                               In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________


Nos. 13-3847, 14-2214, 14-2215, 14-3533


UNITED STATES OF AMERICA,
                               Plaintiff-Appellee / Cross-Appellant,

                                 v.

MICHAEL SEGAL,
                            Defendant-Appellant / Cross-Appellee.
                    ____________________

        Appeals from the United States District Court for the
          Northern District of Illinois, Eastern Division.
          No. 02 CR 112-1 — Rubén Castillo, Chief Judge.
                    ____________________

   ARGUED OCTOBER 30, 2015 — DECIDED JANUARY 21, 2016
                ____________________

   Before POSNER, RIPPLE, and HAMILTON, Circuit Judges.
   POSNER, Circuit Judge. Some years ago Michael Segal—
lawyer, certified public accountant, insurance broker—was
indicted along with Near North Insurance Brokerage
(NNIB), a company he owned, for multiple violations of fed-
eral law. He was charged with racketeering, mail and wire
fraud, making false statements, embezzlement, and conspir-
2                      Nos. 13-3847, 14-2214, 14-2215, 14-3533


ing to interfere with operations of the Internal Revenue Ser-
vice. NNIB was charged with mail fraud, making false
statements, and embezzlement. Both defendants were con-
victed in 2004, and the following year Segal was sentenced
to 121 months in prison. United States v. Segal, 495 F.3d 826,
830 (7th Cir. 2007). After further proceedings, see 644 F.3d
364 (7th Cir. 2011), he was resentenced to time served and
ordered to pay $842,000 in restitution and to forfeit to the
government his interest in the company and $15 million.
    To resolve a series of disputes that arose over the forfei-
ture judgment and had not been resolved either by the dis-
trict court or in either of the decisions (cited above) by this
court, the parties in 2013 agreed to a binding settlement that
specified the final ownership and disposition of certain of
Segal’s assets. Segal, by then released from prison, partici-
pated actively, indeed aggressively, in the negotiation of the
settlement. But after the district judge approved the settle-
ment the parties clashed over three issues concerning the
disposition of Segal’s assets and returned to the district court
for a resolution of those issues. The judge resolved two of
them against Segal and the third in his favor, giving rise to
three appeals—two by Segal, one by the government—that
we have consolidated for briefing, argument, and decision.
(They were separate appeals, rather than a single appeal, be-
cause the orders giving rise to them had been issued by the
district court at different times.) The fourth appeal, No. 14-
2215, related to a writ of mandamus filed by Segal that he
has now abandoned; we ignore it.
    The first of Segal’s two appeals relates to insurance poli-
cies on his life. The settlement agreement gave him two of
the eight policies outright and an option to purchase all or
Nos. 13-3847, 14-2214, 14-2215, 14-3533                        3


some of the others, but required that he exercise the option
within six months of the district court’s approval of the set-
tlement; otherwise the option would be forfeited. He opted
to purchase one of the remaining six policies before the
deadline and asked the court to extend the deadline for the
others. He said he needed time to raise money to buy them
because the government hadn’t promptly released money
owed to him. He also complained that the government had
delayed his efforts to obtain information from the insurance
companies.
    The judge refused to extend the deadline, pointing out
that paragraph 9(e) of the settlement agreement “sets up a
very precise timeframe that doesn’t condition [the deadline
for exercising the right to purchase the insurance policies] on
the release of other moneys.” The paragraph gives Segal
      a right to exercise an option to purchase all remain-
      ing insurance policies held by Near North Insur-
      ance Brokerage as listed on Exhibit A at the cash
      surrender value computed when, and if, the option
      is exercised. The option to purchase these insurance
      policies must be exercised no later than six months
      from the date the Settlement Stipulation is ap-
      proved by this Court. Segal shall exercise this op-
      tion by sending a letter to the United States Attor-
      ney for the Northern District of Illinois, to the at-
      tention of the undersigned Assistant United States
      Attorney, which identifies the policy or policies he
      intends to purchase. Within thirty days of receipt of
      the letter, the cash surrender values of the policy or
      policies shall be provided to Michael Segal. Fifteen
      days after receipt of the cash surrender infor-
      mation, defendant Segal shall pay good funds for
      the purchase of the policy or policies. If the option
4                      Nos. 13-3847, 14-2214, 14-2215, 14-3533


