kind of refocus our argument here today because

[00:04:56] Speaker 02:
I need to understand what it is we can actually review given the fact that there was a 363M good faith finding and no stay of the sale.

[00:05:07] Speaker 02:
So I'm not sure what effective relief we can give you.

[00:05:12] Speaker 02:
We can review the good faith and that's about it.

[00:05:15] Speaker 00:
Your Honor, I believe if there is a reversal of the finding of good faith, there is a potential for reversing the sale.

[00:05:21] Speaker 02:
But we can only look at the good faith.

[00:05:23] Speaker 02:
We can't look at whether or not it was the best sale price or not.

[00:05:27] Speaker 02:
We can't look at that.

[00:05:28] Speaker 00:
Well, I think that all plays into whether or not it was brought in good faith.

[00:05:32] Speaker 00:
The arguments alleged by sports in support of its argument of lack of good faith is the trustees collusion with SBC.

[00:05:40] Speaker 00:
part of which was the trustees complete lack of analyzing the value of the potential claims.

[00:05:46] Speaker 00:
The trustee essentially was saying, well, SBC has a judgment for $6 million.

[00:05:50] Speaker 00:
So they have a lot of say, but the value of the claims is not based on SBC's judgment.

[00:05:57] Speaker 00:
It's based upon the value of the potential claims.

[00:06:00] Speaker 00:
If the potential claim was for fraudulent transfer, the value of those claims would be the net value of the fraudulent transfer.

[00:06:07] Speaker 00:
If a million dollars of contracts were in fact transferred,

[00:06:10] Speaker 00:
And there was costs associated with maintaining the contracts.

[00:06:14] Speaker 00:
And the net value of the benefit to the successor transferee was $20,000.

[00:06:20] Speaker 00:
That is the value of the claim.

[00:06:22] Speaker 00:
The judgment amount of $6 million is a red herring and is irrelevant to that analysis.

[00:06:28] Speaker 00:
The trustee did not do that analysis.

[00:06:30] Speaker 00:
Yes.

[00:06:30] Speaker 02:
No, you're correct.

[00:06:31] Speaker 02:
It's not based on their judgment.

[00:06:33] Speaker 02:
That's a different claim.

[00:06:34] Speaker 02:
The fraudulent transfer is what's at issue here.

[00:06:37] Speaker 02:
But what you're saying, it seems like,

[00:06:39] Speaker 02:
The bankruptcy judge had to conduct him any trial and really figure out what was the value of these claims in order to approve a settlement or a sale.

[00:06:47] Speaker 02:
And that's not required by the bankruptcy code or case law.

[00:06:51] Speaker 00:
Agreed, Your Honor.

[00:06:52] Speaker 00:
And that is not what I'm saying.

[00:06:54] Speaker 00:
I'm saying the trustee had an obligation to do more than to just say, in my business judgment, this is the best offer.

[00:07:01] Speaker 00:
At least, in fact, to say.

[00:07:03] Speaker 04:
It's easy to say more, but the question is, how much more?

[00:07:06] Speaker 04:
Because there's always more a trustee could do.

[00:07:10] Speaker 00:
Respectfully, Your Honor, here, the trustee did nothing.

[00:07:13] Speaker 00:
So I'm not asking for a lot more.

[00:07:14] Speaker 02:
OK, but then what was the trustee supposed to do?

[00:07:18] Speaker 02:
Because there was an email that said, hey, we're going to make an offer of $50,000 in three payments.

[00:07:25] Speaker 02:
And then silence.

[00:07:26] Speaker 02:
Nobody showed up at the hearing.

[00:07:28] Speaker 02:
Nobody showed up.

[00:07:29] Speaker 02:
I mean, silence from your client.

[00:07:30] Speaker 02:
Nobody showed up at the hearing.

[00:07:32] Speaker 02:
Nobody showed up at the hearing and said, hey, we have a legitimate offer that we're going to make and give us more time.

[00:07:40] Speaker 02:
You know, there was a lawyer, there was not even a representative, the debtor didn't even come.

[00:07:45] Speaker 00:
Let me highlight for you a couple of issues with respect to that.

[00:07:48] Speaker 00:
The motion was filed on January 26, 2003 on order shortening time.

[00:07:53] Speaker 00:
The order shortening time was granted on January 27th, which was a Friday.

[00:07:57] Speaker 00:
It was granted at 4.57 p.m.

[00:07:58] Speaker 00:
on a Friday.

