By order of the Bank ruptcy Appe llate Panel, the prec edential effec t of t his de c isi on is l im ite d to thec as e an d p ar tie s p ur su an t to 6th C i r
. B A P L B R 8 0 1 3 -1 (b). S

ee a l s o 6 th C i r
. B

A P L B R 8 0 1 0 -1 (c).
F ile Nam e: 13b0001n.06
BA NK RU P TC Y A P P ELLA TE P AN EL OF THE SI XT H C IR CU IT

I n re: DANI ELPEOPL ES, J R. ,

Debtor.

______________________________________ ) ) ) ) No. 12-8017

Appea l from the United States B ankruptc y Court for the Southern District of Ohio Case No. 11-30146

. Dec ided and F iled: J anuar y 4, 2013
B e fo re : EM ERS ON , H ARRI S, a nd SHE A- STO NU M , B ank ru ptc y Ap pe llate Pane l Judg e s.

____________________ CO UN SEL
O N B RI E F: Th oma s R. No land , M ic ha e l R. Keefe, S TAT MAN, HA RRI S & EY RI CH , L L C, Day ton, Ohio, for Appe llee. Da niel Peoples, J r., Da

y ton, Ohio, pro se.

____________________ OP IN ION

____________________
ARTHUR I . HARRI S , Ba nkruptcy Appellate Panel J udg e. This appeal ar ises from an or der enter ed by

the B ankruptc y Court for the Southern D istrict of Ohio approvingthe Chapter 7 tr ustee’s motion to s ettle and c ompromise the debtor’ s employ ment discrimination claims.-2- I. ISSU ES ON AP P EAL The issue pre sented by

this appea l is whether

the bankr uptcy court e rre d when it appr oved the Chapter 7 tr

ustee’s pr oposed settlement of the debtor’s employ ment discrimination c laims. For the re asons that follow, the orde r of the ba nkruptcy court is AF FI RMED.
II. JU RI SDI CT ION AND STANDARD OF RE VI EW Th e B ank ru ptc y Ap pe llate Pane l of the Sixth Cir c uit ha s juri sd ic tio n to de c ide thi s a pp e a l. The United States District Court for t h e S outhern District of O hio has authorized appe als to the Pane l, a nd ne ith e r p art

y tim e ly e le c te d to have thi s a

pp e a l he a rd b y th e distr ic t c ourt . 2 8 U .S. C. §§ 15 8( b) (6 ), (c )( 1) . Afi na l or de r o f a ba nkrupt c y c ourt may be a pp e a le d a s o f r ig ht p ur su ant t o 28 U.S.C. § 158(a)(1)

. On Ap ri l 14, 2012, the bankruptc y court e ntere d an orde r appr oving the trustee’ s motion to settle and compromise claims. A bankruptc y court’s order approvinga trustee ’s

m o t i o n to settle and compromise c laims is a final, appe alable or der. J o h n s o n v
. J

a c k s o n F a m i ly Television Inc. (

In re Media Cent., Inc.) , 190 B .R. 31 6, 32 1 ( E. D. Te nn . 1 99 4) . T he de bto r t ime ly filed a notice of appe al on April 23, 2012.
“The bankruptc y

court’s a pproval of a

settlement ag ree m en t i s revie wed f or an a buse of d is c r e ti o n.” In re MQV

P, Inc. , 10-2225, 2012 WL1233019, at *2 (6th Cir. Apr. 13, 2012) (u np u b l i s h ed ) ( ci t i n g Lyndon Prop. Ins. Co. v. E. Ky. Univ

. , 200 F. App’x 409, 413 (6th Cir. 2006))

. Under an abuse of discre tion standard of r eview, “ [t ]he question is not how t h e revie wing court would have r

uled, but rathe r whether a rea sonable person could ag ree with the bankruptc y court’s decision; if re asonable persons c ould differ as to the issue, then ther e is no abuse of discret i o n .” Mayor of Baltimore v. W . Va. ( In re Eagle

