WEBVTT 00:00:06.470 --> 00:00:09.509 Okay, good morning everyone. This is Judge Kaplan 00:00:09.509 --> 00:00:17.329 and we will be hearing on the BlockFi matter 00:00:17.329 --> 00:00:21.850 involving Mr. Van Tubergen. Your Honor, I at 00:00:21.850 --> 00:00:28.390 least cannot hear you. Try it again. Can you 00:00:28.390 --> 00:00:31.690 all hear me? Yes, Your Honor. All right. I can 00:00:31.690 --> 00:00:35.840 hear you all. So it's a plus. You never know 00:00:35.840 --> 00:00:39.679 Monday mornings. All right. We'll be hearing 00:00:39.679 --> 00:00:43.359 this morning's Block 5 matter regarding Mr. Van 00:00:43.359 --> 00:00:51.920 Tuber here. And this is on remand from the district 00:00:51.920 --> 00:01:01.200 court relative to one issue as to allegations 00:01:01.200 --> 00:01:07.840 surrounding certain missing EF. I've read and 00:01:07.840 --> 00:01:10.519 I've received and I've read both the underlying 00:01:10.519 --> 00:01:14.239 motion that was filed on behalf of the wind down 00:01:14.239 --> 00:01:23.420 administrator, wind down debtor, in effect seeking 00:01:23.420 --> 00:01:27.680 adjudication of the merits of this issue and 00:01:27.680 --> 00:01:33.280 also alternatively estimating the claim. I've 00:01:33.280 --> 00:01:35.760 reviewed the two certifications that have been 00:01:35.760 --> 00:01:39.120 submitted on behalf of the claimant. And then 00:01:39.120 --> 00:01:44.640 there was a response by the wind down debtor. 00:01:46.299 --> 00:01:50.439 So having read all the submissions, I'm going 00:01:50.439 --> 00:01:55.459 to look for oral argument on the next step, which 00:01:55.459 --> 00:01:59.319 would be a continuation of the written arguments. 00:01:59.879 --> 00:02:04.129 So I would turn. first actually to Mr. Magdales 00:02:04.129 --> 00:02:08.210 on behalf of his client if he wishes the opportunity 00:02:08.210 --> 00:02:13.949 to respond to the wind down debtor's reply. If 00:02:13.949 --> 00:02:16.569 you want to add anything that's not in your papers 00:02:16.569 --> 00:02:22.449 or otherwise respond and then of course Mr. Arlette 00:02:22.449 --> 00:02:26.550 will let you address any issues. But before we 00:02:26.550 --> 00:02:29.789 go there are there any procedural issues the 00:02:29.789 --> 00:02:33.289 parties want to address? on today's hearing. 00:02:36.370 --> 00:02:38.389 Not from the wind down debtors, your honor. So 00:02:38.389 --> 00:02:40.370 let me start off correctly as if you're all in 00:02:40.370 --> 00:02:44.509 court. Let me just have appearances for the wind 00:02:44.509 --> 00:02:47.849 down debtor. Good morning, your honor. Kenneth 00:02:47.849 --> 00:02:50.069 Ouellette of Brown Rudnick for the wind down 00:02:50.069 --> 00:02:55.330 debtors. All right. Now for the claimant. Good 00:02:55.330 --> 00:02:58.180 morning, your honor. Good morning, Ken. Joe Magalhase, 00:02:58.460 --> 00:03:00.879 Eckerd Siemens on behalf of claimant John Van 00:03:00.879 --> 00:03:03.919 Tubergen. And already I'm going to start with 00:03:03.919 --> 00:03:06.400 an apology because I mispronounced your name, 00:03:06.460 --> 00:03:10.280 Mr. Tubergen. Give you a hard G, but I'll get 00:03:10.280 --> 00:03:14.500 it right eventually. All right. Council, then 00:03:14.500 --> 00:03:18.379 let's follow suit in the manner I suggested. 00:03:18.479 --> 00:03:21.439 Let me hear on behalf of the claimant. Thank 00:03:21.439 --> 00:03:25.360 you, Your Honor. So I knew I was up against... 00:03:25.069 --> 00:03:27.189 quality lawyers in this case, Your Honor, so 00:03:27.189 --> 00:03:30.330 I was not surprised to find some arguments in 00:03:30.330 --> 00:03:33.650 the reply that do force me to address them. And 00:03:33.650 --> 00:03:35.629 I want to start with the integration clause, 00:03:35.889 --> 00:03:41.969 because it's a tricky argument, naturally. And 00:03:41.969 --> 00:03:44.590 where I featured in my papers, it was in a particular 00:03:44.590 --> 00:03:49.389 context, and it was in a context of honing in 00:03:49.389 --> 00:03:53.919 on just the numerosity of the ETH. And I made 00:03:53.919 --> 00:03:56.900 the argument, Judge, that if you did a strict 00:03:56.900 --> 00:04:01.500 application of the integration clause in a manner 00:04:01.500 --> 00:04:04.800 in which, respectfully, we view the Court as 00:04:04.800 --> 00:04:07.639 having done a very strict application of particular 00:04:07.639 --> 00:04:11.240 aspects of language of the LSAs, then that is 00:04:11.240 --> 00:04:14.800 how we would see the argument shaping up. Meaning, 00:04:14.840 --> 00:04:18.220 if you took the integration clause and you superimposed 00:04:18.220 --> 00:04:21.500 it over this dispute, over the numerosity of 00:04:21.500 --> 00:04:24.209 the ETH, then we believe the best evidence is 00:04:24.209 --> 00:04:27.870 the LSA. We would construe the emails as not 00:04:27.870 --> 00:04:30.370 trumping the LSA, as not being related documents 00:04:30.370 --> 00:04:33.470 for purposes of, you know, it's not like it's 00:04:33.470 --> 00:04:35.750 an index or a schedule that would modify that 00:04:35.750 --> 00:04:38.870 term. And therefore, on the issue of the numerosity 00:04:38.870 --> 00:04:42.910 of the disputed ETH, Mr. Van Tubergen would be 00:04:42.910 --> 00:04:46.670 entitled to prevail. Really, though, Judge, for 00:04:46.670 --> 00:04:49.769 us, that was a worst -case scenario application. 00:04:50.409 --> 00:04:52.790 strict application of the integration clause. 00:04:53.449 --> 00:04:56.269 Our default position, I think we've made it clear 00:04:56.269 --> 00:04:59.490 throughout, Judge, is that we want all relevant 00:04:59.490 --> 00:05:03.189 and material evidence to be included and considered. 00:05:03.810 --> 00:05:06.209 You know, light is the great disinfectant. I 00:05:06.209 --> 00:05:08.050 think we've been through enough ages of enlightenment 00:05:08.050 --> 00:05:11.569 to know that less information is never a good 00:05:11.569 --> 00:05:15.589 thing. And thus, that's our default position. 