Willis Carto archive

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U.S. Bankruptcy Court proceedings transcript (6/18/2001)








Case no. 01-1234

Chapter 11

Washington, D.C.
Monday, June 18, 2001


Emergency Motion by Debtor for an Entry of an Order Authorizing Payment of Pre-petition Payroll




On behalf of the Debtor

On behalf of Legion for the Survival
of Freedom, Inc.

On behalf of the U.S. Trustee


THE CLERK: The next matter on Your Honor’s calendar is the matter of Liberty Lobby, Inc., Bankruptcy Case 01-1234. The matter before the Court is an emergency motion by the debtor for an entry of an order authorizing payment of pre-petition payroll.

Counsel, state your appearances for the record, please.

MR. STANTON: Thomas Stanton for the debtor, Your Honor.

MR. EARLY: Good afternoon, Your Honor. Dennis Early with the U.S. Trustee’s office.

MR. CLARK: Good afternoon, Your Honor. Darrell Clark for LSF, a creditor of the debtor.

THE COURT: Mr. Stanton, go ahead.

MR. STANTON: Your Honor, it is on our motion. Again, we have reviewed the issue of cash collateral and feel strongly that the LSF does not have a lien on the property. To have a lien, there had to be filed a UCC-1. We did not find a UCC-1, though. I cannot represent to the Court that that is a perfect search. We couldn't find a title examiner to search it in time for this hearing, and our look and I think Mr. Clark’s look is that none was filed, though as I told Mr. Clark this morning, I think the debtor, if asked, had an obligation to file one, but none was filed.

Your Honor, the issue basically comes down to whether or not Your Honor finds that because the plan provided for the filing of the UCC-1 and none was filed, we are governed by the intent and what we should have done. We were never asked to do it.

We were asked to provide an assignment of the Kefer estate, which we did, as Your Honor will recall, and the Kefer estate was assigned to LSF. We were not asked to execute the UCC-1, but we had an obligation to do that.

Worst case, I would ask that the Court enter an order at least permitting us to pay the payroll, pre-petition payroll, with post-petition funds as they come in.

We are also going to file an application for a loan with the Foundation for Economic Freedom, and if Your Honor would set a date for that, an early date for that, we can borrow the $45,000 from a company in which neither the officers nor the directors are in any way related to Liberty Lobby, though they are a co-tenant in the same operation. They publish what is called the Barnes Review. They expressed a willingness, as long as they get a super priority, to lend us the money for the payroll and a little bit of cash until the rest of the money comes in.

THE COURT: A super priority having —

MR. STANTON: Over other administrative costs.

THE COURT: I guess the argument that I want to hear momentarily is that there is supposed to be a lien, you shouldn't be able to shirk that lien by filing a new case.

MR. STANTON: Yes, Your Honor. I think there is some ground for that. I don't deny that argument, but as a matter of the technicals of this, it wasn't done. The plan called specifically for there to be a lien, and none was ever asked and none was ever provided. I think that there was — I don't think that there was a duty on the debtor to file it without at least being requested to do so.

THE COURT: Right, but it is a little bit different than the typical unrecorded lien. The plan created the lien.

MR. STANTON: The plan —

THE COURT: So this case is a little bit different than the typical unrecorded lien which is ineffective against the debtor because this is a case in which the debtor’s plan of reorganization provided for the lien, and to suggest that a debtor can come in with its assets that were supposed to be subject to a lien under a confirmed plan and undo the effect of that by saying, well, it is a new case and the debtor is a new debtor-in-possession in this new case with the power to avoid an unrecorded lien seems to me to disregard the reorganization of the debtor’s affairs that only occurred — what, a year ago?

MR. STANTON: Two years ago, Your Honor.

THE COURT: Was it 2 years ago?

MR. STANTON: Two years, in October '98.

Was it '98?

MR. CLARK: The case was filed in May of 1998, and the plan was confirmed in the fall of 1999.

MR. STANTON: 1999, that’s right. Two years, yes. I wasn't counting years, but I was — I mean, I wasn't counting —

THE COURT: I thought it was last year, and the years fly by. All right.

MR. STANTON: The Court should somewhat balance the equities because we did give them the Kefer estate, Your Honor, which may very well be worth in excess of a million dollars. Certainly, the lowest figure I had received from anyone was $600,000, which they —

THE COURT: Wasn't that required by the plan?

