NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: AGUINA AGUINA, 

Debtor, 

------------------------------

AGUINA AGUINA, 

Appellant, 

 v. 

CHOONG-DAE KANG; et al., 

Appellees.

No. 22-60005 

BAP No. 21-1163 

MEMORANDUM*

Appeal from the Ninth Circuit

Bankruptcy Appellate Panel

Faris and Lafferty III, Bankruptcy Judges, Presiding

Submitted January 9, 2023**

Pasadena, California

Before: CALLAHAN, R. NELSON, and H.A. THOMAS, Circuit Judges.

Chapter 7 debtor Aguina Aguina appeals from the Bankruptcy Appellate 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

** The panel unanimously concludes this case is suitable for decision 

without oral argument. See Fed. R. App. P. 34(a)(2).

FILED

JAN 17 2023

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 

Panel for the Ninth Circuit (BAP), which affirmed the bankruptcy court’s approval 

of a settlement agreement between the bankruptcy trustee, Karl T. Anderson, and 

Aguina’s primary creditors: his ex-wife, Choong-Dae Kang, and her siblings

(Kang Parties). In re Aguina, No. CC-21-1163, 2022 WL 325579, at *1. We 

review the BAP’s decision de novo and “apply the same standard of review that 

the BAP applied to the bankruptcy court’s ruling”—here, abuse of discretion. In re 

Ahaza Sys., Inc., 482 F.3d 1118, 1123 (9th Cir. 2007). We have jurisdiction 

pursuant to 28 U.S.C. § 158(d). We affirm.

1. “Only those persons who are directly and adversely affected pecuniarily 

by an order of the bankruptcy court . . . have standing to appeal that order.” Matter 

of Fondiller, 707 F.2d 441, 442 (9th Cir. 1983). The trustee argues that Aguina 

lacks standing because “there is no reasonable possibility” that the bankruptcy 

estate, after satisfying all of its debts, will have a surplus available with which to 

pay Aguina. We disagree. If we were to reverse the BAP’s decision and order that 

it vacate the bankruptcy court’s approval of the settlement agreement, there would 

exist a possibility—however remote—that the family court would make 

determinations concerning community property and community debt that would, 

upon satisfaction of the bankruptcy estate’s debts, produce a surplus for Aguina.
3 

Because Aguina is thus not “hopelessly insolvent,” he has standing to appeal the 

BAP’s order. See id.

2. A bankruptcy court abuses its discretion either (i) by applying an incorrect 

legal rule for the sort of relief requested (an issue which we review de novo), or 

(ii) by applying the correct legal rule in a way that is “illogical, implausible, or 

without support in inferences that may be drawn from the facts in the record.” In re 

Taylor, 599 F.3d 880, 887–88 (9th Cir. 2010). Here, the bankruptcy court correctly

applied the four-factor test set forth in In re A & C Properties, 784 F.2d 1377, 

1381 (9th Cir. 1986), to determine that the settlement agreement between the 

trustee and the Kang Parties was fair and equitable. That test requires a court

reviewing a bankruptcy settlement agreement to consider “(a) [t]he probability of 

success in the litigation; (b) the difficulties, if any, to be encountered in the matter 

of collection; (c) the complexity of the litigation involved, and the expense, 

inconvenience and delay necessarily attending it; (d) the paramount interest of the 

creditors and a proper deference to their reasonable views in the premises.” Id.

While reasonable minds might disagree about its conclusions, the bankruptcy 

court’s application of the A & C Properties test was logical, plausible, and 

supported by inferences that could be drawn from facts in the record. See id. (“The 

law favors compromise and not litigation for its own sake, . . . and as long as the 

bankruptcy court amply considered the various factors that determined the 
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reasonableness of the compromise, the court's decision must be affirmed.”) 

(citation omitted).

First, the court considered the paramount interest of the creditors. See id.

The court noted that the seven remaining claims in the bankruptcy case would be 

resolved by the agreement, five of them by voluntary withdrawal and two of them 

by using the funds the Kang Parties would give to the trustee as part of the 

settlement. Given that the agreement would resolve all of the remaining creditors’ 

claims, the court did not abuse its discretion in concluding that that this factor 

supported approval of the agreement.

Second, the court considered the complexity of the litigation, as well as any 

related expense, inconvenience, and delay. See id. The court found that Aguina had

been litigating with the Kang Parties for many years and that a rejection of the 

proposed agreement would potentially lead to many more years of litigation, 

adding expense, inconvenience, and delay for all concerned parties. Since the 

settlement would bring the litigation to an end, the court plausibly concluded that it 

would be “very wise” and “very advantageous” to approve the settlement.