[00:08:00] Speaker 02:
And then 12 or 13 days later, there was a hearing or 8 or 10 days later, there was a hearing.

[00:08:04] Speaker 00:
The opposition was required to be filed.

[00:08:07] Speaker 00:
on February 3rd, which was five business days later.

[00:08:10] Speaker 02:
And nobody then showed up at the hearing.

[00:08:11] Speaker 00:
Motion was never served.

[00:08:13] Speaker 00:
It was mailed via UK mail.

[00:08:15] Speaker 00:
And the issue was not just with my client, Your Honor.

[00:08:17] Speaker 02:
It was mailed but not, sir, but.

[00:08:19] Speaker 00:
Motion was never mailed.

[00:08:21] Speaker 00:
It was never mailed, okay.

[00:08:22] Speaker 00:
The order shortening time, the two page order shortening time was mailed via regular mail.

[00:08:27] Speaker 00:
But the issue, Your Honor, is not just with my client.

[00:08:30] Speaker 00:
My client admittedly had knowledge of this hearing, but on nine business days with an eight hour time difference,

[00:08:37] Speaker 00:
was unable to retain counsel as an officer of the court.

[00:08:40] Speaker 00:
I will submit to you.

[00:08:41] Speaker 00:
They contacted my office February 3rd.

[00:08:45] Speaker 00:
I did not have time to even speak with them until the following week.

[00:08:48] Speaker 00:
I believe on the 11th and I was retained on the 12th.

[00:08:52] Speaker 00:
So your honor may not empathize with the plight of my client, but I can tell you working with my client with an eight hour time difference has been challenging.

[00:09:02] Speaker 00:
So for them to have to retain new counsel for a new a different entity,

[00:09:07] Speaker 00:
on very expedited time, I don't think was for the benefit of the estate.

[00:09:14] Speaker 00:
If the trustee's job was to get the best and most optimal price, then we should really take a step back and ask, why are you rushing this process?

[00:09:23] Speaker 00:
Why are you preventing other parties who might be interested in having noticed or giving them adequate time to respond?

[00:09:31] Speaker 00:
Why are we rushing the sale for a non-guaranteed minimum purchase?

[00:09:37] Speaker 00:
Now, if it was a large amount, if it was a million dollars, my position would be different, Your Honor, but what they sold, what the trustees sold the claims for, is an illusory promise.

[00:09:47] Speaker 00:
They get zero dollars unless SBC recovers enough first to reimburse for all of its attorney's fees.

[00:09:54] Speaker 00:
The trustee presented no evidence of even an estimate of what SBC believed their legal fees could be.

[00:10:00] Speaker 00:
If their legal fees were predicted to exceed the value of the net value of these alleged transfers,

[00:10:07] Speaker 00:
There would never be any recovery.

[00:10:09] Speaker 00:
So I'm not saying the trustee had to do a ton of due diligent inquiry, but they should have asked some basic questions.

[00:10:16] Speaker 00:
What SBC do you think the value of a future judgment will be?

[00:10:20] Speaker 00:
Do you think you're going to get a judgment against these other entities for a million dollars, for six million, for 250,000?

[00:10:26] Speaker 00:
I think that is a relevant fact that they should have at least inquired into and should at least present it to the judge.

[00:10:33] Speaker 00:
But as we sit here today, there's nothing in the record that tells you what the trustee or SBC even valued these claims to be.

[00:10:43] Speaker 04:
Okay, you're at your five minutes to go, Mark.

[00:10:45] Speaker 04:
So if you want to reserve time, you can stop now.

[00:10:47] Speaker 00:
I do, Your Honor.

[00:10:48] Speaker 04:
Okay, thank you.

[00:10:49] Speaker 00:
Thank you.

[00:11:05] Speaker 03:
Please go ahead.

[00:11:06] Speaker 03:
Good morning, your honors.

[00:11:07] Speaker 03:
John Ford and McDonald Corona, representing appellee SBC, Nevada LLC.

[00:11:12] Speaker 03:
And may it please the court.

[00:11:14] Speaker 03:
We asked this court to dismiss this appeal for lack of jurisdiction because sports lack standing sports is not a creditor.

[00:11:22] Speaker 03:
And as the Ninth Circuit and federal courts across the country recognize

[00:11:27] Speaker 03:
disappointed bidders do not have standards.

[00:11:30] Speaker 04:
You say it's not a creditor.