MR. STANTON: That was required by the plan, yes, Your Honor, but if Your Honor will recall, this plan — they chose to rescind the settlement agreement which provided all this, and the plan was to implement the settlement agreement.

Now, they have pulled out our release. They pulled out the forbearance on collection and our ability to get a discharge under the old plan, and they should not be allowed to completely enforce what is left of the plan, that Your Honor said that was still in existence, against us when we are looking for only to borrow $45,000. We are not asking for a huge amount of money to make our employee payments, and it is absolutely critical for the debtor to go forward, that the payroll be paid. This how the Spotlight continues to operate.

Thank you.

MR. CLARK: Your Honor, I was unable to find a UCC-1 that was recorded in the District, in Kentucky where the debtor has real property, or in Missouri where the debtor also has real property. As Your Honor may know, a UCC-1 has to be filed by the debtor, and so, if the debtor doesn't believe it was filed, then that is probably the case.

I do have a copy of the plan. So the Court’s order confirming the plan and the treatment of our class says all payments due to claimants — Section 5.04 of the plan — all payments due to claimants which are unpaid after the effective date shall be secured by a lien on all of the debtor’s assets, and then it provides for the creation of the lien.

I agree with Your Honor that the debtor should not be able to shirk the lien by filing a new case, and we are sort of put at this position where we need to — with due respect to the debtor’s employees, who I am sure have mortgages and homes and families, but this is the 30-some-odd lawsuit between these parties, and it has really gone on long enough, and we would not, if we do have a lien, equitable or not, consent to the use of our lien without adequate protection.

Thank you.

MR. EARLY: Your Honor, I really don't have anything to add. I was not at the last hearing.

I understand there is a date set for the 27th on any motions to dismiss. We will in all likelihood either file a motion or support any motion that is filed, and assuming the case that is now — the most recent Chapter 11 case is dismissed, I am not sure — I guess that would put us back in the same position that the debtor was in post-confirmation that meant they are using the Legion’s property to make payroll. As the Court noted, I don't think that is a good reason to file for bankruptcy, to shirk the responsibility as set forth in the previous plan.

THE COURT: What are the claimants in the case, Mr. Stanton?

MR. STANTON: The claimants in the case are the Legion, which originally had a debt of about $4.3 million. There would be accrued interest on that, which the debtor has paid against it, some $520,000 in the normal payments under the plan.

The other claimants are the subscribers who have a subscriber liability of approximately $2 million. That liability was a non-impaired liability under our plan, and we intended to pay them out as we operated and honor those subscriptions.

THE COURT: It really wasn’t — what was their claim based upon?

MR. STANTON: The claim was based on the fact they have prepaid subscription amounts, some of them into the hundreds of dollars, I find out, and they are entitled to receive copies of the Spotlight in exchange for those subscriptions that have been paid in. In a publishing case —

THE COURT: How does a plan get confirmed in this case if —

MR. STANTON: We did not impair them. We agreed to pay the amount in full under the plan.

THE COURT: I am not talking about the prior case.

How are you going to get the plan confirmed in the present case if you have got a creditor with a claim of — what, over $2 million?

MR. STANTON: $2 million.

THE COURT: The Legion for Survival of Freedom?

MR. STANTON: The Legion for Survival of Freedom is like 3.8, Your Honor.

THE COURT: With a $3.8-million claim and totalling the class of unsecured creditors, how are you going to get a confirmed plan?

MR. STANTON: Your Honor, because there would be two classes. There would be the Legion’s judgment, and there would be these subscriber claims. And we would ask for nothing more than we have opportunity to pay out the original settlement amount. We are not asking for anything other than to be able to pay what we have been paying and to provide what we had originally provided in the other plan.

If we end up in negotiations having to pay more, which is what I believe we are going to end up having to do, then we would set that off against the subscription amount and pay the subscribers out of the subscription amounts at some lower percentage amount.

THE COURT: In reaching the merits of whether the case should be dismissed, in deciding this motion to pay employees necessarily because, if the case should be dismissed, then I ought not be authorizing the payment of employees, and the grounds for the dismissal are that you are trying to shirk your responsibilities under a prior confirmed plan that is spelled out exactly what the rights of the parties who are still the same principal creditors, the Legion for the Survival of Freedom and the prepaid subscriptions, and the plan spelled out what the rights of the parties were and there was to be a lien.