00:05:15.810 --> 00:05:18.790 We noted that the district court cited the integration 00:05:18.790 --> 00:05:23.050 clause. Judge, previously the parties and the 00:05:23.050 --> 00:05:25.750 court had not made a big deal about it. So I 00:05:25.750 --> 00:05:28.629 had to confront it. I tried to confront the nightmare 00:05:28.629 --> 00:05:32.209 scenario of a strict application. That's what 00:05:32.209 --> 00:05:36.689 I said. Additionally, I would say to me, whether 00:05:36.689 --> 00:05:40.870 something's a related document is not synonymous 00:05:40.870 --> 00:05:45.829 or within necessarily the ambit of whether it's 00:05:45.829 --> 00:05:48.629 admissible parole evidence. So that's the other 00:05:48.629 --> 00:05:50.129 thing I'd say, because really where all this 00:05:50.129 --> 00:05:52.910 is leading is naturally for the court to have 00:05:52.910 --> 00:05:55.430 a full flavor of what's going on, it should look 00:05:55.430 --> 00:05:58.389 to the emails, because we made the related points 00:05:58.389 --> 00:06:03.149 that the emails in the subject line reinstatement 00:06:03.149 --> 00:06:06.189 proposal. And I just want to get to that and 00:06:06.189 --> 00:06:10.529 essentially that in a moment. But the point of 00:06:10.529 --> 00:06:13.089 integration clauses, Your Honor, is to uphold 00:06:13.089 --> 00:06:17.459 the integrity of contracts. not to result in 00:06:17.459 --> 00:06:21.459 a perversion thereof. And therefore, if an integration 00:06:21.459 --> 00:06:23.800 clause argument was taken to mean that everything 00:06:23.800 --> 00:06:25.899 should be excluded, you could only look at the 00:06:25.899 --> 00:06:29.660 four corners, that I think would result in manifest 00:06:29.660 --> 00:06:32.959 injustice given what we know about the underlying 00:06:32.959 --> 00:06:36.459 purpose of the contract. And so without getting 00:06:36.459 --> 00:06:39.800 too academic, Judge, and I don't want to ramble 00:06:39.800 --> 00:06:43.220 here, if there's to be a strict application of 00:06:43.220 --> 00:06:46.250 the integration clause, we believe it would be 00:06:46.250 --> 00:06:48.670 isolated to the numerosity issue and result in 00:06:48.670 --> 00:06:51.069 just a knockout of anything but what the LSA 00:06:51.069 --> 00:06:54.050 itself says. But otherwise, our default position 00:06:54.050 --> 00:06:57.930 is, in the interest of justice, consider everything 00:06:57.930 --> 00:07:01.829 relevant and material, and in no way could the 00:07:01.829 --> 00:07:05.209 reinstatement aspect of the loan be disregarded 00:07:05.209 --> 00:07:08.970 as that goes to the central purpose and genesis 00:07:08.970 --> 00:07:13.720 of the loan in question. And therefore, a manifest 00:07:13.720 --> 00:07:16.800 injustice would result that's contrary to the 00:07:16.800 --> 00:07:19.360 point of integration clauses in the first instance 00:07:19.360 --> 00:07:22.439 uphold integrity. And the other thing I would 00:07:22.439 --> 00:07:24.980 just accentuate, judges, and I know opposing 00:07:24.980 --> 00:07:26.439 counsel is excellent. They're going to make the 00:07:26.439 --> 00:07:28.699 best arguments for their client. We don't want 00:07:28.699 --> 00:07:32.319 anything to get lost in terms of the fact that, 00:07:32.319 --> 00:07:37.259 yes, a sophistication of ruling has been made 00:07:37.259 --> 00:07:41.370 against Mr. Van Tubergen. But he's still relatively 00:07:41.370 --> 00:07:45.110 speaking a common Joe and he was a customer and 00:07:45.110 --> 00:07:47.670 it's and and we believe that there's a lot of 00:07:47.670 --> 00:07:52.689 surrounding evidence as to Block five this is 00:07:52.689 --> 00:07:54.870 nothing to do with their bankruptcy professionals 00:07:54.870 --> 00:07:59.089 As as recently as when Ken and I got off the 00:07:59.089 --> 00:08:02.529 phone on Friday. He was still trying to extend 00:08:02.529 --> 00:08:06.680 you know accommodations, let's say, being gentlemen, 00:08:06.819 --> 00:08:09.079 this is no aspersions against their professionals, 00:08:09.139 --> 00:08:11.600 but the entity itself, we believe, was doing 00:08:11.600 --> 00:08:15.019 a lot of simply stated shady things. They're 00:08:15.019 --> 00:08:16.839 out there, they're in the public domain, your 00:08:16.839 --> 00:08:19.139 honor knows this entity, as well as virtually 00:08:19.139 --> 00:08:23.100 anybody, and we believe that all those surrounding 00:08:23.100 --> 00:08:26.279 circumstances, including their connection with 00:08:26.279 --> 00:08:29.600 other cryptocurrency giants, force them to be 00:08:29.600 --> 00:08:34.289 a little bit too eager to pull the lever. on 00:08:34.289 --> 00:08:37.190 loans of individuals like Mr. Van Tubergen. And 00:08:37.190 --> 00:08:41.210 so, again, being faced with rhetoric, if I may 00:08:41.210 --> 00:08:46.830 call it that, as to Mr. Van Tubergen being, you 00:08:46.830 --> 00:08:51.350 know, sophisticated or willing to engage in these 00:08:51.350 --> 00:08:53.669 high -risk loans, we don't want to forget the 00:08:53.669 --> 00:08:56.889 context that he still was an ordinary citizen. 00:08:57.629 --> 00:09:00.610 And we don't believe that what transpired is 00:09:00.610 --> 00:09:05.330 really his fault. And then also, as to the handbook, 00:09:05.490 --> 00:09:08.509 Judge, my client does fiercely believe that if 00:09:08.509 --> 00:09:14.309 that had been, you know, presented as part of 00:09:14.309 --> 00:09:17.129 the debtor's lending documents, as my client 00:09:17.129 --> 00:09:19.009 fiercely believes they should have, that would 00:09:19.009 --> 00:09:21.769 have colored this entire matter differently and 00:09:21.769 --> 00:09:24.470 may have resulted in a different result in the 00:09:24.470 --> 00:09:26.429 first instance. But we're not trying to re -argue. 00:09:26.850 --> 00:09:30.429 As we introduce it, Judge, we see as relevant... 00:09:31.319 --> 00:09:33.639 in connection with our proposed third finding, 00:09:33.919 --> 00:09:38.399 which is that there was consequential damage 00:09:38.399 --> 00:09:40.940 as a result of the missing ETH not being there. 