UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

FORT LAUDERDALE DIVISION

In re:

No Rust Rebar, Inc., Case No. 21-12188-PDR

 Debtor. Chapter 7 

 / 

ORDER GRANTING APPELLEE’S MOTION TO STRIKE PORTIONS OF

APPELLANTS’ DESIGNATION OF RECORD ON APPEAL

This matter is before the Court on the Motion to Strike 285 Appellant 

Designation Filed by Trustee Sonya Salkin Slott (Doc. 297) (the “Motion To Strike”). 

The dispute concerns an appeal stemming from the Court’s order1 granting Trustee’s 

Motion to Compromise Controversy with Green Tech Development (“Settlement 

Motion”).2 On August 17, 2022, the Court considered the Settlement Motion and the 

1 (Doc. 257).

2 (Doc. 218).

Peter D. Russin, Judge

United States Bankruptcy Court

_____________________________________________________________________________

ORDERED in the Southern District of Florida on November 30, 2022.

Case 21-12188-PDR Doc 340 Filed 12/01/22 Page 1 of 11
related Objection filed by Don Smith (the Debtor’s principal), Global Energy Sciences, 

LLC, Raw Energy Materials, Corp. and Yellow Turtle Design, LLC (the “Objecting 

Parties”).3 The Court entered an Order Granting the Motion to Compromise 

Controversy on August 23, 2022 followed by a Memorandum Opinion4 on August 30, 

2022. The Objecting Parties then filed a Notice of Appeal on September 6, 2022, and 

an Appellant Designation of Contents for Inclusion in Record on Appeal (the 

“Designation” or “Record on Appeal”) on September 20, 2022. The Court held a 

hearing on the Motion on October 27, 2022. The Trustee now moves to strike the 

following designated items:

Lead Case

(Case No. 21-12188-PDR)

Document Number Document Title

224

Notice of Taking Rule 2004 Examination Duces 

Tecum of Sonya Salkin Slott, Chapter 7 Trustee and 

under BR 7030 (filed by Debtor)

225

Notice of Taking Rule 2004 Examination Duces Tecum 

of Green Tech Development LLC and BR 7030 (filed by 

Debtor)

230

Amended Notice of Taking Rule 2004 Examination 

Duces Tecum of Sonya Salkin Slott and 7030 (filed by 

Debtor)

239

Motion to Strike Notice of Examination (filed by Green 

Tech)

243

Notice of Taking Rule 2004 Examination Duces Tecum 

of Green Tech Development LLC Joinder (filed by 

Creditors Global Energy Sciences, LLC, Don Smith, 

Interested Party Elina Jenkins)

3 (Doc. 245). 4 (Doc. 262).

Case 21-12188-PDR Doc 340 Filed 12/01/22 Page 2 of 11
247

Notice of Filing Transcript of 2004/7030 Examination 

of Sonya Salkin Slott (filed by Debtor)

249

Order Granting Motion to Strike Re: # 239

Adversary Proceeding 

(Case No. 21-01111-

PDR)

Document Number

Document Title

96 Notice of Filing Affidavits of Lauren and Ludwig 

97 Affidavit of Don Smith Certification with Exhibits 

Background5

In January 2015, Don Smith founded No Rust Rebar, Inc. to, ostensibly, 

manufacture structural reinforcement products that do not rust. No Rust contracted 

to purchase industrial real estate in Pompano Beach, Florida, but after placing a 

nonrefundable deposit, did not have the funds necessary to close on the Property. In 

an attempt to salvage the deal, No Rust agreed to assign its right to purchase the 

Property to Green Tech Development, LLC. In January 2016, Green Tech bought the 

Property and No Rust remained in possession. Litigation between the parties ensued 

with respect to the Debtor’s assertion that it had an oral option to purchase the 

property from Green Tech (the “State Court Litigation”). Years later, on March 5, 

5 The Court has detailed the background of this case on numerous occasions and adopts its

previous findings for purposes of this ruling. See (Doc. 193); In re No Rust Rebar, Inc., 641 B.R. 412

(Bankr. S.D. Fla. 2022); No Rust Rebar, Inc. v. Green Tech Development, LLC (In re No Rust Rebar,

Inc.), No. 21-01111-PDR (Doc. 72), 2021 WL 4314221 (Bankr. S.D. Fla. Sept. 22, 2021). 

Case 21-12188-PDR Doc 340 Filed 12/01/22 Page 3 of 11
2021, No Rust filed a voluntary Chapter 11 bankruptcy petition in this Court, and No 

Rust removed the State Court Litigation to this Court. Green Tech also filed a proof 

of claim.