There is no assurance of adequate protection of that lien being offered today, and it seems to me there comes a point when it doesn’t make sense to allow the debtor to file simply because its first confirmed plan of reorganization didn't work out, when there are all of the same principal players all over again.

I know we have had multiple filings in this Court. We had UPI-1 and UPI-2. I recused myself, I think, from large parts of those two cases, but — I guess UPI-2 ended up somewhere else, but the point is that —

MR. STANTON: Your Honor, we —

THE COURT: You have got a plan that calls for a lien. You are not supposed to be able to devote the assets to other purposes in the face of that lien unless you can provide some adequate protection in the filing of this case.

It seems to me that although — if this case were allowed to be dismissed, you would have the rights of a trustee to avoid any lien provided under the prior plan. If the debtor takes that position, the lien created and the resolution of the rights of all of the parties, the failure to grant a UCC-1 doesn't change the fact that the prior plan did create a lien.

MR. STANTON: That is why my remarks to the Court, I would just ask that the Court authorize the payroll going forward if the Court finds that that lien exists.

I do see those, the contractual problem of having to come back here again a second time and not having provided that lien. If Your Honor feels that the lien should be in effect, then we would stipulate the lien as in effect, but what would happen in this case, if this is an operating entity that was able to continue to operate and has paid this creditor $500,000 in a year and a half, and under the plan, would it be able to pay the creditor out in full, partially out of the Kefer estate which they already have and partially out of ongoing operational receipts, if Your Honor denies them the right to reorganize because of the entry of the judgment and the collection action in California that says that they no longer had to honor the settlement agreement, then we at least ought to have a — they have broken the egg, and the only way we can put an egg back together is to seek relief from this Court to have some way of providing this debtor with a discharge if it pays the debt out.

Everyone agreed that we were paying them everything Liberty Lobby had, the equity — in fact, in a liquidation — and this is only worth 200,000 — $290,000. it is only as an operating entity that it has any ability to pay this debt out, and if they were to win, they will put 19 people out at work, plus the 10, 29 people out of work, silence the voice of Liberty Lobby that has been here 40 years. Liberty Lobby, for the same reason we couldn't appeal the first judgment in California, where they required a $4-million cash bond or we couldn't appeal this thing that was entered in the collection action, and, again, we couldn't post the bond. So, in effect, we have been denied an ability to really present to a court — there was never any testimony there. It was, literally, it went in like on a Friday, and the judge threw out the settlement agreement. And we have no way of bringing that before a court if we can't post a bond.

It isn't like we have been behaving badly in this case. We paid out every payment on time, and the issue that they said that we filed a case, a Lanham case in violation of that and, therefore, the whole thing ought to be vitiated, the proper response to that is either we didn't — if we didn't have authority to do it, then they ought to be able to get their attorney fees and have the case dismissed. And that is what is before the District Court here, but before the District Court rules, we will not even have had that chance to litigate that, never having had a chance to bring closure on this thing in a normal judicial way, where you do have a right to appeal, you do have a right to be heard out.

The Court in California never considered the fact that this was a debtor-in-possession, never considered this was a confirmed plan rather, that there was a contract between these parties, and it would have been so far performed by the debtor. The assignment of the Kefer estate, whether these are assigned or they should have been, whatever, the debtor has made every payment under the plan. Now the debtor is just looking at no way out.

THE COURT: Wasn't that the way the previous plan essentially promulgated, that if there was a default and LSF is entitled to all of those security interests, it would be curtains for the debtor, that the debtor be liquidated by a reasonable enforcement of the lien?

MR. STANTON: In a liquidation, at least the subscribers would get a portion of the money, and the debtor in —

THE COURT: Not if a lien had been given to the Legion, giving it a first —

MR. STANTON: No, the lien runs to all creditors. They would also be entitled to it. They are creditors under the plan. They are just not impaired creditors.

THE COURT: Is that right, Mr. Clark? Is that what the plan says?

MR. CLARK: The plan says: As security for performance under this plan, the full indebtedness to the Legion and to all other creditors who do not receive all payments due them under the plan on the effective date shall be secured by a lien and security interest.

I can share it with the Court, if you would like, Your Honor.

I think, though, that the Class 4 claimants, the subscribers, were treated as unimpaired under the plan.

MR. STANTON: But they weren't paid.

THE COURT: If they weren't paid on the effective date, Mr. Clark, they are unimpaired, but —

Let me see the plan, please.

(Pause in proceedings.)