[00:11:30] Speaker 04:
Has a filed proof of claim, your client's not objected, nobody else is subjected to that claim?

[00:11:35] Speaker 03:
Your Honor, if we go and look at the timeline of events, which I think is very important for the court to consider, on October 23rd, we filed our answering brief challenging this court's jurisdiction, saying that sports was not a creditor.

[00:11:52] Speaker 03:
Then on October 25th, debtor via Andrew Watt, who is the principal of the debtor, amended the schedules and statements and stated that sports owes a debt.

[00:12:07] Speaker 03:
At the same time, Andrew Watt, in charge of sports, files a proof of claim in claim number four.

[00:12:15] Speaker 03:
Right before the bar date, correct?

[00:12:16] Speaker 03:
That's an allowed claim, right?

[00:12:19] Speaker 03:
Certainly, Your Honor, but I would point the court to 845 of the appendix in which Watt testified at the 341 creditors meeting in which Trustee Fox is engaging with Watt in determining what the estate looks like and is incredulous that sports is paying for debtor.

[00:12:38] Speaker 03:
And I point the court to Trustee Fox's question.

[00:12:42] Speaker 03:
Does Miami sports have any kind of contract or contractual relationship or any kind of agreement with Miami gaming?

[00:12:51] Speaker 03:
What stated it does not know at page 340 of the appendix during the March 29th, 2020 hearing, Judge Nakagawa asked opposing counsel point blank.

[00:13:04] Speaker 03:
Let me just ask you this.

[00:13:06] Speaker 03:
Are any of your clients however named?

[00:13:09] Speaker 03:
Are they creditors in this case?

[00:13:11] Speaker 03:
No, they are not.

[00:13:13] Speaker 04:
At page 297... All that sounds like it might make for a great claim objection, but none's been filed, correct?

[00:13:20] Speaker 03:
Certainly, Your Honor, and we would point the Court to Federal Rule of Appellate Procedure 10E and Barnard v. Lowery, which states that an appellant cannot supplement the record

[00:13:33] Speaker 03:
without moving in the court.

[00:13:36] Speaker 03:
ECF number 15 should be completely stricken from the record because appellant is not free to simply add additional documents and they certainly can't do it in.

[00:13:48] Speaker 04:
Well, can't we take judicial notice of the simple filing of approval of claim?

[00:13:52] Speaker 03:
Certainly you can, and if you are going to take judicial notice of the adversary record, I would ask the court to look at the numerous motions that have been filed by SBC in which sports and debtor have obstructed the discovery process.

[00:14:09] Speaker 03:
Judge Brand, you made an excellent point, which is there has been no stay requested in this court, yet

[00:14:17] Speaker 03:
There are significant and salacious allegations slung at Nakagawa as well as the trustee over collusion and improper conduct.

[00:14:27] Speaker 03:
But yet this court can look at the record.

[00:14:30] Speaker 03:
And where is such collusion?

[00:14:33] Speaker 03:
Where is such problems of bad faith?

[00:14:36] Speaker 03:
Instead, what you're seeing is the business judgment of a trustee

[00:14:41] Speaker 03:
who had already taken a 341 creditors exam, who had already done a 2008 exam, and just days prior had opposed SBC.

[00:14:51] Speaker 03:
He challenged our standing with our TRO request.

[00:14:56] Speaker 03:
We had just been adversaries.

[00:14:58] Speaker 03:
We got on the phone.

[00:14:59] Speaker 03:
We negotiated a deal.

[00:15:01] Speaker 03:
If the court looks at the in-ray Mickey Thompson,

[00:15:04] Speaker 03:
The nature of the deal has been approved for decades in the Ninth Circuit.

[00:15:10] Speaker 03:
So the nature of the purchase and sale agreement has been approved by courts and we complied with that.

[00:15:16] Speaker 03:
And as you look at the business judgment that the trustee said, 90% of the state is SBC.

[00:15:24] Speaker 03:
We have given due consideration that we get to go collect or that 90% of the state is gone and that's good value.

[00:15:34] Speaker 04:
What about the lack of service?

[00:15:36] Speaker 04:
That's kind of troubling, especially for a good faith finding.

[00:15:39] Speaker 03:
So the lack of service, I think, is a red herring, Your Honor, because of, again, what Judge Brand pointed out.

[00:15:45] Speaker 03:
If it looks at pages 259 to 63, Watt clearly is on notice.

[00:15:54] Speaker 03:
And the debtor did receive service.

[00:15:56] Speaker 03:
That's the question.