00:09:41.980 --> 00:09:46.440 And so if Your Honor agrees that the additional 00:09:46.440 --> 00:09:49.639 ETH should have been there, then we have to recreate 00:09:49.639 --> 00:09:54.080 what follows. And as we showed previously before, 00:09:54.159 --> 00:09:55.799 Your Honor, in connection with the collateral 00:09:55.799 --> 00:10:00.159 loss breakdown chart, per our information, And 00:10:00.159 --> 00:10:03.259 I don't want to make today about the Gemini data. 00:10:03.320 --> 00:10:06.080 That's not what today's about, Judge. But using 00:10:06.080 --> 00:10:08.179 the Gemini data, we thought the one liquidation 00:10:08.179 --> 00:10:12.100 was not even authorized. And so now, whatever 00:10:12.100 --> 00:10:15.440 the sum that Your Honor rules should have been 00:10:15.440 --> 00:10:22.700 put in by BlockFi, that has a downstream effect. 00:10:23.179 --> 00:10:26.080 And we have to capture that. And in capturing 00:10:26.080 --> 00:10:28.559 that, Your Honor, we think we should look at 00:10:28.559 --> 00:10:31.960 it with fresh eyes utilizing this expanded record 00:10:31.960 --> 00:10:34.919 which includes the handbook and also includes 00:10:34.919 --> 00:10:37.960 some additional consideration of specifically 00:10:37.960 --> 00:10:41.600 the type of discretion that BlockFi was allowed 00:10:41.600 --> 00:10:44.799 to employ. Because most respectfully, Judge, 00:10:45.379 --> 00:10:49.179 as we read the court's findings as to discretion 00:10:49.179 --> 00:10:54.000 previously, to us it seemed almost as unbounded 00:10:54.000 --> 00:10:57.340 discretion. And so part of the additional material 00:10:57.340 --> 00:10:59.860 that was included in Mr. Van Tubergen's most 00:10:59.860 --> 00:11:02.980 recent certification and in the submission, it 00:11:02.980 --> 00:11:05.559 just meant to speak to this issue of it was not 00:11:05.559 --> 00:11:08.259 unbounded. And once we factor in that additional 00:11:08.259 --> 00:11:13.960 ETH should have been deposited, reinstated, then 00:11:13.960 --> 00:11:16.700 things would have looked even further different. 00:11:18.419 --> 00:11:27.789 And lastly, Your Honor, To me, the most consequential 00:11:27.789 --> 00:11:30.429 procedural aspect here is the district court 00:11:30.429 --> 00:11:34.330 surmising that it is indeed a reaffirmation transaction. 00:11:35.309 --> 00:11:39.889 To me, with that, we can then go back to Your 00:11:39.889 --> 00:11:44.009 Honor's initial finding that Mr. Van Tubergen's 00:11:44.009 --> 00:11:49.309 math, in terms of his assessment of the financial 00:11:49.309 --> 00:11:52.210 structure of the subject LSA, that it made sense. 00:11:52.409 --> 00:11:56.230 Well, if we connect those two, Judge, to me, 00:11:56.289 --> 00:11:59.789 I think that results in a finding in favor of 00:11:59.789 --> 00:12:04.470 Mr. Van Tuberge. So those are my points at this 00:12:04.470 --> 00:12:06.789 moment, Your Honor. All right. Before I turn 00:12:06.789 --> 00:12:12.169 to Mr. Ouellette, does counsel agree on the choice 00:12:12.169 --> 00:12:15.049 of law? In other words, what the court is being 00:12:15.049 --> 00:12:20.429 asked to do is interpret several agreements. 00:12:21.960 --> 00:12:26.759 Do we agree on which law applies, Delaware, New 00:12:26.759 --> 00:12:30.720 York, New Jersey? Let me turn to you, Mr. Magalhaes. 00:12:32.240 --> 00:12:36.700 What law am I applying? Well, I know in some 00:12:36.700 --> 00:12:45.799 respects it's Michigan law, Judge. My recollection 00:12:45.799 --> 00:12:48.559 in other block fine matters that we were applying 00:12:48.559 --> 00:12:58.210 Delaware law. as far as some of the account agreements. 00:12:59.690 --> 00:13:02.409 But before we leave the call, I want to get a 00:13:02.409 --> 00:13:05.450 sense on what, to the extent it makes a difference, 00:13:05.529 --> 00:13:09.070 that it may not make a difference as far as contract 00:13:09.070 --> 00:13:12.850 law interpretation. Judge, I don't mean to be 00:13:12.850 --> 00:13:16.289 coy. I'll obviously let Ken speak. On that, it 00:13:16.289 --> 00:13:20.230 may be too consequential an issue. And on that, 00:13:20.409 --> 00:13:22.909 I would potentially request supplemental briefing, 00:13:22.950 --> 00:13:25.539 but I don't want to get ahead of myself. All 00:13:25.539 --> 00:13:27.159 right. Well, let me hear from Mr. Ouellette. 00:13:27.379 --> 00:13:30.419 Thank you. Thank you, Council. Mr. Ouellette. 00:13:30.879 --> 00:13:35.220 Your Honor, the E -43 LSA, which I think is the 00:13:35.220 --> 00:13:39.659 key LSA, states that the laws of the state of 00:13:39.659 --> 00:13:42.980 residence of the borrower will govern, but the 00:13:42.980 --> 00:13:47.480 agreement will be governed by federal law. I 00:13:47.480 --> 00:13:53.220 don't dispute that Michigan law. So it is Michigan 00:13:53.220 --> 00:14:01.340 law. Yes All right, then mr. All that let me 00:14:01.340 --> 00:14:06.179 have you respond supplement your Reply in any 00:14:06.179 --> 00:14:09.460 fashion Sure. Thank you your honor Kenneth all 00:14:09.460 --> 00:14:11.200 that I thought for the plant administrator for 00:14:11.200 --> 00:14:15.399 the record Your honor our objection said that 00:14:15.399 --> 00:14:20.039 mr. Van Tuber had to pass and neither of them 00:14:20.039 --> 00:14:23.440 led to him winning and that he had to essentially 00:14:23.440 --> 00:14:27.320 pick one. In his response, he did pick one. And, 00:14:27.320 --> 00:14:31.899 you know, I went back and looked, and both Mr. 00:14:32.000 --> 00:14:34.940 Ventuberian's certification and his opposition 00:14:34.940 --> 00:14:39.320 are very clear that they are seeking to exclude 00:14:39.320 --> 00:14:43.720 the emails in their entirety. And I quote on 00:14:43.720 --> 00:14:48.840 paragraph 19, the subject LSA's integration clause, 00:14:48.919 --> 00:14:52.649 section 5A, for thereof should be given effect 00:14:52.649 --> 00:14:55.669 to preclude the introduction of outside materials, 00:14:55.970 --> 00:15:05.389 in this case, emails. So, look, I mean, the readings 00:15:05.389 --> 00:15:09.269 say what they say, and I think that Mr. Magaliz's 00:15:09.269 --> 00:15:14.210 comments are an acceptance that if the E43 LSA 00:15:14.210 --> 00:15:17.870 is the only document and the integration clause 00:15:17.870 --> 00:15:21.320 applies, there is nothing in there that gives 00:15:21.320 --> 00:15:24.720 Mr. Van Tubergen any entitlement. Section 5 of 00:15:24.720 --> 00:15:28.840 the LSA is very clear that it is from the borrower 00:15:28.840 --> 00:15:34.820 to deliver the collateral. There is no obligation 00:15:34.820 --> 00:15:39.659 in the LSA for BlockFi to deliver the collateral. 