THE COURT: The unsecured creditors in the case?

MR. STANTON: Yes, Your Honor. They have all been paid.

THE COURT: They have all been paid in full?


(Pause in proceedings.)

THE COURT: It seems to me that Article 5 dealing with treatment of claims and interest under the plan and that Section 5.04 reciting that all payments due to the claimants which are unpaid after the effective date shall be secured by a lien on all of the debtor’s assets as set forth in Section 7.02 — it was written in the context of the lien protecting the payments required for Article 5 claimants, the claimants that are addressed in Article 5, and that doesn't include the Class 4 claims. They were just simply subscribers who would continue to get their subscriptions and retain the right to sue for breach if they didn't continue to get their publications in the mail. That is just looking at Article 5.

Now, Article 7, which implementation of the plan —

(Pause in proceedings.)

THE COURT: It is dealing with assuring that the payments due under the plan are made. So I don't think it has anything to do with the subscribers. I think it is strictly a lien for the benefit of the general unsecured creditors who have already been paid in full and for the Legion. So the intention was that there would be a lien on all of the debtor’s assets to secure performance for the Legion as well as these other unsecured creditors who haven't been paid.

The last sentence of Section 7.02 reinforces that by saying for debtor’s interest in the Kefer estate, to dedicate the payment of the allowed claim of the Legion and may be assigned to the Legion at the Legion’s request, and it shall not be available as security for the payments due to the Class 2 claims. There is no mention of Class 3. So I think this is a lien that was intended for the benefit of the creditors and to have scheduled payments coming to them under the plan, to the Legion and some trade creditors.

So, Mr. Clark, what do you say about the revocation of setting aside the forbearance agreement by the Court in California? Does that change the picture? Does that undo the assignments and the lien and so forth?

MR. CLARK: I believe you previously ruled, Your Honor, at the last hearing on this that, to the extent of some of the performance under the plan, such as the promise for the lien and the assignment of the Kefer estate, that that would put us back at square one.

With the payments that were already made, Your Honor ruled that they were returned with one hand and simultaneously executed upon on the other hand.

THE COURT: All right. Thank you.

My instincts tell me that this is a case in which the debtor and the Legion settled their differences in the prior case, and the debtor granted a lien to protect the Legion, a lien on all its assets.

MR. STANTON: It was to ensure payment, Your Honor, and this debtor made every payment.

THE COURT: Well, the problem is we have got a judgment from California which says that the stay of enforcement of the judgment is no longer in effect, and there is some provision in this plan to provided for that agreement that has been set aside to be part of the plan.

Where is that, Mr. Stanton?

MR. STANTON: It is not here, Your Honor.

MR. CLARK: The settlement agreement is a defined term in the plan. The disclosure statement incorporates all of the terms in the settlement agreement and attached them.

MR. STANTON: In the disclosure statement, but not in the plan, Your Honor. They didn't want it in the plan.

(Pause in proceedings.)

THE COURT: Where was there any mention of the settlement agreement being a term of the plan, Mr. Clark?

MR. CLARK: Well, it is a defined term in the plan, Your Honor. I see that.

THE COURT: I see that, too, but I don't see where it means anything. It is just a definition hanging there all loose by itself.

MR. CLARK: I'm sorry, Your Honor. You caught me by surprise with that.

I know it is in the disclosure statement, and your Honor previously ruled that the settlement was made part of the plan of reorganization, this transcript here.

I will note, too, Your Honor, that the California judge ruled specifically that one of the items in default was the failure to pay interest when due, and interest is clearly required in Class 3 on page 13 and page 14.

THE COURT: Here is the mention of the settlement agreement on page 19, Section 9.04. For hearing and resolving, the Court retains jurisdiction. And purposes of, quote, hearing and resolving any disputes under the settlement agreement between the debtor and the Legion for the Survival of Freedom … discovery provisions are enforcement of the agreement, unquote.

So that agreement, I guess, was intended to be part of the plan, Mr. Stanton. It is right here in the plan that I would have jurisdiction to enforce its terms. I think it said — to be something followed by the debtor, and I don't have that in front of me today. I assumed it called for the payments that are called for by the plan and plus this provision about not — the representation is made that interest wasn't paid.

MR. STANTON: Your Honor, the representation would not be that they had ever demanded any interest from us for the entire period. The interest — there was an agreement that the interest would be ruled at the end. They went into court in California and came in and claimed the interest that they were only to be paid at the end of the plan. That was the agreement.