      is not exercised or the funds are not received as re-
      quired, the government shall liquidate the policy or
      policies.
The method of exercising the option was thus clearly stated:
the dispatch of a letter to the prosecuting assistant U.S. At-
torney within six months of the court’s approval of the set-
tlement. If the letter was dispatched by the deadline, Segal
would have up to 45 days to pay for the policies, depending
on when the government told him what their cash surrender
values were.
    He argues that it was unreasonable to expect him to raise
the money before the six-month deadline. Maybe so; but that
was not the deadline for raising the funds—it was the dead-
line for notifying the government that he was exercising the
option. He would have had an additional 15 days at least,
and 45 at most, after the six-month deadline to raise the
money, but only if he exercised the option before the dead-
line.
    He argues that the government withheld from him both
information that he needed in order to determine the value
of the policies that he was considering trying to buy and also
cash that the government was obligated to return to him af-
ter he satisfied the forfeiture judgment. These arguments
have no merit. The government helped Segal obtain infor-
mation about the policies (namely their cash surrender val-
ues) prior to the option deadline by writing the insurance
companies. Although one of the companies was slow to
supply the information, that was not the government’s fault.
In any event paragraph 9(e) required only that the govern-
ment inform Segal of the cash surrender values of the poli-
cies after he had exercised his option to purchase them.
Nos. 13-3847, 14-2214, 14-2215, 14-3533                      5


   As for his annoyance that the government failed to
promptly release funds to which he was entitled—funds he
might have used to buy the policies—the option to buy them
was not conditioned on the government’s release of other
assets to him. Nor was the government the only potential
source of money with which to buy the policies. They had
value and so a bank might have been willing to lend money
against them. The loan would have enabled Segal to buy the
policies and repay the loan once the government released
the funds owed him.
    He had only himself to blame for much of the delay in
the government’s release of funds to him. For example, the
settlement agreement required him to transfer to the gov-
ernment his ownership interest valued at $750,000 in Sheri-
dan House Associates, a real estate limited partnership. He
refused on the ground that he’d conveyed half his owner-
ship interest to his former wife back in 2003. But she had ex-
ecuted a release of her interest in all assets that the govern-
ment had restrained, thus clearing away any obstacle to the
transfer of the entire ownership interest to the government.
Paragraph 11 of the settlement agreement states that if any
property that was to be transferred to the government “is
not available to satisfy the forfeiture judgment because it has
been otherwise transferred, encumbered or alienated, indi-
rectly or directly by defendant Segal, he shall owe the Unit-
ed States the appraised value of the asset.”
    Had Segal transferred the ownership interests promptly,
he would have received $750,000 that he could have invested
in the purchase of the insurance policies. But he refused to
execute a release of his interest. Six months of litigation en-
sued, in which the ex-wife intervened seeking a share of the
6                        Nos. 13-3847, 14-2214, 14-2215, 14-3533


ownership interest. The dispute was finally resolved when
the district judge ordered that the entire interest be trans-
ferred and that the government release the $750,000 to Segal.
But by then the deadline for the exercise of the option to buy
the insurance policies had expired; the fault was Segal’s and
his ex-wife’s.
    Segal’s second objection to the administration of the set-
tlement agreement relates to the Chicago Bulls basketball
team. As part of the settlement, the government retained half
of Segal’s ownership interest in the Bulls, an interest consist-
ing of a 1.7 percent limited partnership interest in the Chica-
go Bulls basketball franchise, a 1.1 percent interest in its sta-
dium (the United Center), and a 1.1 percent interest in its
broadcasting company (Bulls Media)—for simplicity we’ll
call the entire package the Bulls investment, the value of
which the government estimated at $4.175 million. The set-
tlement agreement gave a half interest back to Segal plus a
right of first refusal of any offer made to the government for
its half interest—but with conditions, as explained in para-
graph 9(f) of the settlement agreement:
       Defendant Michael Segal shall retain the right of
       first refusal on a commercially reasonable, respon-
       sible cash offer made to the United States for the
       purchase of the government’s ownership interest
       within six months of the approval of the Settlement
       Stipulation. Within seven days of receipt of an ac-
       ceptable offer, the United States shall notify Mi-
       chael Segal of the offer. To exercise his right of first
       refusal to purchase the interest of the United States,
       Michael Segal must notify the United States Attor-
       ney for the Northern District of Illinois, within sev-
       en days of receiving said notice from the United
Nos. 13-3847, 14-2214, 14-2215, 14-3533                        7