00:15:40.059 --> 00:15:44.179 There is no statement in the LSA saying that 00:15:44.179 --> 00:15:47.779 the collateral has been delivered. The LSA is 00:15:47.779 --> 00:15:50.019 drafted in such a way that it can be signed and 00:15:50.019 --> 00:15:53.000 then the collateral deposited. A buyer could, 00:15:53.000 --> 00:15:55.580 or a borrower could default by simply failing 00:15:55.580 --> 00:15:59.159 to deposit the necessary collateral. So under 00:15:59.159 --> 00:16:02.080 the LSA, giving effect to the integration clause, 00:16:02.759 --> 00:16:07.879 Mr. Van Tuberkin loses because the ETH was never 00:16:07.879 --> 00:16:11.840 posted. It doesn't even matter why the 4 ,230 00:16:11.840 --> 00:16:15.320 is there, because it's just not an obligation 00:16:15.320 --> 00:16:20.259 to block fine. I understand the comments to be 00:16:20.259 --> 00:16:23.539 that we are shifting back to looking at what 00:16:23.539 --> 00:16:29.360 I'm going to call the June emails. And here, 00:16:30.460 --> 00:16:33.919 look, you will hear from Mr. Maglies' comments 00:16:33.919 --> 00:16:36.139 and from the filings, it is clear that there 00:16:36.139 --> 00:16:39.379 is only one thing that they want this court to 00:16:39.379 --> 00:16:42.639 focus on, and that is the subject line of the 00:16:42.639 --> 00:16:45.720 email. Because the terms of the email are very, 00:16:45.720 --> 00:16:49.179 very clear on what... Block 5 is proposing. Remember, 00:16:49.320 --> 00:16:51.279 this court and the district court have already 00:16:51.279 --> 00:16:54.100 ruled that Mr. Van Tubergen's claims that the 00:16:54.100 --> 00:16:57.879 previous liquidations were wrongful are without 00:16:57.879 --> 00:17:02.820 merit. And I'm going to disregard a surprisingly 00:17:02.820 --> 00:17:06.319 large amount of leading that goes to that and 00:17:06.319 --> 00:17:10.359 simply focus on the issues here today. The agreement 00:17:10.359 --> 00:17:16.910 that Block 5 proposed was quite simply We will 00:17:16.910 --> 00:17:20.990 lend you the money to borrow the ETH that was 00:17:20.990 --> 00:17:23.849 liquidated. It was not an admission of guilt. 00:17:24.250 --> 00:17:26.170 It was not an admission that there was anything 00:17:26.170 --> 00:17:29.609 wrong with it, but that Mr. Van Tubergen really 00:17:29.609 --> 00:17:32.730 wanted to have that particular exposure, and 00:17:32.730 --> 00:17:36.890 BlockFi could provide what it called a one -time 00:17:36.890 --> 00:17:40.609 accommodation to give him that economic exposure, 00:17:40.690 --> 00:17:44.410 but it was very, very risky. and Block Fight 00:17:44.410 --> 00:17:48.289 goes into detail about why it's risky, because 00:17:48.289 --> 00:17:52.569 Mr. Van Tubergen is going to have a loan that 00:17:52.569 --> 00:17:55.750 when you apply how the structure works, which 00:17:55.750 --> 00:17:58.329 is nobody's giving Mr. Van Tubergen anything, 00:17:58.730 --> 00:18:01.710 he is borrowing the money to go out and buy that. 00:18:02.730 --> 00:18:05.950 And so the loan is going to be originated at 00:18:05.950 --> 00:18:08.900 a very risky level. close to liquidation. At 00:18:08.900 --> 00:18:11.299 the time that if the email was sent, it would 00:18:11.299 --> 00:18:15.680 have been 79 percent. I think we say in our response 00:18:15.680 --> 00:18:18.660 that as it was eventually originated, it was 00:18:18.660 --> 00:18:23.759 about 76 percent, both very risky. But let's 00:18:23.759 --> 00:18:27.819 go back to, you know, essentially the district 00:18:27.819 --> 00:18:31.480 court's view of the world, which was does Mr. 00:18:31.700 --> 00:18:34.829 Van Tubergen have a claim because the June email 00:18:34.829 --> 00:18:37.910 says that he is supposed to, that BlockFi is 00:18:37.910 --> 00:18:42.549 offering to purchase 1 ,584 ETH, but only purchased 00:18:42.549 --> 00:18:47.549 1 ,320 ETH. Does Mr. Van Tubergen have a claim 00:18:47.549 --> 00:18:52.690 for that missing 260 ETH? And the answer is no. 00:18:53.509 --> 00:18:56.630 Mr. Van Tubergen essentially admits that. But 00:18:56.630 --> 00:18:59.910 the reason is because nobody was offering to 00:18:59.910 --> 00:19:03.210 give Mr. Van Tubergen it. This was not a settlement. 00:19:03.579 --> 00:19:07.599 in the email where BlockFi was offering to pay 00:19:07.599 --> 00:19:11.599 Mr. Van Tubergen money to give him any sort of 00:19:11.599 --> 00:19:15.119 cryptocurrency. It was offering him a new loan 00:19:15.119 --> 00:19:19.740 product. And so had Mr. Van Tubergen borrowed 00:19:19.740 --> 00:19:24.940 the 1 ,584, he would have needed, had he bought 00:19:24.940 --> 00:19:27.319 that amount, he would have needed to borrow it. 00:19:27.579 --> 00:19:31.940 And in his certification on page 11, he admits 00:19:31.940 --> 00:19:36.759 this. He says, however, Only 1 ,320 ETH was purchased 00:19:36.759 --> 00:19:39.839 and only the purchase price of this amount was 00:19:39.839 --> 00:19:43.619 added to the loan balance. Had Block 5 purchased 00:19:43.619 --> 00:19:47.799 1 ,584 instead, his loan balance would have been 00:19:47.799 --> 00:19:50.799 higher. Because when you add the same amount 00:19:50.799 --> 00:19:53.920 to the loan in the collateral, the loan to value 00:19:53.920 --> 00:19:59.420 rises slightly. For example, if you borrow $1 00:19:59.420 --> 00:20:02.930 