THE COURT: What agreement? Are you talking about a term of the plan? It says only at the end of the plan?

MR. STANTON: No, but between counsel, Your Honor, under the effort to execute the plan and to meet all of its terms.

THE COURT: But that issue was litigated in California, and you lost on it, right?

MR. STANTON: Your Honor, it was litigated in California, and we lost on it in a motion in which the lawyer in California knew nothing about the details of it on a Friday.

THE COURT: The time to file a Rule 59 motion or its equivalent under California rules of practice has expired, and the time to take an appeal has expired or it has not been prosecuted or something.

MR. STANTON: There was no money to raise the — for the appeal bond, which was $4 million.

MR. CLARK: For clarification, Your Honor, Liberty Lobby had counsel. They filed pleadings. It was the same counsel that represented Mr. Carto in his bankruptcy case, who is also a party in the settlement agreement.

There was an appeal, and the California Court of Appeals that actually stayed it, stayed the appeal for some time, and that stay expired. The appeal was ultimately dismissed. And I'm sorry, Your Honor, I don't have the order with me, but the appeal was dismissed for failure to file a brief.

MR. STANTON: The purpose of the stay was to see whether the Court and — whether the Court would grant them a right to proceed without posting a bond, and it denied that. There was no — and the bond was $4 million.

THE COURT: It seems to me, we have a case in which there was a confirmed plan that provided for the settlement agreement to be part of the terms of the plan. That is mentioned in the plan. It is something this Court could enforce. So I think it is implicit that this settlement agreement was to continue to be a document governing the rights of the parties, and that spelled out when there would be forbearance for collection.

The plan also spelled out that there would be a lien in favor of the creditors who were supposed to receive payments under the plan, and the Legion was one of those. The other creditors that were supposed to receive payments were some trade creditors who were Class 2. Class 1 was a general administrative convenience class that has been paid in full as well.

So the only class left is the Legion who is supposed to receive a lien that would tie up all of the debtor’s assets. There is a provision which says a lien filed with a financial statement, UCC-1, with respect to all other property of the debtor. I don't know if that means presently owned property or property that comes into the debtor’s possession in the future.

The 5.04 doesn't clear it up very well either. It says all payments due to claimants which are unpaid as of the effective date shall be secured by lien on all of the debtor’s assets as set forth in Section 7.02. So even that is not helpful.

But what is clear to the Court is that we have a case in which there were a bunch of general unsecured creditors, trade creditors. There was the Legion, and you had the subscribers. The trade creditors have been paid in full, but the Legion hasn't expressed to have a lien protecting its interest. It had a forbearance agreement that could be enforced as part of the terms of the plan, and we still have the Legion and the subscribers who have made deposits for subscriptions who feel they have a claim if the debtor didn't deliver on those in the future. So they have got a contingent claim.

The representation is that there is about $2 million in prepaid subscriptions.

MR. STANTON: I think there is one clarification, Your Honor, that I had not even thought about. Those subscriptions have got to be a rolling debt. A lot of that money that is owed now was $2 million. Some of it was honored, but some of it has accrued to the extent of 2 years of operations post-confirmation. So I guess what I am saying is that we are not dealing with the same case. We are dealing with two sets of subscriber creditors, old creditors and new creditors.

MR. EARLY: Your Honor, by the same token, I would imagine the subscribers that have been in existence from the previous case have had their subscriptions either paid down or eliminated during the period between the two cases. It has been ongoing for almost 2 years. So, unless they prepaid their subscription for a longer period of time — some of them may have. Some of them may have, but I would assume the vast majority probably didn't.

THE COURT: All right. I am back to where I started which is I think you have to get into the merits of whether the case was properly filed in order to determine what should be used to the detriment of the Legion discovering that it didn't have a lien, but the debtor is supposed to have had one and it did not. The Legion would have filed a motion to reopen the prior case, filed a complaint or a motion, whatever is appropriate, to compel the debtor to issue the UCC-1 and thereby receive the lien to which it was entitled and proceed to try to enforce that lien. There is ambiguity as to how extensive that lien was supposed to be. It says all of the property of the debtor was to be covered by a lien. It is not a defined term.

I don't have the disclosure statements. So I am not sure what the parties may have contemplated by way of discussion in the disclosure statement. I am going on the document that is in front of me.