[00:15:58] Speaker 02:
Well, creditors are supposed to receive service, too, and also potentially other bidders.

[00:16:04] Speaker 02:
No one got noticed, and I think you also need to address, after you finish this, the rushed nature of the proceeding, too.

[00:16:13] Speaker 03:
Certainly, Your Honors.

[00:16:13] Speaker 03:
And this is, again, where I would, I'm stuck between a rock and a hard place with a record that began on July 11th and a record that has continued since.

[00:16:24] Speaker 03:
And so I do hope judicial notice is taken.

[00:16:28] Speaker 03:
And you can see in the record that

[00:16:32] Speaker 03:
As all of this is going on, sports is negotiating with some of the largest casinos in Nevada and changing their contracts and doing all kinds of things and moving their assets.

[00:16:44] Speaker 03:
I realize that's a dispute below, but my point is, is we understood, we had litigated with this entity, with Watt and with Venner and with the debtor.

[00:16:57] Speaker 03:
Now they've erected sports

[00:17:00] Speaker 03:
and we've moved to protect the estate and move to protect our interests.

[00:17:04] Speaker 03:
When it comes to the service issue, sports can't make arguments for other creditors.

[00:17:11] Speaker 03:
Sports also wasn't a creditor until October 23rd, 2023.

[00:17:18] Speaker 03:
When the 341 creditors meeting occurred, the sale hadn't taken place.

[00:17:23] Speaker 03:
The trustee was asking questions about who all were the creditors, so there was no reason to put sports specifically on notice.

[00:17:33] Speaker 03:
But again, that's a red herring because Watt was on notice.

[00:17:36] Speaker 03:
Watt made a bid on behalf of all the Miami entities.

[00:17:40] Speaker 03:
The trustee instructed Watt to oppose the motion and Judge Brand.

[00:17:46] Speaker 03:
I take your point and I think that Watt Venner or whoever.

[00:17:51] Speaker 03:
Should have come to the

[00:17:53] Speaker 03:
and said, I want to bid.

[00:17:57] Speaker 03:
This hearing was conducted telephonically.

[00:17:59] Speaker 03:
None of the hearings in this matter below have ever occurred in this courthouse.

[00:18:05] Speaker 03:
Mr. Watt and Mr. Venner have come to those hearings and appeared on Zoom.

[00:18:11] Speaker 03:
Yes, it occurred on a shortened basis.

[00:18:13] Speaker 03:
But again, the court is stuck with a clearly abusive discretion standard.

[00:18:19] Speaker 03:
And where I think has been lost and wasn't addressed

[00:18:23] Speaker 03:
Below, it wasn't addressed in the answering brief, and it wasn't addressed in the reply brief.

[00:18:28] Speaker 03:
And that's the A and C factors.

[00:18:31] Speaker 03:
So even if we go back down below and we enter into a bidding process, the paramount interest of the creditors will subsume and make it impossible for sports's offer to be better than SBC's.

[00:18:50] Speaker 03:
My friend in college, Mr Works, said that at the original sale order we put it in our opposition to the motion to reconsider.

[00:18:59] Speaker 03:
It was never addressed in the reply brief.

[00:19:01] Speaker 03:
It was never addressed at the hearing.

[00:19:03] Speaker 03:
It was never addressed in the briefing to this court.

[00:19:05] Speaker 03:
That argument is waived and therefore it can't be a clearly abusive discretion.

[00:19:12] Speaker 03:
For Judge Nakagawa to enter this sale order.

[00:19:16] Speaker 03:
And so

[00:19:17] Speaker 03:
I do want to return to jurisdiction for just a second, and it is because of the nature of what is going on in the district court.

[00:19:28] Speaker 03:
We do intend to object to the claim, and in fact, we have moved to amend our pleadings because under 11 USC 547, these transfers can be avoided.

[00:19:45] Speaker 03:
I don't believe that the claim number four actually will provide standing and the nature of all of what has happened, the direct questions that were made to what under penalty of perjury that were made to counsel.

[00:20:02] Speaker 03:
And then all of a sudden we've just determined that there's a loan and we don't have all of the banking information.

[00:20:10] Speaker 03:
We don't have all of the information.

[00:20:13] Speaker 03:
Um,

[00:20:15] Speaker 03:
And so if there are any further questions, I'm happy to answer them.

[00:20:18] Speaker 03:
But I don't want to take up the court's time, because I really think jurisdictional argument is a good off-ramp for the court.