against $2 of collateral, and then you add a 00:20:02.930 --> 00:20:06.170 dollar, that's a loan to value of 50%. You add 00:20:06.170 --> 00:20:08.069 a dollar to the loan, you add a dollar to the 00:20:08.069 --> 00:20:10.789 collateral, you have two dollars of loans against 00:20:10.789 --> 00:20:16.009 three dollars of collateral or 67%. So at the 00:20:16.009 --> 00:20:19.230 end of the day, as we set forth in our opening 00:20:19.230 --> 00:20:24.170 argument and didn't reiterate in our reply because 00:20:24.170 --> 00:20:27.470 Mr. Van Tubergen pled the integration clause, 00:20:29.719 --> 00:20:33.380 Unfortunately, the agreement on when and how 00:20:33.380 --> 00:20:35.539 much to purchase does not appear to have been 00:20:35.539 --> 00:20:41.160 done by email. Mr. Van Tubergen does not testify 00:20:41.160 --> 00:20:44.720 in any credible way as to what happened, and 00:20:44.720 --> 00:20:48.940 we don't have a document to show you. But even 00:20:48.940 --> 00:20:52.140 if BlockFi was supposed to purchase more ETH, 00:20:52.200 --> 00:20:55.019 it was supposed to charge him more money. And 00:20:55.019 --> 00:21:01.529 so his damages under that theory are zero. I'm 00:21:01.529 --> 00:21:06.109 going to go finally to what I said about... Let 00:21:06.109 --> 00:21:12.589 me just stop you for a second. The June 29th 00:21:12.589 --> 00:21:16.190 email from Blockly, which was confirmed in the 00:21:16.190 --> 00:21:22.869 June 30th email, references the purchase of 1565 00:21:22.869 --> 00:21:26.250 -24, and that's where the district court looked, 00:21:26.750 --> 00:21:31.529 I think. That's where we come up with the 245th 00:21:31.529 --> 00:21:34.190 difference as opposed to 265. Where's the larger 00:21:34.190 --> 00:21:38.349 number, the 1584 number come from that you just 00:21:38.349 --> 00:21:43.809 referenced? I'm sorry. I meant the 1565. Okay. 00:21:45.029 --> 00:21:49.410 I got my numbers wrong. Apologies. I do see it 00:21:49.410 --> 00:21:53.890 in your reply. There's another reference in paragraph... 00:21:55.490 --> 00:21:59.509 Paragraph 69 for it, it says 1584. BlockFi originally 00:21:59.509 --> 00:22:02.950 offered to purchase 1584 ETH. Matt, we're talking 00:22:02.950 --> 00:22:06.789 about 20 or so ETH. I'm just curious to where, 00:22:06.950 --> 00:22:08.730 I was trying to find where those numbers were 00:22:08.730 --> 00:22:11.769 coming from. I didn't see it in the email. Mr. 00:22:11.930 --> 00:22:16.869 Van Tuber's smiling, he seems to know. I apologize, 00:22:16.950 --> 00:22:19.849 Your Honor, that is likely an error on my part. 00:22:20.269 --> 00:22:28.579 Okay. So, but the emails, Clearly say 1565 .2442. 00:22:29.220 --> 00:22:34.039 All right, let me continue by interrupting you. 00:22:34.900 --> 00:22:38.299 So what I said about Mr. Van Tubergen, Mr. Van 00:22:38.299 --> 00:22:43.559 Tubergen, his certification appears to argue 00:22:43.559 --> 00:22:48.019 that notwithstanding the June 29th and June 30th 00:22:48.019 --> 00:22:50.980 emails, that at some point between then and the 00:22:50.980 --> 00:22:54.950 LSA, Block 5 agreed that it would actually purchase 00:22:54.950 --> 00:23:00.130 enough to bring them up to $4 ,230. And that 00:23:00.130 --> 00:23:03.730 is just not credible. First of all, because that's 00:23:03.730 --> 00:23:07.930 not consistent with the structure of the deal 00:23:07.930 --> 00:23:09.950 laid out in the email. He would have had to borrow 00:23:09.950 --> 00:23:14.430 far, far more than he did in order for BlockFi 00:23:14.430 --> 00:23:16.849 to purchase that under this structure. So it 00:23:16.849 --> 00:23:19.650 would need to be BlockFi was giving him a very 00:23:19.650 --> 00:23:24.369 large amount of cryptocurrency. for free, essentially. 00:23:24.910 --> 00:23:29.509 And there, he consistently pleads that the entire 00:23:29.509 --> 00:23:32.210 reason for this was a quote unquote reinstatement 00:23:32.210 --> 00:23:36.109 transaction of what we refer to as the A5 LSA. 00:23:37.190 --> 00:23:44.609 And the A5 LSA is attached to his original objection 00:23:44.609 --> 00:23:49.009 or his original response as exhibit B. And if 00:23:49.009 --> 00:23:53.750 you look at that, the A5 loan has a collateral 00:23:53.750 --> 00:24:01.630 of 3 ,047. The record shows that he later pledged 00:24:01.630 --> 00:24:05.329 about a little over 500, I think less than 600 00:24:05.329 --> 00:24:08.390 ETH to try and meet the margin call on the A5 00:24:08.390 --> 00:24:12.670 loan, but was not in time. That's where you get 00:24:12.670 --> 00:24:18.589 the total of 3 ,580 ETH referred to in the June 00:24:18.589 --> 00:24:22.609 29th email. At no point did Mr. Van Tubergen 00:24:22.609 --> 00:24:29.410 ever have $4 ,230 on the system. To reinstate 00:24:29.410 --> 00:24:32.990 his loan, if BlockFi had actually said, you know 00:24:32.990 --> 00:24:36.410 what, we're wrong, we should give you your collateral 00:24:36.410 --> 00:24:41.690 back, $4 ,230 has nothing to do with that amount. 00:24:41.869 --> 00:24:46.250 And so Mr. Van Tubergen's testimony, did somebody 00:24:46.250 --> 00:24:49.579 agree to this? with no documentation whatsoever, 00:24:50.039 --> 00:24:54.339 is just not credible. So at the end of the day, 00:24:54.900 --> 00:24:57.680 there's only two paths. There's the path where 00:24:57.680 --> 00:25:01.420 the integration clause is enforced, and the E43 00:25:01.420 --> 00:25:04.660 loan says what it says, and what it says is that 00:25:04.660 --> 00:25:07.759 Mr. Van Tubergen is responsible for posting the 00:25:07.759 --> 00:25:12.880 collateral. He didn't post 4 ,230. He's not entitled 00:25:12.880 --> 00:25:15.809 to any collateral that he didn't post. BlockFi 00:25:15.809 --> 00:25:20.410 did choose to purchase and contribute that collateral 00:25:20.410 --> 00:25:24.589 and loan him the money to do so, but the ETH 00:25:24.589 --> 00:25:29.849 43 LSA has the standard clause that says if we 00:25:29.849 --> 00:25:32.130 choose to waive some of our rights under this 00:25:32.130 --> 00:25:35.029 agreement, that waiver is limited to what we 00:25:35.029 --> 00:25:39.089 actually did. Under the other path, we look to 00:25:39.089 --> 00:25:42.630 the actual email that Mr. McAveese today wants 00:25:42.630 --> 00:25:47.799 to focus on. as BlockFi's offer. And that's fine 00:25:47.799 --> 00:25:50.799 too. And there, as we laid out in our opening 00:25:50.799 --> 00:25:53.920 papers, it's very clear that he just does not 00:25:53.920 --> 00:25:57.359 have a claim. It would be great if we had the 00:25:57.359 --> 00:25:59.980 email where he confirmed that he wanted a lower 00:25:59.980 --> 00:26:04.880 amount, but the email on the 30th says that he 00:26:04.880 --> 00:26:07.319 will identify both a safe purchase price and 00:26:07.319 --> 00:26:11.180 a safe amount. And the structure of the loan, 00:26:11.720 --> 00:26:16.099 and Mr. Van Tubergen admits this, BlockFi borrowed 00:26:16.099 --> 00:26:20.420 or bought $1 ,320 and charged him for that amount. 00:26:20.839 --> 00:26:22.900 Had they bought more, they would have charged 00:26:22.900 --> 00:26:27.140 him for it. And so there is no damage, because 00:26:27.140 --> 00:26:29.500 the only effect would have been he would have 00:26:29.500 --> 00:26:31.940 hit that liquidation point just a little bit 00:26:31.940 --> 00:26:36.680 earlier. There's only a couple other points. 00:26:39.959 --> 00:26:44.339 Going to damages, Your Honor, as I expect you 00:26:44.339 --> 00:26:47.920 to expect, we don't believe that you need to 00:26:47.920 --> 00:26:52.720 go to damages, but should you, Section 502B is 00:26:52.720 --> 00:26:55.880 unambiguous. If Mr. Van Tubergen has a claim 00:26:55.880 --> 00:26:59.180 for missing E, it is valued as of the petition 00:26:59.180 --> 00:27:01.559 date, just like every other claimant in this 00:27:01.559 --> 00:27:06.299 bankruptcy. He attached the... quote the BIA 00:27:06.299 --> 00:27:09.359 claim form and said, well, I'm not a BIA creditor. 00:27:10.619 --> 00:27:13.380 The loan claim form has the same amount because 00:27:13.380 --> 00:27:16.259 it's not about the type of claim. It's about, 00:27:16.680 --> 00:27:19.299 are you an unsecured creditor? He is an unsecured 00:27:19.299 --> 00:27:22.299 creditor. Any claim would be valued at the petition 00:27:22.299 --> 00:27:27.400 date by section 502B. The consequential damages 00:27:27.400 --> 00:27:31.880 are Look, frankly, his theory on this is incomprehensible. 00:27:32.400 --> 00:27:35.440 It appears to be that he pleads every single 00:27:35.440 --> 00:27:40.079 liquidation after this point is the damages from 00:27:40.079 --> 00:27:45.000 this loan. But, number one, he's already lost 00:27:45.000 --> 00:27:49.079 on all of those. His argument that all of those 00:27:49.079 --> 00:27:52.259 are improper. Number two, there's not a claim 00:27:52.259 --> 00:27:57.059 for that in the claim form. And number three, 00:27:57.279 --> 00:28:02.170 well... You know, he explicitly waives that in 00:28:02.170 --> 00:28:07.369 the June 29th email where he agrees Block 5 should 00:28:07.369 --> 00:28:10.009 not be liable for any damages or any loss caused 00:28:10.009 --> 00:28:17.529 as a result of this transaction. You know, at 00:28:17.529 --> 00:28:21.009 the end of the day, Mr. Van Tuberin had one discreet 00:28:21.009 --> 00:28:23.190 issue remanded back from the district court. 00:28:23.410 --> 00:28:26.509 He filed a claim for $10 million on a whole panoply 00:28:26.509 --> 00:28:30.019 of claims. He's gotten one chance to recreate 00:28:30.019 --> 00:28:33.140 this issue, which has a maximum value of about 00:28:33.140 --> 00:28:36.559 $1 million and $44 ,000. He's tried to make that 00:28:36.559 --> 00:28:42.500 into $7 .5 million, which is spending, again, 00:28:42.680 --> 00:28:45.099 half of his pleading, relitigating the issues 00:28:45.099 --> 00:28:50.740 that he already lost. Last, there is a sort of 00:28:50.740 --> 00:28:54.160 throwaway request for a reserve to be set. I 00:28:54.160 --> 00:28:57.789 think this is just not proper at this time. Once 00:28:57.789 --> 00:29:03.109 the court issues a ruling on this, if a reserve 00:29:03.109 --> 00:29:05.890 would be appropriate, Mr. Magley's can file a 00:29:05.890 --> 00:29:09.430 motion either seeking a stay of the order or 00:29:09.430 --> 00:29:13.650 seeking a reserve to be set. He doesn't provide 00:29:13.650 --> 00:29:17.450 a dollar amount or basis for the reserve. There's 00:29:17.450 --> 00:29:20.170 nothing really the wind down debtors can respond 00:29:20.170 --> 00:29:24.930 to on that point. All right. I have a quick question 00:29:24.930 --> 00:29:34.690 or two. So I'm looking at E43, the LSA, and nobody 00:29:34.690 --> 00:29:37.250 seems to contest that the amount of the loan, 00:29:37.650 --> 00:29:47.390 the restructured loan, is $5 ,982 ,830 .21. And 00:29:47.390 --> 00:29:51.089 my understanding is that that's comprised of 00:29:51.089 --> 00:29:54.809 the balance that was owed at the time. of $2 00:29:54.809 --> 00:30:06.210 ,759 ,717, and then new credit of $3 ,169 ,112, 00:30:07.410 --> 00:30:10.670 which, and I'll ask Mr. O 'Leary if you'd confirm, 00:30:11.230 --> 00:30:17.309 to me seems to be $1 ,320 at roughly $2 ,400 00:30:17.309 --> 00:30:25.609 per ETH. My question is, What was the basis for 00:30:25.609 --> 00:30:33.029 BlockFi to extend the $3 ,169 ,112? How was that 00:30:33.029 --> 00:30:36.049 number reached? Was there an agreement to buy 00:30:36.049 --> 00:30:39.990 a certain amount of ETH? And then whatever that 00:30:39.990 --> 00:30:44.410 is, that's going to be the new loan? Or was there 00:30:44.410 --> 00:30:47.569 an agreement on the loan amount and we'll purchase 00:30:47.569 --> 00:30:51.440 as much ETH until we hit that loan amount? the 00:30:51.440 --> 00:30:56.059 new additional amount. In other words, is there 00:30:56.059 --> 00:30:57.859 anything in the record or anything you can point 00:30:57.859 --> 00:31:04.079 to that tells me how the 3 ,169 ,000 figure was 00:31:04.079 --> 00:31:10.619 