It seems to me the debtor was in a position of operating a newspaper and getting distributions — of getting income from the operation of the newspaper from which it intended to make distributions in the future, and that it was within the contemplation of the parties that there would be a lien in favor of the Legion upon the debtor’s assets on an ongoing basis. It would be a floating lien. As the old subscriptions were filled, publications of the newspaper were sent to them, and as new subscriptions came in, the old monies that were on hand from the old subscriptions, of course, would have rolled over into the new funds that were not on hand at the time that the plan was confirmed.

It just stands to logic that the Legion was looking to the debtor’s asset base on a going-forward basis, not simply frozen in time as of the date of confirmation of the plan.

The plan contemplated the debtor would be allowed to operate and to generate funds and get new subscriptions which would generate new funds, and if those were to be deemed assets of the debtor by which there would be a lien. I think there has been a contemplation of the parties that there would be a lien on the debtor’s present and future assets. There is no qualification of what assets were to be subject to a lien in the plan.

Now, what that means is that we have a plan to settle a major dispute between the debtor and the Legion for the Survival of Freedom.

The debtor’s financial picture as to what he was doing, to continue to operate a newspaper, hasn't changed, and it has this one major creditor with which it has been battling. There was a settlement agreement between the parties regarding a judgment that had been recovered against the debtor by the Legion, that forbearance agreement contained in that settlement agreement. It has been the subject of litigation in California. It didn't work out, and the Legion is now prepared to collect its judgment. If that means that the debtor is unable to operate, the Legion wants to go ahead and collect.

In the meantime, there have been new subscribers who have put in funds. Maybe it is for new and old subscriptions in some cases, but, technically, new claims against the debtor based upon subscriptions.

But the plan in the case called for a — in the prior case called for a lien to be granted to the Legion. This Court would have entered an order compelling the granting of the lien, and I frankly don't see how the subscribers are likely to be able to argue that they were in a position of relying upon the debtor’s lack of any liens upon its property of a recorded nature to protect them. The trustee would be able to make that argument, but I think you have to consider the interest of finality and wrapping up a collection dispute between the debtor and the major creditor as paramount in these circumstances.

So I am going to deny the motion. I do not think it is appropriate for the debtor to shirk the lien it was supposed to grant to the Legion, and the debtor has not offered adequate protection.

Do you need a date, Mr. Stanton, for your borrowing motion?

MR. STANTON: Yes, Your Honor.

THE COURT: What date are we having the motion for dismissal here?

THE CLERK: The 27th.

THE COURT: The 27th.

MR. CLARK: The earlier date, if possible, Your Honor.

THE COURT: Let’s hear it on the 27th at 10:30.

MR. CLARK: I think Your Honor set this for 2:00.

THE COURT: Is it for 2:00?

THE CLERK: It is 2:00 p.m., yes.

THE COURT: June 27th at 2:00 p.m. You can notice up your motion for June the 27th at 2:00 p.m.

The emergency motion to pay pre-petition payroll is denied.

Thank you, Counsel.

MR. CLARK: Your Honor, two housekeeping matters. We were supposed to have a hearing on Thursday at 10:00 in the prior bankruptcy case about the adversary proceeding, and I believe Mr. Stanton filed a motion to dismiss that adversary proceeding.

MR. STANTON: Yes, Your Honor.

MR. CLARK: We have never — we filed a motion to dismiss it as well.

THE COURT: I signed an order last Thursday. I came in on Friday. So all the orders hadn't been taken upstairs. It is probably being entered today.

MR. STANTON: Thank you, Your Honor.

MR. CLARK: And I don't believe the petition was signed.

MR. STANTON: Your Honor, might I have leave to sign that petition? Mr. Clark raised that. Apparently, the copy that was sent to the Court was not signed.

THE COURT: Leave for you to sign it, Mr. Stanton.

MR. CLARK: Thank you, Your Honor.

THE CLERK: Your Honor, that concludes the matters we have for this afternoon.

THE COURT: Let me add one word before we leave.

Are we still on the —

THE CLERK: Yes, we are.

THE COURT: I haven't looked at this issue of seriatim filings in the context of Chapter 11, and I am not precluding the debtor from rearguing the issue obviously when it comes time to hear the motion to dismiss.

Thank you, Counsel.

THE CLERK: Everyone rise. This Honorable Court stands adjourned. The parties in this matter are excused.

(Proceedings adjourned.)