[00:20:25] Speaker 01:
OK, so just to follow up on Judge Brand's question, which I believe, and I'm sorry if I missed the answer to it, was with the lack of the service of the motion on parties, does that impact the good faith finding?

[00:20:42] Speaker 03:
I don't think it does, Your Honor.

[00:20:45] Speaker 03:
And the reason why is because somebody should have stood up and done something.

[00:20:53] Speaker 03:
Somebody should have come to the hearing.

[00:20:55] Speaker 04:
Of course, people who don't have service or notice don't know there's a hearing.

[00:21:02] Speaker 03:
But only sports is here.

[00:21:05] Speaker 03:
There isn't any other entity out here.

[00:21:07] Speaker 03:
And sports was on notice.

[00:21:09] Speaker 03:
And we know that sports was on notice.

[00:21:11] Speaker 03:
put in their reply brief to their motion to reconsider the email traffic between the trustee and sports.

[00:21:19] Speaker 03:
And so that's the question.

[00:21:21] Speaker 03:
And that's the, you know, standing is really the question here is, is there's a lot of arguments here and there were a lot of arguments in the district court or in the bankruptcy court that that sports were making on behalf of a lot of other people.

[00:21:33] Speaker 03:
But the question is sports.

[00:21:35] Speaker 03:
If sports is taking the position that everybody's separate and

[00:21:39] Speaker 03:
different, they're a disappointed perspective bidder.

[00:21:44] Speaker 03:
Debtor needed notice and debtor got notice, and we know that because Mr. Zurzow sent an email to his clients and explicitly said, I only represent the debtor in the bankruptcy proceeding.

[00:21:55] Speaker 03:
You need to get other counsel.

[00:21:56] Speaker 03:
And then Mr. Watt showed that he knows how to object and did that.

[00:22:01] Speaker 03:
And so, again, I don't think the service issue affects the good faith finding.

[00:22:08] Speaker 03:
Are there any further questions or I can rest on our briefing?

[00:22:13] Speaker 03:
Nope, nothing further.

[00:22:13] Speaker 01:
Thank you.

[00:22:14] Speaker 01:
Thank you very much.

[00:22:14] Speaker 01:
Thank you.

[00:22:15] Speaker 04:
Thank you, Your Honors.

[00:22:17] Speaker 04:
Okay, Ms.

[00:22:18] Speaker 04:
Kung, I believe you've got five minutes left.

[00:22:20] Speaker 00:
Thank you, Your Honors.

[00:22:22] Speaker 00:
There is nobody else here today because nobody else has had notice of these proceedings.

[00:22:28] Speaker 00:
To say the fact that nobody else came here to object is quite honestly just a little spurious of a statement.

[00:22:36] Speaker 00:
The trustee did receive another offer from a third party for $75,000.

[00:22:42] Speaker 00:
Post this, that was not related to my client.

[00:22:46] Speaker 00:
My client is here because my client has notice of these proceedings.

[00:22:52] Speaker 00:
I just want to address a few statements which I think are problematic.

[00:22:59] Speaker 00:
Now, SBC has alleged that sports was not a creditor previously.

[00:23:05] Speaker 00:
Sports has always been a creditor.

[00:23:08] Speaker 00:
Just because a proof of claim had not been filed, evidencing the claim, does not change the fact that sports was a creditor.

[00:23:18] Speaker 04:
Mr. Watt's testimony, I believe that 341 was cited, right?

[00:23:22] Speaker 04:
There was at least a time that it didn't sound like sports was a creditor.

[00:23:25] Speaker 00:
The question was not ever, was there any debt owed?

[00:23:28] Speaker 00:
The question was, are there any contractual agreements?

[00:23:31] Speaker 00:
And we can bring Mr. Watt in here and we can question him and ask him, do you consider a debt to be a contractual agreement?

[00:23:38] Speaker 00:
And we must have the backdrop that they operate under UK law.

[00:23:42] Speaker 00:
I've had to learn new rules and new terminology that we don't use here.

[00:23:46] Speaker 00:
So our terminology does not necessarily translate to what they believe or what they say.

[00:23:52] Speaker 00:
And I think that having SBC cherry pick and take statements out of context and say that they mean things that they don't mean is not appropriate and it's not the issue on appeal.

[00:24:04] Speaker 00:
The issue on appeal, one of the issues on appeal is there was no service.