reached? Because obviously, in that same document, 00:31:11.640 --> 00:31:20.200 there's 4 ,230 .12 of ETH as collateral. and 00:31:20.200 --> 00:31:24.400 speaks to a loan -to -value ratio of 60%. Now, 00:31:25.440 --> 00:31:34.039 granted, the June emails did not speak to 60 00:31:34.039 --> 00:31:38.140 % loan -to -value traditional. It spoke to a 00:31:38.140 --> 00:31:41.700 riskier loan, which would suggest that there 00:31:41.700 --> 00:31:48.950 would not be as much ETH as the 4 ,230. Trying 00:31:48.950 --> 00:31:52.549 to get a sense of was it the horse before the 00:31:52.549 --> 00:31:55.430 cart or the cart before the horse? How was that 00:31:55.430 --> 00:32:00.490 $3 ,169 ,000 number added to the prior balance 00:32:00.490 --> 00:32:03.410 reached? Was that a customer request or a block 00:32:03.410 --> 00:32:11.549 by dictate? I know Mr. Magaliz wants to raise 00:32:11.549 --> 00:32:15.990 his hand, but I turn to you first. So your honor, 00:32:16.589 --> 00:32:20.740 unfortunately, We don't know. Because as I said, 00:32:21.619 --> 00:32:25.400 the June email is the only thing we have in writing. 00:32:26.299 --> 00:32:29.380 And we have Mr. Van Tubrian's testimony that 00:32:29.380 --> 00:32:34.299 doesn't match either of the options. So we're 00:32:34.299 --> 00:32:37.339 trying to be forthright that we don't know if 00:32:37.339 --> 00:32:40.579 why the amount differs from what's set forth 00:32:40.579 --> 00:32:44.380 in the email, if there was a decision to cap 00:32:44.380 --> 00:32:50.049 the amount or cap the... However, what we'd submit 00:32:50.049 --> 00:32:54.190 is that it's very clear how you get to the amount 00:32:54.190 --> 00:32:58.130 that's being added. One way or another, Mr. Van 00:32:58.130 --> 00:33:00.789 Tubergen is borrowing all the money to pay for 00:33:00.789 --> 00:33:05.450 the new ETH. But I'm correct that $3 ,169 ,000 00:33:05.450 --> 00:33:11.170 figure reflects the cost to BlockFi in acquiring 00:33:11.170 --> 00:33:15.869 the $1 ,320 ,000 ETH. Yes, Your Honor. Okay. 00:33:16.190 --> 00:33:21.539 Mr. Magolese? You're not on, your speaker's not 00:33:21.539 --> 00:33:24.859 on. So, Your Honor's already seen our mathematical 00:33:24.859 --> 00:33:26.619 computations, you saw it the first time, you're 00:33:26.619 --> 00:33:28.880 seeing it again. Judge, I have to rely on that 00:33:28.880 --> 00:33:31.740 the same way I would if I retained an accountant 00:33:31.740 --> 00:33:34.460 and they did it, right? I know my client knows 00:33:34.460 --> 00:33:36.779 these numbers better than anyone, but I was actually 00:33:36.779 --> 00:33:40.359 going to say, and I don't want to violate the 00:33:40.359 --> 00:33:43.740 rules of order here, but when Becca asked us 00:33:43.740 --> 00:33:46.900 if we had, you know, testimony to offer, I said, 00:33:47.019 --> 00:33:49.710 well, Mr. Van Tuebergen will make himself available 00:33:49.710 --> 00:33:52.730 and I think this could be an opportunity for 00:33:52.730 --> 00:33:55.950 the court to ask the question to my client because 00:33:55.950 --> 00:33:57.930 I have a sense that he's going to give the court 00:33:57.930 --> 00:34:01.210 a very clear answer. Your Honor, I'd say that 00:34:01.210 --> 00:34:03.589 he already testified and that it's on page 11 00:34:03.589 --> 00:34:07.509 of his certification that he says however only 00:34:07.509 --> 00:34:10.489 1 ,320 ETH was purchased and only the purchase 00:34:10.489 --> 00:34:12.809 price of this amount was added to the loan balance. 00:34:13.150 --> 00:34:15.110 I don't think we need further testimony from 00:34:15.110 --> 00:34:18.909 him on that point. I'm not going to have, respectfully, 00:34:19.130 --> 00:34:23.570 any more testimony. I don't want to open that 00:34:23.570 --> 00:34:26.349 door. I've lived with you all. We have mediations. 00:34:27.889 --> 00:34:30.849 I'm just doing the best to confirm what the record 00:34:30.849 --> 00:34:33.710 reflects. So to that, Judge, again, and to that, 00:34:33.829 --> 00:34:37.289 I would just respectfully respond by saying that 00:34:37.289 --> 00:34:40.860 I think the... the numbers are truer than any 00:34:40.860 --> 00:34:43.300 words Mr. Van Tubergen could offer. So to the 00:34:43.300 --> 00:34:46.440 extent that those words, that he did trip over 00:34:46.440 --> 00:34:49.679 those words, then we would still rely on the 00:34:49.679 --> 00:34:52.260 mathematical computations, coupled with his testimony 00:34:52.260 --> 00:34:56.139 that there were phone calls after the emails, 00:34:56.400 --> 00:35:00.639 up until the date that the LSA was signed. And 00:35:00.639 --> 00:35:04.019 I know, rightfully so, the court's drilling down 00:35:04.019 --> 00:35:06.840 on the numbers, and I appreciate that. But when 00:35:06.840 --> 00:35:09.900 you step back, Judge, Remember, the first ruling 00:35:09.900 --> 00:35:13.099 came down on Scrivener's error. It's becoming 00:35:13.099 --> 00:35:17.659 increasingly clear that so much focus was on 00:35:17.659 --> 00:35:21.639 the collateral amount. And that belies the notion 00:35:21.639 --> 00:35:23.079 that it could have been Scrivener's error. There 00:35:23.079 --> 00:35:26.440 was a huge spotlight on this. To us, common sense 00:35:26.440 --> 00:35:30.280 dictates that by the time the LSA was ready to 00:35:30.280 --> 00:35:33.780 sign, the parties were aware what type of transaction 00:35:33.780 --> 00:35:36.280 it was, a reinstatement transaction. and they 00:35:36.280 --> 00:35:38.219 would have known to scrutinize the amount of 00:35:38.219 --> 00:35:42.119 collateral. And so, you know, it just, anyway. 00:35:42.699 --> 00:35:44.940 So, all right, thank you. Mr. O 'Lan, I want 00:35:44.940 --> 00:35:48.320 to go back to you with a question. Let's accept 00:35:48.320 --> 00:35:52.280 that the LSA is what it says, and it was sent 00:35:52.280 --> 00:36:00.880 to Mr. Van Tubergen, and he sees that he's now 00:36:00.880 --> 00:36:06.989 responsible to pay $5 ,920 ,000 $8 ,830 .21. 