Paula S. Beran, Esquire (Va. Bar No. 34679)

Tavenner & Beran, PLC 

20 North Eighth Street, Second Floor

Richmond, Virginia 23219

Telephone: (804) 783-8300

Facsimile: (804) 783-0178

Counsel for Lynn L. Tavenner, Chapter 7 Trustee

UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF VIRGINIA

Richmond Division

In re: Case No. 19-34574-KRH

LeClairRyan, PLLC,1

Debtor

Chapter 7

MOTION FOR APPROVAL OF COMPROMISE AND

SETTLEMENT AND MEMORANDUM OF LAW

Lynn L. Tavenner, Trustee, not individually, but solely in her capacity as the Chapter 7 

trustee (in such capacity, the “Trustee”) of the bankruptcy estate (the “Estate”) of LeClairRyan 

PLLC (“LeClairRyan” and/or the “Debtor”), in the above-referenced Chapter 7 case hereby files, 

by counsel, pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure, this Motion for 

Approval of Compromise and Settlement and Memorandum of Law (the “Motion”), seeking the 

entry of an order approving a settlement with Bruce H. Matson (“Mr. Matson”). In support of this 

Motion, the Trustee represents the following:

Jurisdiction and Venue

1. The United States Bankruptcy Court for the Eastern District of Virginia has 

jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Standing Order of 

Reference from the United States District Court for the Eastern District of Virginia, dated August 

1 The principal address of the Debtor as of the Petition Date was 4405 Cox Road, Glen Allen, Virginia 23060, and 

the last four digits of the Debtor’s federal tax identification number are 2451.

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15, 1984.

2. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2).

3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

Background

4. On September 3, 2019 (the “Petition Date”), the Debtor filed for relief under 

Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§101-1532 (as thereafter amended, 

the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of 

Virginia, Richmond Division (the “Court”). Pursuant to §§ 1007 and 1108 of the Bankruptcy 

Code, the Debtor operated as a debtor-in-possession.

5. Per agreement between the Debtor, the United States Trustee, and ABL Alliance, 

LLP, the Debtor’s Chapter 11 case was converted to a case under Chapter 7 of the Bankruptcy 

Code on October 4, 2019. Upon conversion, Lynn L. Tavenner was appointed interim trustee, and 

no trustee having been elected at the meeting of creditors, she continues to serve as the Trustee. 

6. Consistent with her duties, the Trustee investigated and continues to investigate 

potential causes of actions. The Trustee, with the assistance of her counsel, filed her Motion for 

an Order Establishing Procedures Regarding the Prosecution of Actions Involving Former 

Attorneys and Certain Others and Memorandum in Support Thereof (the “FAO Procedures 

Motion”), ECF No. 457. The FAO Procedures Motion was approved by Order (the “FAO

Order”) of this Court, ECF No. 533. 

7. Pursuant to the FAO Order, the Trustee, on behalf the Estate, made a demand upon 

Mr. Matson. The Trustee alleged certain civil and statutory claims (collectively, the “Claims”) 

against Mr. Matson. Following Mr. Matson’s receipt of the Trustee’s demand, the Trustee and 

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Mr. Matson, through counsel, engaged in settlement discussions. In the course of those 

discussions, Mr. Matson asserted various contractual breaches by LeClairRyan and various 

defenses to the Claims, including, without limitation, solvency, recoupment, setoff, release, and 

accord and satisfaction. 

8. In accordance with the procedures set forth in the FAO Order, the Trustee and Mr. 

Matson engaged in a mediation with the assistance of Rachel C. Strickland, mediator (the 

“Mediator”). 

9. In connection with the same, the Trustee and Mr. Matson desire to fully resolve and 

settle (collectively, the “Settlement”) the Claims on the terms set forth in a certain settlement 

agreement (the “Settlement Agreement”), without admission of liability. 

10. A material term of the Settlement is that the terms of the Settlement remain 

confidential, unless otherwise ordered by the Court, and, as such, the Settlement Agreement is 

being filed under seal pursuant to the requirements set forth in Paragraph 4 of the FAO Order. In 

addition, the Trustee respectfully requests that the Settlement Agreement remain confidential 

(under seal), subject to disclosure only as provided in the Settlement Agreement.

THE PROPOSED SETTLEMENT

11. After extensive discussions and with the assistance of the Mediator, the Trustee and 

Mr. Matson have reached a resolution that is memorialized in the Settlement Agreement, which 

generally provides for the following:

a. The Settlement shall remain confidential, unless otherwise ordered by the Court; 

b. A sum certain will be received by the Estate; 

a. Certain mutual releases will be granted; and

b. Mr. Matson shall be entitled to any applicable protection of Va. Code Section 8.01-

35.1(A)(2).