[00:24:09] Speaker 00:
With regards to sports, we've addressed that and I think Jeff Brand has acknowledged that what about all the other parties if the ultimate goal is to get the best and ultimate, best optimal price for the estate,

[00:24:22] Speaker 00:
Doesn't it make sense to give other potential interested parties notice?

[00:24:27] Speaker 00:
Which just didn't happen here.

[00:24:30] Speaker 00:
With regards to the Mickey Thompson case, which counsel has cited as, we've approved these types of deals for decades in the Ninth Circuit.

[00:24:37] Speaker 00:
The Mickey Thompson case is completely in a posit, Your Honor.

[00:24:41] Speaker 00:
That case was a review of a 1919.

[00:24:45] Speaker 00:
It was a settlement based on a sale under a 1919.

[00:24:48] Speaker 00:
Council keeps bringing up this 90-19 argument.

[00:24:51] Speaker 00:
As I set forth in my reply, I'd love to address the 90-19 argument, but we've never gotten there.

[00:24:58] Speaker 00:
If they would have addressed that in the lower court, then we would be addressing it here.

[00:25:03] Speaker 00:
But because of the fact that the lower court never considered it, because the trustee never considered sports offer as a genuine offer, that whole argument is red herring in a posit here.

[00:25:15] Speaker 00:
I want to go back to the trustee.

[00:25:18] Speaker 00:
Sports did not file an opposition and they did not show up at the hearing, but they did notify the trustee that they opposed.

[00:25:25] Speaker 00:
They did notify the trustee of their offer and the trustee never said to them, you must file an opposition.

[00:25:32] Speaker 00:
Rather, the trustee in his email said, your offer is under consideration.

[00:25:37] Speaker 00:
You are free to obtain counsel and file an opposition if you deem appropriate or necessary, I think was the language.

[00:25:44] Speaker 00:
Sports was entitled to rely on the trustee with a fiduciary obligation to the estate.

[00:25:51] Speaker 00:
The trustee was believed by sports to be a neutral third party, not just an appendage for SBC.

[00:25:58] Speaker 00:
Knowing what sports knows now, perhaps they would have acted much more strongly to protect its interests.

[00:26:07] Speaker 00:
But they firmly believed at this time, and again, on a nine business day window, that the trustee was like an officer of the court.

[00:26:16] Speaker 02:
And that they believed that the trustee was just gonna not go forward with the sale that they noticed because he wrote in the email, please feel free to file an opposition.

[00:26:27] Speaker 00:
They believed that the trustee was going to honor his statement that your offer is under consideration.

[00:26:33] Speaker 04:
And because of that, they decided not to bother

[00:26:37] Speaker 04:
phone into the hearing?

[00:26:39] Speaker 00:
They believed, again, eight hour time difference.

[00:26:42] Speaker 00:
They are not versed in Nevada law.

[00:26:44] Speaker 00:
They had not retained counsel.

[00:26:46] Speaker 00:
They had tried to retain counsel and had not retained counsel.

[00:26:49] Speaker 00:
I'm not going to excuse the fact that they didn't appear.

[00:26:52] Speaker 00:
What I'm standing for to you is the fact that they reasonably believed that the trustee was a neutral third party that was going to ensure that everything was handled appropriately and that their offer would be disclosed as an offer, but not as a

[00:27:06] Speaker 00:
alleged offer or a purported offer, they believed that if the trustee wanted to know the impetus of funds, the trustee would have asked.

[00:27:14] Speaker 00:
They believed that if the trustee wanted proof of funds, the trustee would have asked.

[00:27:18] Speaker 00:
They believed that if the trustee had any questions or concerns about its offer, the trustee would have asked.

[00:27:25] Speaker 00:
And I believe a truly neutral trustee would have, but that's not what happened here, Your Honors.

[00:27:32] Speaker 04:
Any further questions?

[00:27:33] Speaker 04:
No.

[00:27:34] Speaker 04:
Thank you very much.

[00:27:35] Speaker 00:
Thank you.

[00:27:35] Speaker 04:
The matter is submitted, and we'll get you a written decision in due course.

[00:27:38] Speaker 04:
Thank you, Your Honor.

[00:27:39] Speaker 04:
Thank you.

[00:27:39] Speaker 04:
All right.

[00:27:40] Speaker 04:
Thank you.

[00:27:40] Speaker 04:
That's the last argument case, so the court's adjourned.

[00:27:43] Speaker 00:
All rise.

[00:27:43] Speaker 00:
This court is now adjourned.