00:36:07.889 --> 00:36:12.170 And he sees a loan -to -value ratio of 60%, I 00:36:12.170 --> 00:36:15.130 believe, and he sees that there's collateral, 00:36:15.670 --> 00:36:20.170 even if he didn't put it all up, of $42 .30 .12 00:36:20.170 --> 00:36:26.329 in ETH. He would not, just looking at that document, 00:36:26.690 --> 00:36:31.789 expect there to be any liquidation, any default 00:36:31.789 --> 00:36:35.699 or forced liquidation. until it dropped below 00:36:35.699 --> 00:36:42.699 the 60%, correct? So what unfolded from July 00:36:42.699 --> 00:36:46.400 7th on, the date of the execution of the LSA? 00:36:48.519 --> 00:36:52.019 What opportunities was there for Mr. Van Tubergen 00:36:52.019 --> 00:37:01.840 to say, wait a minute, there's 4230 there, or? 00:37:02.059 --> 00:37:05.400 for Block Fight to say there's not 4230 there. 00:37:06.380 --> 00:37:09.639 So first, your honor, I would push back a little 00:37:09.639 --> 00:37:12.280 on the premise of the question. The LSA does 00:37:12.280 --> 00:37:16.440 not say that 4230 has been. No, it says it's 00:37:16.440 --> 00:37:20.739 to be pledged. Right. I understand. So Mr. Van 00:37:20.739 --> 00:37:24.840 Tubergen got margin calls on this loan, which 00:37:24.840 --> 00:37:27.380 would have laid out. And I believe they're in 00:37:27.380 --> 00:37:31.530 the record. Unfortunately, look, this is the 00:37:31.530 --> 00:37:33.670 previous record, so I'm not exactly sure what 00:37:33.670 --> 00:37:37.489 they are, but it would have gotten the calculation 00:37:37.489 --> 00:37:43.090 of the margin called, you know, you owe 5 .9 00:37:43.090 --> 00:37:46.909 million, you have X amount of collateral, it's 00:37:46.909 --> 00:37:50.969 valued at X, you have 72 hours, because I believe 00:37:50.969 --> 00:37:58.769 in this, the initial threshold was 80, that you 00:37:58.769 --> 00:38:08.110 have... Actually, I'll also point, go back to 00:38:08.110 --> 00:38:12.469 one thing. It says that he's got to keep a low 00:38:12.469 --> 00:38:15.789 end of value ratio less than or equal to 80%. 00:38:15.789 --> 00:38:21.610 That's on page five. The 60 % number is in there 00:38:21.610 --> 00:38:30.389 as sort of the, what he has to bring it to when 00:38:30.460 --> 00:38:35.880 the margin call is hit. But it's when he hits 00:38:35.880 --> 00:38:40.780 80%, he gets a margin call. He got 72 hours to 00:38:40.780 --> 00:38:44.719 get the loan to value ratio into the proper amount. 00:38:44.760 --> 00:38:48.960 And that would have information on how much margin 00:38:48.960 --> 00:38:52.739 you have. He could have disputed it at that point 00:38:52.739 --> 00:38:57.039 saying, hey, I have more collateral there than 00:38:57.039 --> 00:39:01.650 you than you show here. I don't think that any 00:39:01.650 --> 00:39:04.530 evidence to that has been put into the record. 00:39:04.650 --> 00:39:07.710 Mr. Ventuber has not testified that he called 00:39:07.710 --> 00:39:09.610 a BlockFi and said, what are you talking about? 00:39:09.989 --> 00:39:13.130 There's another almost 900. There's no emails 00:39:13.130 --> 00:39:16.050 that I've seen to that effect. Let me just ask. 00:39:16.130 --> 00:39:18.889 When BlockFi issued the first margin call because 00:39:18.889 --> 00:39:22.570 it fell below the 80%, did it do so on the basis 00:39:22.570 --> 00:39:32.500 of the collateral being the 4200 number? Or the 00:39:32.500 --> 00:39:37.539 3334 number pledged? The 3334 number pledged. 00:39:37.880 --> 00:39:39.940 Because remember, Your Honor, the amount of collateral 00:39:39.940 --> 00:39:43.559 can vary over the time of the loan. Most often 00:39:43.559 --> 00:39:46.900 when additional collateral has been posted. How 00:39:46.900 --> 00:39:51.300 would the customer here, Mr. Van Tubergen, have 00:39:51.300 --> 00:39:54.699 known that it was being based on that figure 00:39:54.699 --> 00:40:00.880 and not what was in the LSA? I'd have to go back 00:40:00.880 --> 00:40:04.679 to see if the actual emails were in the record 00:40:04.679 --> 00:40:08.460 and take a look. But it's, as Mr. Van Turbin 00:40:08.460 --> 00:40:11.019 said, it's a mathematical calculation. He could 00:40:11.019 --> 00:40:13.940 go, you know, the price of ETH on any particular 00:40:13.940 --> 00:40:16.840 day is a Google search away. He could have done 00:40:16.840 --> 00:40:19.579 a Google search and seen this doesn't make sense, 00:40:20.139 --> 00:40:24.719 even if the margin call email didn't have sufficient 00:40:24.719 --> 00:40:28.539 information for him to... look at it and immediately 00:40:28.539 --> 00:40:35.420 see BlockFi sees only 3 ,300 E, not 4 ,200 E. 00:40:37.019 --> 00:40:41.260 All right. I don't have any further questions. 00:40:42.739 --> 00:40:44.659 Mr. Ouellette, I'll give you anything else you 00:40:44.659 --> 00:40:49.260 wish to add. No, Your Honor. Mr. Magolese, anything 00:40:49.260 --> 00:40:51.960 you wish to add? I know you've read the papers, 00:40:52.159 --> 00:40:53.739 Judge, and you gave me an opportunity to do so 00:40:53.739 --> 00:40:56.769 reply, which I appreciate. All right. Then I'm 00:40:56.769 --> 00:41:00.610 going to take the matter under reserve. And I 00:41:00.610 --> 00:41:04.289 will issue a written opinion, hopefully at some 00:41:04.289 --> 00:41:09.050 point in the near future. All right? I'm curious, 00:41:09.210 --> 00:41:12.570 what's pending in the district court? Is the 00:41:12.570 --> 00:41:15.510 motion for reconsideration still pending? Yes, 00:41:15.570 --> 00:41:19.449 Your Honor. Have you had an oral argument? No, 00:41:19.469 --> 00:41:22.170 Your Honor. The wind down debtors have not been 00:41:22.170 --> 00:41:25.199 asked to respond, Your Honor. we're not able 00:41:25.199 --> 00:41:28.559 to respond unless asked. All right, so that's 00:41:28.559 --> 00:41:30.820 not coming down the next day or so, so I'm just 00:41:30.820 --> 00:41:35.400 trying to get a sense of what's out there. All 00:41:35.400 --> 00:41:37.099 right, I thank you all for your time and for 00:41:37.099 --> 00:41:38.559 your submissions. Take care.