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MEMORANDUM OF LAW 

5. Bankruptcy Rule 9019(a) provides that “[o]n motion by the trustee and after notice 

and a hearing, the court may approve a compromise or settlement.” Fed. R. Bankr. P. 9019(a). The 

United States Supreme Court has noted that “[c]ompromises are a ‘normal part of the process of 

reorganization.’” Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. 

Anderson, 390 U.S. 414, 424 (1968) (citing Case v. Los Angeles Lumber Prods. Co., 308 U.S. 106, 

130 (1939)). In TMT Trailer, the Supreme Court stated that compromises and settlements must be 

“fair and equitable.” 390 U.S. at 424; see also In re Loudoun Heights, LLC, No. 13-15588, 2014 

WL 2928110, at *8 (Bankr. E.D. Va. June 27, 2014) (same); Shaia v. Three Rivers Wood, Inc. (In 

re Three Rivers Wood, Inc.), No. 98-38685, 2001 WL 720620, at *6 (Bankr. E.D. Va. Mar. 20, 

2001) (same); In re Frye, 216 B.R. 166, 174 (Bankr. E.D. Va. 1997) (same); In re Austin, 186 B.R. 

397, 400 (Bankr. E.D. Va. 1995) (same).

6. In determining whether a proposed compromise and settlement is fair and equitable, 

courts in this District consider the following factors: (a) “the probability of success in litigation;” 

(b) “potential collection struggles;” (c) “the complexity, time and expense involved in litigating 

the matter;” and (d) “the interests of the creditors.” Loudoun Heights, 2014 WL 2928110, at *9 

(citations omitted); see also Three Rivers Wood, 2001 WL 720620, at *6 (same). 

7. Additionally, the Court must determine whether the proposed settlement is in the 

best interests of the Estate. Three Rivers Wood, 2001 WL 720620, at *6 (“a compromise or 

settlement will most likely gain approval if it is both ‘fair and equitable,’ as well as representative 

of the best interests of the estate as a whole”) (citations omitted); Frye, 216 B.R. at 174 (“In order 

to approve a compromise, this court must look at various factors and determine whether the 

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compromise is in the best interest of the estate and whether it is fair and equitable.”); In re Energy 

Coop. Inc., 886 F.2d 921, 927 (7th Cir. 1989) (“The benchmark for determining the propriety of a 

bankruptcy settlement is whether the settlement is in the best interests of the estate.”). 

8. The factors that courts consider to determine whether a settlement is in the best 

interests of a bankruptcy estate are similar to the factors examined to determine whether the 

settlement is fair and equitable. See Parker v. Bullis (In re Bullis), 515 B.R. 284, 288 (Bankr. E.D. 

Va. 2014) (“The best interests of the estate are met by considering the same factors a court 

considers in reviewing any proposed settlement: (1) the probability of success on the merits in the 

litigation; (2) possible difficulties of collecting any judgment which might be obtained; (3) the 

complexity, expense, and likely duration of any ensuing litigation; and (4) the interests of the 

creditors, giving proper deference to their reasonable views.”) (internal citations omitted).

9. When reviewing a proposed settlement, the Court may take into account the 

Trustee’s business judgment and the opinions of the other parties to such settlement, and the Court 

should not substitute its judgment for that of the Trustee. Instead, the Court must determine 

“whether the settlement falls below the lowest point in the range of reasonableness.” Three Rivers 

Wood, 2001 WL 720620, at *6 (quoting Austin, 186 B.R. at 400). Where a proposed settlement is 

not below the lowest point of what is fair and reasonable and represents the best interests of the 

estate as a whole, the court should approve it pursuant to Bankruptcy Rule 9019. Three Rivers 

Wood, 2001 WL 720620, at *6.

10. The Trustee, in the exercise of her business judgment, believes that the Settlement 

is fair and equitable and in the best interests of the Estate in that, among other things, (a) the 

Settlement was reached as a result of a mediation conducted by the Mediator pursuant to the terms 

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of the FAO Order; (b) the Estate will receive a sum certain upon the Court’s approval of the 

Settlement; (c) the Estate will avoid potentially time-consuming and expensive litigation with Mr. 

Matson; and (d) the Estate will benefit from a release granted by Mr. Matson.

11. Accordingly, the Trustee respectfully requests that the Court (a) approve the 

Settlement as fair and equitable and in the best interests of the Estate, (b) authorize the 

effectiveness of the Settlement Agreement on behalf of the Estate by entry of the Order attached 

as Exhibit A hereto, and (c) grant such other relief as is just and proper.