–Picher I ndus., Inc.) , 285 F.3d 522, 529 (6th Cir. 2002) (citations omitted).
III . F AC TS
Fr om April 2007 until hi s termination in late Fe bruar y 2010, Daniel Peoples, J r. (“ Debtor” ) worke d as an employ ee for Veolia Water North Americ a Oper ating Service , I nc. and Veolia Water Americ a, L L C ( collectively , “Ve olia”). I n ear ly -De cembe r 2010, De btor reta ined counse l to pursue-3-

employ m en t d i s cr imination claims ag ainst Veolia a nd filed a c harg e with the Equa l Employ ment Opportunity

Commi ssion (the “EEO C”).
On J anuar

y 13, 20 1 1 , fiftee n day s after signingan ame nded EEOC c harg e, De btor filed a petition for re lief under

Chapter 7 of

the B ankruptc y

Code. Debtor f

ailed to disclose his potential claims ag ainst Veolia in his bankruptc y schedule s, Statement of F inancial Af fairs, a nd at his § 341

me e tin g of

c re dit or s. On

Marc h 1 7, 20 11 –thre e da

y s a ft e r the me e tin g of

c re dit or s–De bto r f

ile d s uit ag ainst Veolia. In h i s suit, Debtor alleg ed ra cial discrimination and pr ay ed for relief in excess of $25,000 dollars. Two wee ks afte r filing suit, De btor rec eived his “ rig ht to sue” letter fr om the EEOC and ame nded his Complaint to include Title VI I claims. Veolia r emoved De btor’s ca se to fede ral district court.
Debtor ne ver notified the Chapter 7 trustee (“Tr ustee” ) of his discr imination claims, and the bankruptc y

court e ntere d an orde r dischar g ing D ebtor on June 2, 2011. Trustee e ventually lear ned of De btor’s cla ims in l ate July 2011, and at Tr

ustee’s r equest, the ba

nkruptcy court re opened the Debtor’ s bankruptcy

case . On September

13, 2011, Veolia moved f or summary j u dg ment on De bto r’ s e mpl oy

me nt d isc ri min a tio n c la ims in t he d i s t r i c t c o u r t b a s e d u p o n j ud ic ia l e sto pp e l be c a

us e D e b t o r f a i l e d t o d i s c l o s e t h e c l a i m s i np r o c e e d i n g s b e f o r e t h e b an kr

u p t c y c o u rt

. S u

b s e qu e n t l y, Trus te e a s s u

me d r e s p o n s ib il it

y f o r prosec ution of Debtor’ s claims. Trustee unsucce ssfully attempted to retain a n employ me nt a tt o r n e y wh o w o u ld pursue De btor’s discrimination claims on a c ontinge ncy ba sis , a nd De bto r’ s e state la c ke d the re so ur c e s to hi re an atto rn e y . T ru ste e ne g oti a te d w ithVe oli a to s e tt le D e b to r ’ s d is c r im in a ti o n c la im s an d o b ta in e d an $ 8 , 0 0 0 s e tt le me n t of fer . On Dec ember

21, 2011, Trust ee fi led a motion to settle and compromise D ebtor’s e mploy ment dis c ri min a tio n c la ims in t he ba nk ru ptc y c ourt . De bt or obje c te d to Tr us te e ’s pr op os e d s e ttl e me nt. On April 12, 2012, the ba nkruptcy court held a hear ing on Trustee ’s motion to s ettle and De btor’s objection. The b an k ru ptcy court issued a

n oral de cision approvingTrustee ’s motion to settl e and

e nte re d a wr itt e n o rd e r r e fl e c tin g its jud g me nt. De bto r t ime ly fi le d h is N oti c e of

Ap pe a l.
I n his two-pag e B rief, Debtor argues that the bankr uptcy court e rre d beca

use of a n alleg ed conflict of inter est which prohibited Tr ustee fr om settling the discr imination claims, Trustee’s-4-

mot ion sh ou ld h a ve be e n s tay e d p e nd ingthe ou tc ome of a dif fe re nt c a se inv olv ingjud ic ia l e sto pp e l,

and be c a us e Tr us te e fa ile d to ob ta in a

larg e e no ug h s e ttl e me nt.
IV . D ISC USS ION “On motion by

the trustee a

nd after notice a

nd a hea ring , the cour

t may approve a
com p r o mi s e o r s e tt le me n t. ” F e d

. R. B an kr
. P. 9 0 1 9

. “ Wh e n d e te r mi n in g w h e th e r to a

pprove a pr op os e d s e ttl e me nt .