       States[,] of his intent to purchase the government’s
       interest in the partnership at the cash offer re-
       ceived, and within ten days of serving notice shall
       provide good funds in that amount for the pur-
       chase of the government’s interest. If no acceptable
       offer is received by the United States within six
       months from the date the Settlement Stipulation is
       approved by this Court, defendant Segal shall have
       the option to purchase the government’s partner-
       ship interests with good funds at the appraised
       value set forth on Exhibit A within thirty days after
       the expiration of the six month period. No later
       than seven days prior to the expiration of the six
       month option period, defendant Segal shall notify
       the government of his intention to purchase the
       partnership interest, and shall provide good funds
       for the purchase of the government’s interest in the
       partnership interest within ten days of the date of
       the notification.
The key sentence is the first: the grant to Segal of a “right of
first refusal on a commercially reasonable, responsible cash
offer made to the United States for the purchase of the gov-
ernment’s ownership interest within six months of the ap-
proval of the [settlement].”
    Within the six-month period the government received a
$2.9 million offer for the Bulls investment from Peter Huiz-
enga, a lawyer and wealthy investor who had been a found-
er of Waste Management Company. Segal didn’t match
Huizenga’s offer, so he didn’t get to repossess the other half
of his original investment in the Bulls. He contends that the
offer the government received from Huizenga was not a
“commercially reasonable, responsible cash offer … [to] pur-
chase” because it allowed the offeror to withdraw his offer
8                      Nos. 13-3847, 14-2214, 14-2215, 14-3533


for any reason after the completion of due diligence. The
government argued, and the district judge ruled, that the of-
fer was commercially reasonable; but neither the district
judge, nor the government either in the district court or in
our court, gave more than perfunctory consideration to the
issue of reasonableness.
    A contract is a commitment, which if violated gives rise
to a right to sue. An unconditional offer becomes a contract
as soon as it’s accepted. Many offers, however, are condi-
tional. One might for example make an offer to buy a house
conditional on being able to obtain a mortgage for a certain
duration at a certain interest rate, to have the house inspect-
ed for termites, to inspect for liens, to have the sturdiness of
the construction checked, and so forth. That offer, with all its
conditions, would if made in good faith nevertheless be
“commercially reasonable,” as the offeree would understand
that he’d have a deal were the conditions fulfilled. Huiz-
enga’s offer, however, did not have a finite number of condi-
tions; it preserved his “sole and absolute discretion” to
withdraw the offer for any reason.
    Segal hints that in requiring that the offer be “accepta-
ble,” paragraph 9(f) of the settlement agreement required
that the offer had to be capable of being accepted by the
government, thus forming a contract. But the natural mean-
ing of “acceptable” in this context is that the offer, since it
did not bind the offeror, would have to be an acceptable ba-
sis for negotiations—for example by specifying a reasonable
price that the government would have to consider as the
parties began to negotiate the terms of the contract. Huiz-
enga’s offer was acceptable in that limited sense even though
Nos. 13-3847, 14-2214, 14-2215, 14-3533                        9


