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In Re, Silver State Broadcasting.

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Appellants Silver State Broadcasting, Golden State Broadcasting, and Major Market LLC have submitted on the briefs.

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Talitha Gray Kozlowski, Council for Appellee, Michael Warren Carmel, Chapter 11, Trustee.

[00:00:23] Speaker 04:
Okay, so we will not be hearing spirited argument from our appellant today, correct?

[00:00:30] Speaker 04:
Okay.

[00:00:31] Speaker 04:
I'm tempted to ask if you want to reserve five minutes, but come on up.

[00:00:36] Speaker 04:
Come on up, okay.

[00:00:43] Speaker 04:
Go ahead and make your appearance.

[00:00:45] Speaker 00:
Thank you.

[00:00:46] Speaker 00:
Good morning.

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May it please the court to lead the great Kozlowski on behalf of the appellee, Michael Carmel, the trustee for three different states, Golden State Broadcasting, Silver State Broadcasting, and Major Market Radio.

[00:00:57] Speaker 00:
Candidly, honors, we weren't quite sure whether appellant would be appearing or not, and so...

[00:01:04] Speaker 04:
Well, I guess we gave them the option of not appearing and they took us up on that.

[00:01:08] Speaker 04:
So there you go.

[00:01:08] Speaker 00:
Okay.

[00:01:09] Speaker 00:
Yes.

[00:01:09] Speaker 00:
Thank you.

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I do believe our papers have addressed most of the issues in pretty significant detail, but I did want to highlight the application of 363.

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The Unite Circuit has consistently affirmed the importance of finality in bankruptcy sales.

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In this situation, we have an appeal from a sale order for seven radio stations and their translators to three separate purchasers.

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Each of those sales have closed.

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The properties have been transferred to the respective buyers between February 1st of 2024 and May 8th of 2024.

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We are now at a point where all three of the debtors have also confirmed their plans of reorganization which have gone effective and on the effective date the sale proceeds have begun to be distributed out to the creditors.

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So these are certainly well on their way to being fully consummated.

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When we look at 363, there are two requirements.

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The first is whether there's a state pending appeal and the situation not only was a state not granted, a state was never requested.

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The second is obviously the good faith purchaser component.

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In this situation, I think it's really important to highlight that there is no dispute with respect to two of the three purchasers, friends of KEXP and autopilot.

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The only dispute did come with respect to VCY America.

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And Your Honors, the Bankruptcy Court did make detailed good-faith findings in the record, and that's found at SCR 999-1003, as well as within the sale order itself.

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In this instance, to reverse, Your Honor, you would have to find that the bankruptcy court's findings were clearly erroneous and respectfully submit that they were not.

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When we look at what constitutes good faith, the in-rate Ewell case from the Ninth Circuit discusses that there must be an evidence of fraud or collusion or other attempts to take a grossly unfair advantage of the other bidders.

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and submit that there's absolutely no evidence whatsoever of that in the record.

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Here, as the record proves, we have the bankruptcy court found that the auction was conducted consistent with the big procedures that were properly noticed

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ample time for marketing.

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We have an auction that was conducted in court.

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You had six qualified bidders and five active bidders in, again, a live auction.

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The bankruptcy court found that there was a robust auction with bidding, and again, the transcript is in the record describing all of those proceedings.

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We also have a situation where you had a stocking horse, and the bids that ultimately resulted are 1.6 million in excess of that stocking horse bid.

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with three buyers.

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Somewhat, I think, unusually in an auction process, the Bankruptcy Court took the additional step of inquiring of every single bidder, whether they engaged in a conclusion, whether they acted independently in the bidding, and specifically inquired of their process and what happened during the auction, and relied on those inquiries in making his good-paid finding.

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The contention by the appellant is that BCY had engaged in conduct that they took umbrage with not only before the trustees appointment, but in this instance, even before the bankruptcy cases were filed.

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While there is much zealousness in the contentions, there's nothing in the evidentiary record that even substantiates these allegations of activities that occurred prior to October of 2021.

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Again, the standard here is the court would have to find that the bankruptcy court's findings of good faith were clearly erroneous.

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Again, ample evidence in the record to support the bankruptcy court's finding of good faith with respect to all purchasers.

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Your Honor, we do believe that in this instance where you don't have a stay, where the evidence is clear that the purchasers acted in good faith,

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that their 363M does apply, that the reversal or modification of a sale order can't affect the validity of those sales, which again are consummated and sale proceeds just being distributed to creditors.