. . ‘t he ba nk ru ptc y c ourt is c ha rg e d w ithan a ff

ir mativ e ob lig a tio n to a

pp ri se its e lf of the un de rl y ingfa c ts a

nd to make an ind e pe nd e nt jud g me nt a s to wh e the r t he c omp ro mis e is f a ir an d e qu it a b le .’ ” In re M

QVP, Inc

. , 2 0 1 2 W L1 2 3 3 0 1 9 , at * 3 (c i t i n g Rey nolds v. C.I.R. , 861 F.2d 469, 473 ( 6th Cir. 1988)).
T h e S u p re m e C o u rt h as s et fo rt h t h e gen er al fa ct o rs t o b e c o n s i d er edb y t h e b an krup t cy

j u d ge in d e te rm ini ngwh e the r a

pr op os e d s e ttl e me nt i s f

a ir and e qu ita ble :
There can be no informed and independe nt judg ment as to whethe r a p ro p o s ed co mp ro m i s e i s fa i r an d eq u i t ab l e u n t i l t h e b an krup t cy j u d ge has appr ised himself of all fa cts nec essar y for an intelligent a

nd objective opinion of the proba biliti es of ultimate succ ess should the claim be litigated. Fur

ther, the judg e should form an educated estimate of the c omp l ex i ty , expense, and likely duration of suc h litigation, the possible difficulties of c ollectin g on any judgme nt which mig ht be obtained, and all other fac tors rele vant to a full and fa ir a sse ssm e nt o f the wi sd om of the pr op os e d co mpr omi se . Ba sic to this process in eve ry

instance, of

course , is the need t o co mpare the terms of the c ompromise with the likely rew ards of

litigation. Id. (q u o t i n g P r o te c ti v e Co m m
. fo r I n d e p
. S to c k h o ld e r s o f T M T T r a il e r F e r r y , I n c
. v
. A n derson , 390 U.S. 414, 424–25, 88 S. C t. 1157 (1968)). When consideringa trustee ’s motion to compromise bankruptcy courts should consider four fa c tor s: (a) The proba

bility of success in the litigation; (b) the difficulties, if any , to be encounte red in the matter of collection; (c ) the c omplex ity of the litigation involved, and the expense, inconvenienc e and delay nece ssarily attending it; (d) the par amount interest of the cre ditors and a pr oper de fer ence to thei r reasonable view s in the premises.-5-

In re Ba rd , 4 9 F. Ap p ’x 5 2 8 , 5 3 0 (6 t h C i r. 2 0 0 2 ) ( qu o t i n g D r e x e l v
. L o om is , 3 5 F. 2 d 8 0 0 , 806 (8th Cir. 1929)). See also In reMQVP, I nc. , 2 01 2 WL

12 33 01 9, a t *3 ; Lyndon Prop. Ins. Co. v. Kat z , 196 F. App’x 3 8 3 , 3 8 7 (6th Cir. 2006). “Thoug h Ba rd is an unpublished opinion, . . . [ the Six th Circuit continues] t o apply its fo u r- factor test when c onsidering challeng es to proposed settlement ag ree ments in bankruptcy case s.” See I

n re MQV P, Inc. , 2012 WL 1233019, at *3 (c iting Six th Circuit case la

w).
I n this c ase, the bankruptc y court corr ectly rec og nized a nd applied the standa

rd for approving a bankr uptcy trustee’ s motion t o settle. Even though De btor’s cla ims alleg ed ser ious discrimination, Trustee could not find compete nt counsel willing to repre sent the estate , making it almost certain that Debtor’ s claims would result in zero rec overy . Additionally , Veolia’ s pending summary judgme nt motion in t he district cour t raised unde cided issues of la w which Tr