it did not commit him to purchase the investment in the
Bulls.
    What casts the offer’s commercial reasonableness into se-
rious question begins with the fact that the Bulls are private-
ly owned and that before the purchase could be completed a
prospective purchaser of an investment in the Bulls (the of-
feror, in other words—Huizenga) would need both to dig for
information about the franchise and to obtain the approval
of both Jerry Reinsdorf (the Bulls’ majority owner and man-
aging partner) and the National Basketball Association, to
become a partner in the Bulls enterprise (which Huizenga
wanted to become). The government had only six months
after the approval of the settlement agreement within which
to obtain a commercially reasonable offer. Huizenga could
have made his offer conditional on receiving the approvals
he wanted rather than reserving the right to withdraw the
offer for any (or for that matter for no) reason. Such an offer
would have been commercially reasonable. But he refused to
commit himself.
    When the offer was made, the government sent a copy to
Reinsdorf, and that kicked off negotiations with Huizenga.
But after extensive negotiations involving the NBA,
Reinsdorf decided not to allow Huizenga, despite the in-
vestment in the Bulls that he would be making, to become a
full partner. As a result, Huizenga withdrew his offer.
    As we said in Architectural Metal Systems, Inc. v. Consoli-
dated Systems, Inc., 58 F.3d 1227, 1229 (7th Cir. 1995), “the re-
cipient of a hopelessly vague offer should know that it was
not intended to be an offer that could be made legally en-
forceable by being accepted.” That doesn’t make such an of-
fer commercially unreasonable; our home-buying example
10                     Nos. 13-3847, 14-2214, 14-2215, 14-3533


shows that contingent offers can be commercially reasona-
ble. The problem in this case is the impact of Huizenga’s
highly tentative offer on Segal’s legitimate interests. Accord-
ing to the government and the district judge, to repossess his
original half-interest in his Bulls investment pursuant to
paragraph 9(f) of the settlement agreement Segal had to
meet Huizenga’s offer without knowing whether it was real-
istic. Huizenga was offering $2.9 million for an investment
that had been appraised at only $2.09 million, and Segal ar-
gues that because Huizenga’s offer had been withdrawn he
(that is, Segal) should have been allowed to purchase the in-
vestment at the appraised value. For he had notified the
government of his intent to purchase it before the govern-
ment had received Huizenga’s offer and more than seven
days before the expiration of the six-month option granted
Segal by the settlement.
    True, Segal could purchase the investment at the ap-
praised value only if no acceptable offer had been received
by the government within six months, and Huizenga’s offer
made the deadline. But what was acceptable to the govern-
ment could be unreasonable because of the impact on anoth-
er party, namely Segal. Because Huizenga’s offer was not
binding and might therefore have been inflated—intended
as a gambit for opening negotiations and in any event de-
pendent on what his review of the Bulls’ financial infor-
mation might reveal—Segal could have no confidence that
$2.9 million was a realistic valuation; if it was excessive, then
by exercising his right of first refusal Segal would have
found himself having overpaid for the investment. The form
of Huizenga’s offer forced Segal, the holder of the right of
first refusal, to choose between paying what might be way
too much and giving up his right of first refusal. He had no
Nos. 13-3847, 14-2214, 14-2215, 14-3533                      11


firm ground on which to stand, given that Huizenga was
free at any time to renege on his offer, as it was “intended as
a statement of the intent of the parties and is not intended to
be binding on any party. Any binding agreement with re-
spect to this matter is subject to the negotiation of a mutually
acceptable Definitive Agreement as set forth herein.” Segal
may also have reasonably interpreted paragraph 9(f) of the
settlement agreement to conform to the usual practice, in the
sale of professional sports teams, of prospective buyer and
prospective seller to make a binding agreement conditional
on approval by the league (the NFL in the case of football,
the NBA in the case of basketball). See Beacon on the Hill
Sports Marketing, “Investment Proposal Summary: Process
for Buying an NFL Team, General Partnership or Limited
Partnership Investment,” www.beacononthehillsportsmark
eting.com/pages/leaguesfranchises_nflinvestmentproposal.h
tm; Constitution and By-Laws of The National Basketball Associa-
tion, Article 5, pp. 8–9, May 29, 2012, http:mediacent
ral.nba.com/media/mediacentral/NBA-Constitution-and-By-
Laws.pdf (both websites visited January 20, 2016).
    Segal was authorized to purchase the Bulls investment at
the appraised value “if no acceptable offer [wa]s received by
the United States within six months,” and that appears to
have been the case. The offer was acceptable to the govern-
ment, but to be acceptable to Segal, an interested party, it
would have had to be a firm offer—a reliable estimate of the
market price of the Bulls investment formerly owned by
Segal that would enable him to determine whether to pay
that price. The expectation was disrupted by Huizenga’s of-
fer, which the district court should therefore have rejected.
The district court must allow Segal to exercise with all delib-
12                     Nos. 13-3847, 14-2214, 14-2215, 14-3533