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In that instance, we do believe that it was appropriate to dismiss this appeal as moot because there isn't any relief that could be fashioned at this point.

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I'm certainly happy to answer any questions.

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There were additional issues raised.

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I think they were amply briefed in our response brief.

[00:05:47] Speaker 03:
And there was a recent submission demonstrating that plans had also gone effective, right?

[00:05:53] Speaker 00:
That is correct, Your Honors, yes.

[00:05:54] Speaker 04:
So maybe that's if we ever wanted to take up the issue of equitable moodness, which we may, may not, we'd have a discussion about that, right?

[00:06:03] Speaker 04:
Yes, Your Honor.

[00:06:03] Speaker 05:
All right.

[00:06:04] Speaker 05:
You're not resting solely on that.

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You also believe that even if there was a stay, this should be affirmed.

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Yeah, absolutely.

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Yes.

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So and our brief walkthrough at length, the propriety of the court's ruling, you know, to reverse, you would have to find there was an abuse of discretion in affirming the sale of the bankruptcy court.

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Again, made detailed findings walking through both 363

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as in its totality as well as with respect to the finite tangible personal property that was in dispute the as the we discussed in our papers there was the one small dispute with respect to whether certain of the equipment utilized to operate the radio stations was that

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Mr. Stolls held some sort of interest in it there was no dispute it was property of the estate that was admitted it was clearly admitted in the record in fact Mr. Stolls had actively sought relief affirming that that property was property of the estate but then through the sale claimed that he had some sort of interest the record is clear that the original acquisition of the radio stations by the debtors included that tangible personal property and

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each one of those purchase agreements filed with the FCC was in the record.

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The only contrary evidence, and I use that loosely, was Mr. Stoltz's self-serving statements that he in fact owned that there was no assignment, there was no other documented evidence supporting that whatsoever.

[00:07:37] Speaker 06:
There was no proof of claim filed by him either, was there?

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That is correct.

[00:07:42] Speaker 04:
Or a lawsuit saying, guess what, that's not yours, it's mine?

[00:07:45] Speaker 04:
That is also correct.

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Okay.

[00:07:47] Speaker 00:
Yes, thank you.

[00:07:48] Speaker 02:
I have one question about the allowance of the VCY claim.

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Your briefing talks about the use of the claim as bid currency, but that claim was not credit bid, was it?

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Didn't VCY pay cash for the full dollar amount of its bid?

[00:08:05] Speaker 00:
Absolutely, very good question.

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So it was not a credit bid in in negotiating the original stocking horse.

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Vcy wasn't willing to increase its stocking horse bid, but what it would agree to do was to reduce its proof of claim.

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And so trustee Carmel sought that additional consideration and then in connection conjunction with the bidding.

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Ultimately, in exchange for other concessions,

[00:08:31] Speaker 02:
Subsequent bid did not include that reduction, but it was not a credit bid And it's not a situation where the trustee said okay the cash portion

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of the ... This is hypothetical.

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The cash portion of the KEXP bid, for example, is less than the ... Got that backwards.

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The cash portion of the VCY bid is less than the case EXP bid, but you should still approve the VCY bid because of this deal with the claim.

[00:09:02] Speaker 02:
That's not what happened, right?

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They were just comparing the cash portions of the bid, weren't they?

[00:09:08] Speaker 00:
Yes, that is correct.

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And in fact, it was the differential was, I believe, slightly less than 2.1 million compared with 3.75 million.

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So a meaningful increase when you look at dollars to dollars.

[00:09:21] Speaker 00:
Absolutely.

[00:09:22] Speaker 02:
Thank you.

[00:09:25] Speaker 04:
That's all I've got.

[00:09:27] Speaker 04:
I have nothing more.

[00:09:28] Speaker 04:
Judge Corbett?

[00:09:28] Speaker 04:
No questions.

[00:09:29] Speaker 04:
Okay.

[00:09:29] Speaker 04:
Thank you very much.

[00:09:30] Speaker 04:
Thank you.

[00:09:31] Speaker 04:
And thanks to you and your absent cohort for your good arguments.

[00:09:36] Speaker 04:
This matter is under submission.

[00:09:37] Speaker 04:
We'll do our best to get your written decision as soon as we can.

[00:09:40] Speaker 04:
Thank you very much.

[00:09:43] Speaker 04:
Okay.

[00:09:43] Speaker 04:
With that, I believe we are concluded.

[00:09:47] Speaker 01:
All rise.

[00:09:49] Speaker 01:
This session is now adjourned.