ustee be lieved would re quire br ie fi ng , a

nd De bto r’ s e state did

no t ha ve any fu nd s to a de qu a te ly res po nd to t hat mo tio n. As a result, Trustee neg otiated his best settlement and moved to settle. No cre ditor objected to Tr ustee’s pr op os e d s e ttl e me nt. The princ ipal rea son for Tr ustee’s ina

bility to hire employ

ment counsel a

ppear s to be that Veolia, De btor’s for

mer e mp l oy er, r aised the issue of judicial estoppel in the district court. “ The doctrine of

judicial estoppel ‘g ener ally preve nts a party from pre vailing in one phase of a ca se on an argument and then re l y ing on a contra dictory

arg ument to preva il in another phase .’ ” W hite v. W yndham Vac ation Ownership, Inc. , 6 1 7 F. 3 d 4 7 2 , 4 7 6 (6 t h C i r. 2 0 1 0 ) ( qu o t i n g New Hampshire v. Maine , 532 U.S. 742, 749, 121 S. C t. 1808, 1814 (2001)). In W hite , a f a c tu a ll y s imilar case , the Six th Circuit found a debtor’ s p ri o r re p resentations to the bankruptcy court e stopped her f

rom litigating her e mploy

ment discrimination cl ai m s in the district court. Se e W hite , 617 F.3d at 484. At the time the bankruptcy court entered judgment gr anting Trustee ’s m otion to settl e it was unc lear

w h e th e r ju d ic ia l e s to p p e l a

p p li e s to a

b an kr u p tc y tr u s te e if th e tr u s te e p r o s e c u te s a

d e b tor ’s

em p loy ment discrimination claims. See H arrah v. DSW

Inc. , 8 5 2 F

. Su

p p
. 2 d 900, 907 (N.D. O hio 2012)

. After the bankruptc y court enter ed judgme nt, the Six th Circ uit he ld that judicial est o p p el b as ed on the debtor’s re prese ntations to the bankruptcy court should not apply

to a bankruptc y

trustee. Stephenson v . Malloy , 7 00 F .3 d 2 65 (6 th C ir

. 20 12 ) ( de bto r’ s f a ilure to d isc los e-6-

claims does not preve nt the bankruptc y trustee from pursuing them as the rea l pa rty in interest). See Auday v. W

et Seal Re tail, Inc. , 6 9 8 F. 3 d 9 0 2 , 9 0 5 (6 t h C i r. 2 0 1 2 ) ( ci t i n g Ree d v. City of Arlington , 650 F.3d 571, 573- 74 (5th Cir. 2011) ( en banc ) (innocent bankruptc y trustee should not be estopped, in line with rulings in the Seventh, Te nth, and Eleve nth Circuits)). Given the unse ttled case law at the time o f its decision and the lac k of experienc ed counse l willing to litigate the employ ment dis c ri min a tio n cla ims , we are un a ble to s ay tha t th e ba nk ru ptc y c ourt a bu se d it s d isc re tio n w he n it approve d Trustee ’s motion to settl e, despite subse quent deve lopments in S ix th Circuit case la w.
I n his brief, De btor also arg ues t hat Trustee made a mistake at t he meeting of cre ditors which raised the judicial estoppel issue, and the case should have be en stay ed pending the out come of an
unre la te d c a se inv olv ing the same le g a l iss ue s. De bto r r a ise s th e se iss ue s f or the fi rs t ti me on

a pp e a l. The Six th Circuit has held that, in g ener al, i ssues not prese nted t o the trial cour t but raised for

the fi rst tim e on

a pp e a l are no t pr op e rl y

be fo re the a

pp e llate c ourt

. McFarland v . Hende rson , 30 7 F .3 d 4 02 , 4 07 (6 th C ir . 2 00 2) ; see also Bailey v. Floyd Cnty. Bd. of Educ

. , 106 F.3d 135, 143 (6 th C ir . 1 99 7) (“ I t is we ll- se ttl e d that this co ur t will no t con sid e r a

rgume nts ra ise d f

or the fi rs t ti me on appea l unless our failure to consider the issue w ill resul t i n a p l ai n miscarr iag e of justice.” ). There is no reason in this case to depar t from this well-settled policy

. V. CO NC LU SION
For the fore g oing r easons, the or der of the bankr uptcy court is AF FI RMED.