erate speed his option to repurchase the remaining half of
his interest in the Bulls for the appraised value.
    So much for Segal’s appeals. The government’s appeal
relates to another asset that the government retained as part
of Segal’s criminal punishment—stock, worth about
$467,000, in the Rush Oak Corporation, a bank holding com-
pany. The government claims that the parties agreed as part
of the settlement that the United States would keep the stock
in order to satisfy the forfeiture judgment. Paragraph 12 of
the settlement agreement states:
      All parties agree that upon approval of the Settle-
      ment Stipulation by the Court, the personal judg-
      ment in the amount of $15 million entered against
      defendant Segal shall be satisfied and the United
      States shall have no further claim against defendant
      Segal relating to the entry of the forfeiture judg-
      ment against him personally. Upon entry of a final
      order of forfeiture against the remaining property
      identified on Exhibit A, but not listed on Exhibit B,
      all right, title, and ownership interest in that re-
      maining property shall vest in the United States
      and no one, including defendant Michael Segal,
      shall have any further claim to the property.
Thus the government would keep the assets that were listed
on Exhibit A but not those listed on Exhibit B; those Segal
would keep. But there’s a problem: the Rush Oak stock is not
listed on either exhibit.
    Upon approval of the settlement agreement the $15 mil-
lion forfeiture judgment against Segal was satisfied and
Segal moved to have the Rush Oak stock released to him on
that ground. But the government presented evidence that in
the negotiations leading up to the settlement agreement the
Nos. 13-3847, 14-2214, 14-2215, 14-3533                     13


early versions of Exhibit A listed Rush Oak, but Exhibit B
never listed it. The assistant U.S. attorney who was handling
this part of the government’s case handed Segal’s lawyer a
draft he had prepared of Exhibit B—and it did not include
the Rush Oak stock. Subsequent drafts excluded the stock
from both lists.
    While there was no discussion of the Rush Oak stock
during the settlement negotiations, there were explicit nego-
tiations about the Oak Bank stock, and Segal claims that the
government’s agreement to release the Oak Bank stock also
covered the stock of Rush Oak, the holding company for
Oak Bank. But the government presented evidence that the
two types of stock had always been mentioned separately on
the asset schedules. And the government had said it was
agreeing to release the Oak Bank stock because it was worth
only about $20,000; this estimate could not have included the
Rush Oak stock, valued at $467,000.
    The district judge held a hearing on whether to release
the Rush Oak stock to Segal, and noting the absence of the
stock from Exhibit A ruled that Segal was entitled to it. But
in so ruling he overlooked the possibility that the asset had
been inadvertently omitted from both lists.
    The government asked that Segal’s lawyer be called as a
witness. The judge refused lest that “start getting into attor-
ney-client privilege matters.” No it wouldn’t. The govern-
ment wasn’t asking to question the lawyer about confiden-
tial discussions with his client but only about whether the
lawyer had seen the Rush Oak stock on the first version of
Exhibit A, signifying that the government would retain it,
and had noticed the omission on later versions but had not
brought that to the court’s attention.
14                    Nos. 13-3847, 14-2214, 14-2215, 14-3533


    The evidence points to a mutual mistake of fact—both
parties assumed the stock would be retained by the govern-
ment but in the rush of drafting and redrafting of the settle-
ment agreement had failed to mention it. The fact that the
stock was left off both exhibits suggests that that particular
asset (hardly a giant) was simply forgotten. There is no evi-
dence that it was meant to be on Exhibit B, the list of assets
to be returned to Segal. But the government properly argues
that an evidentiary hearing, which the district judge did not
hold, is necessary to resolve the issue.
    To summarize, we affirm the district judge’s ruling with
respect to the insurance policies, but reverse his ruling with
respect both to the Bulls investment and the Rush Oak stock
and remand with directions to allow Segal to buy the Bulls
investment at its appraised value and to conduct an eviden-
tiary hearing of the government’s appeal regarding Rush
Oak. The judgment entered by the district court is therefore
AFFIRMED in part and REVERSED in part, and the case
REMANDED with instructions.