Third, the court considered any difficulties to be encountered in collection, 

namely the collection of funds that would have to change hands in fulfillment of

the settlement agreement. See id. On the record, counsel for the Kang Parties 

represented that he had all of the promised funds in a trust account and was
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prepared to facilitate collection by the trustee. The court did not abuse its 

discretion in relying upon this representation to conclude that this factor also 

supported approval of the agreement.

Fourth and finally, the court considered the probability of success in the 

litigation over the dissolution of Aguina’s and Choong-Dae Kang’s marriage. See 

id. The court noted that the proposed agreement would result in a waiver of claims 

by the Kang Parties, including the waiver of any claims Choong-Dae Kang was 

pursuing in the dissolution action. Since the settlement would resolve the litigation 

without placing any new obligations on Aguina, it was logical for the bankruptcy 

court to conclude that the agreement was a preferable alternative to continuing 

litigation.

3. Aguina’s objections to the bankruptcy court’s ruling are without merit. 

Though not clearly articulated by Aguina, his strongest objection is that the 

settlement agreement should be reversed because it is not “in the best interests of 

the estate.” See In re Mickey Thompson Ent. Grp., Inc., 292 B.R. 415, 422 (9th Cir. 

BAP 2003). Aguina states that Choong-Dae Kang possesses “numerous properties 

and great wealth” which “most likely have a community property component,” and 

that Kang therefore possesses “property belonging to Aguina and to the 

Bankruptcy Estate.” He thus implies that (i) the trustee’s calculations do not 
6 

account for these potential assets, and (ii) the proposed settlement is therefore 

unfair and inequitable. We reject these contentions.

In filing for bankruptcy, all of Aguina’s legal and equitable interests, 

including all of Aguina’s interests in community property, became the property of 

the bankruptcy estate. See 11 U.S.C. § 541(a). The bankruptcy court therefore 

came to have exclusive jurisdiction over all of Aguina’s interests in community 

property, despite ongoing community property disputes in Aguina’s dissolution 

proceedings with Choong-Dae Kang. See In re Teel, 34 B.R. 762, 763–64 (9th Cir. 

BAP 1983). And the trustee’s primary responsibility was to administer the assets of 

the estate for the benefit of Aguina’s creditors, see In re DBSI, Inc., 869 F.3d 1004, 

1016 (9th Cir. 2017), even if Aguina thought he could have “handled his financial 

affairs in a more advantageous way outside of bankruptcy.”

The trustee explained to the court that after carefully considering the 

ongoing dissolution proceedings and reviewing various documents concerning the 

potential community property assets, he concluded that the proposed settlement 

was “in the best interest of the estate.” In various filings, he also provided the 

bankruptcy court with reason to believe that the potential community property

assets were not of significant value and that it would be both expensive and 
7 

impractical to liquidate them. The bankruptcy court did not abuse its discretion in

relying on this information and discounting Aguina’s objection. 

Aguina also argues that the court was “obliged to consider, as part of [its] 

‘fair and equitable’ analysis, whether any property of the estate that would be 

disposed of in connection with the settlement might draw a higher price through a 

competitive process and be the proper subject of a sale under 11 U.S.C. § 363.” In 

re Thompson, 292 B.R. at 422. After learning of the proposed settlement 

agreement, Aguina offered the bankruptcy estate $53,000—a “higher price” than

the $49,726.77 the Kang Parties were willing to pay the trustee in fulfillment of the 

settlement agreement. Aguina argues that his superior offer should have led the 

bankruptcy court to consider a sale under section 363 or that the court should have

at least provided a “reasoned explanation” for choosing not to do so. See In re 

Woodson, 839 F.2d 610, 621 (9th Cir. 1988) (“Broad as the bankruptcy court’s 

power may be, it may not completely ignore a nonfrivolous objection, at least 

without giving a reasoned explanation for doing so.”). We are not persuaded that 

the settlement amounted to an asset sale under In re Thompson, given the mutual 

release of claims. See In re Thompson, 292 B.R. at 421 (concluding a proposed 

settlement where estate unilaterally released its claims amounted to an asset sale). 

To the extent that the bankruptcy court was required to consider Aguina’s offer, its 

statement that Aguina failed to present a way to “extinguish or eliminate” the Kang 
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Parties’ most significant claims against him as creditors was ample support for its 

decision to approve the trustee’s proposed settlement, despite Aguina’s offer.

Aguina’s remaining objections also fail. The bankruptcy court did indeed

mention the particular facts of this case in its order; though public policy is not one 

of the four A & C Properties factors, it nevertheless supports ending a dispute that 

has long been a drain on taxpayer money and judicial resources; and Aguina has 

failed to demonstrate that the settlement agreement is illegal or allows a party to 

take advantage of its wrongdoing.

AFFIRMED.