Dated: May 6, 2021

Richmond, Virginia

LYNN L. TAVENNER, TRUSTEE

By:/s/ Paula S. Beran

Paula S. Beran, Esquire (VSB No. 34679)

Tavenner & Beran, PLC

20 North 8th Street

Richmond, Virginia 23219

Telephone: (804) 783-8300

Facsimile: (804) 783-0178

Counsel for Lynn L. Tavenner, Trustee

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Paula S. Beran, Esquire (Va. Bar No. 34679)

Tavenner & Beran, PLC 

20 North Eighth Street, Second Floor

Richmond, Virginia 23219

Telephone: (804) 783-8300

Facsimile: (804) 783-0178

Counsel for Lynn L. Tavenner, Chapter 7 Trustee

CERTIFICATE OF SERVICE

Pursuant to the Local Rules of this Court, I certify that on this 6th day of May 2021, a 

true copy of the foregoing Motion was sent electronically and/or by first-class mail to: (a) the 

Office of the United States Trustee; (b) the Debtor’s 20 Largest Unsecured Creditors; (c) all 

known secured creditors from the Debtor’s Official Form 106D; (d) the Core Parties and 2002 

List as defined in the Case Management Order; and (e) all parties requesting service of pleadings 

in this Case.

/s/ Paula S. Beran

Counsel for the Trustee

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Paula S. Beran, Esquire (Va. Bar No. 34679)

Tavenner & Beran, PLC 

20 North Eighth Street, Second Floor

Richmond, Virginia 23219

Telephone: (804) 783-8300

Facsimile: (804) 783-0178

Counsel for Lynn L. Tavenner, Chapter 7 Trustee

UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF VIRGINIA

Richmond Division

In re: Case No. 19-34574-KRH

LeClairRyan, PLLC,1

Debtor

Chapter 7

ORDER APPROVING SETTLEMENT

This day came Lynn L. Tavenner, Trustee (the “Trustee”), by counsel, on her Motion for 

Approval of Compromise and Settlement and Memorandum of Law (the “Motion”), the Court 

having found that (a) the Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 

1334, (b) this is a core proceeding pursuant to 28 U.S.C. § 157(b), (c) notice of the Motion and 

hearing thereon was sufficient under the circumstances, and (d) the Settlement represents (i) a 

sound exercise of the Trustee’s business judgment, (ii) falls within the range of reasonableness, 

(iii) is fair and equitable, and (iv) is in the best interest of the Estate and creditors; and the Court 

having determined that the legal and factual basis set forth in the Motion establish just cause for 

the relief granted herein;

UPON DUE CONSIDERATION, IT IS ORDERED, ADJUDGED AND DECREED 

THAT:

1 The principal address of the Debtor as of the Petition Date was 4405 Cox Road, Glen Allen, Virginia 23060, and 

the last four digits of the Debtor’s federal tax identification number are 2451.

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1. Capitalized terms not otherwise defined herein shall have the meanings given to 

them in the Motion.

2. Notice of the Motion (and service of the proposed order) was sufficient under the 

circumstances.

3. The Trustee is authorized to take all action necessary to effectuate the Settlement, 

including but not limited to the execution and delivery of the Settlement Agreement.

4. The terms of the Settlement, as well as the documentary evidence of the same in 

the form of the Settlement Agreement (which was filed under seal in accordance with Paragraph 

4 of the FAO Order), shall remain confidential under seal subject to disclosure solely as provided 

in the Settlement Agreement.

5. To the extent the Trustee asserts a claim against any Person2 further identified in 

the Settlement Agreement, which is derivative of or related to the Claims, and any such Person 

thereafter asserts a resulting third-party claim against Mr. Matson for contribution asserting Mr. 

Matson is responsible, in whole or in part, for the damages underlying the Trustee’s claim, Mr. 

Matson shall be entitled to all of the applicable protections of Va. Code Section 8.01-35.1(A)(2).

6. The Court shall retain exclusive jurisdiction to interpret and enforce the terms of 

this Order.

Entered:

THE HONORABLE KEVIN R. HUENNEKENS

UNITED STATES BANKRUPTCY JUDGE

I ask for this:

2 As such term is defined at 11 U.S.C. § 101 (41).

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/s/

Paula S. Beran, Esquire (VSB No. 34679)

Tavenner & Beran, PLC

20 North 8th Street

Richmond, Virginia 23219

Telephone: (804) 783-8300

Facsimile: (804) 783-0178

Counsel for Lynn L. Tavenner, Trustee

SEEN AND AGREED:

/s/______________________________

Dion W. Hayes (VSB No. 34304)

McGUIREWOODS LLP

Gateway Plaza

800 East Canal Street

Richmond, Virginia 23219

Telephone: (804) 775-1000

Counsel for Bruce H. Matson

SEEN AND AGREED:

/s/______________________________

Bruce H. Matson

117 Thomashire Ct

Richmond, VA 23229

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CERTIFICATION

I hereby certify that, pursuant to Local Rule 9022-1, the foregoing Order Approving 

Settlement has been served upon and/or endorsed by all necessary parties.

/s/

Counsel for the Trustee

Service List

Paula S. Beran, Esquire 

Tavenner & Beran, PLC

20 North Eighth Street, Second Floor 

Richmond, VA 23219

Dion W. Hayes, Esquire

McGUIREWOODS LLP

Gateway Plaza

800 East Canal Street

Richmond, Virginia 23219

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