In May 2022, the bankruptcy case was converted to Chapter 7, and 

subsequently, the Trustee sought approval by the Court of a settlement with Green 

Tech which would resolve all issues between them. In response, the Objecting Parties 

filed their Objection3 to the Trustee’s Settlement Motion.

The Court held a hearing on August 17, 2022, to consider the Trustee’s 

Settlement Motion and the Objection. The Court found that the Settlement complied 

with Rule 9019, satisfying the standard set forth in Wallis v. Justice Oaks II, Ltd. (In 

re Justice Oaks II, Ltd.), 898 F.2d 1544, 1549 (11th Cir. 1990).

The Court made clear that the standard for approving such a settlement is 

generally very low, and that the Court is instructed to approve any settlement that 

does not fall “below the lowest point in the range of reasonableness.” Martin v. 

Pahiakos (In re Martin), 490 F.3d 1272, 1275 (11th Cir. 2007). 

Both at the hearing and in its Memorandum Opinion, the Court addressed with 

some particularity the point that “the Court is not expected to hold a ‘mini-trial’ to 

determine the merits of each and every claim subject of a disputed settlement, but 

must simply be convinced that a trustee’s judgment is based upon a sound assessment 

of the situation.” In re Harbour E. Dev., Ltd., No. 10-20733-AJC, 2012 WL 1851015, 

at *1 (Bankr. S.D. Fla. May 21, 2012) (cleaned up).

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Discussion 

The Court must determine whether certain items may be included in the 

Record on Appeal. Federal Rule of Bankruptcy Procedure 8009 governs the contents 

of a record on appeal, and Rule 8009(e)(1), requires the Bankruptcy Court to resolve 

disputes in this regard and provides: 

(e) Correcting or Modifying the Record.

(1) Submitting to the Bankruptcy Court. If any difference arises about 

whether the record accurately discloses what occurred in the 

bankruptcy court, the difference must be submitted to and settled 

by the bankruptcy court and the record conformed accordingly. If 

an item has been improperly designated as part of the record on 

appeal, a party may move to strike that item. 

The Trustee argues that Carmichael v. Blake (In re Imperial Petroleum 

Recovery Corp.), 2022 Lexis 32*, 2022 WL 90607 (Bankr. S.D. Tex. Jan. 7, 2022) limits 

the Record on Appeal to only those items referenced in Defendant’s written Objection 

and those items upon which the Objection relies. The Court finds this interpretation 

too narrow. In contrast, the Objecting Parties argue that the record should include 

any item they wish to designate. The Court finds this interpretation too broad.

While this issue is infrequently litigated, there are several recent cases which 

address the standards and considerations which apply. As noted, the Trustee relies 

principally upon Carmichael. Appellants filed no written response to the Trustee’s 

motion and cited no opposing case law at the hearing. The Court, however, from its 

own research has found the analysis in In Re Digerati Techs., Inc., 531 B.R. 654 

(Bankr. S.D. Tex. 2015) instructive. 

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In considering Carmichael and Digerati it is apparent that the Record on 

Appeal should not simply include any and all documents that have ever been filed, 

but rather is narrower in scope, and should comprise only those items which the court 

was asked to consider (regardless of whether the item was actually considered) or

those items which the court did in fact consider. In Carmichael the court held that 

“[Appellants] must establish that the disputed items were presented to the Court for 

consideration, or that good cause exists for the items’ inclusion in the appellate 

record” and so only items which were presented to the court or for which there is good 

cause are properly designated. Carmichael 2022 Bankr. LEXIS 32 at *11.

Consistent with the “good cause” concept espoused in Carmichael, Digerati

considers two exceptions to the rule that items on the record must have been 

presented to the court. The first requires a justification for the failure to introduce

documents at the hearing; and the second requires a demonstration that the exclusion 

of an item on appeal would prejudice the party seeking its inclusion. Digerati, 531 

B.R. 654 at 661. Digerati goes on to note however that these exceptions do not apply

in cases where an item was simply not on the docket to begin with, or otherwise was 

not presented to the court for consideration, as opposed to cases where an attorney 

essentially negligently failed to submit an exhibit, Id. at 662.

In this case, the items to which the Trustee objects, were (i) not presented to 

the Court for consideration, (ii) not mentioned in the Objection, and (iii) not 

mentioned during the hearing. On these points alone, it seems these items should be 

stricken from the Designation unless an exception applies.

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Before addressing the potential exceptions however, the Court notes that even 

if these items were presented for consideration, it would have been improper for the 

Court to consider them where the only basis for their inclusion is the extent to which 

they may go to the merits of the underlying disputes which were sought to be settled.

When considering a settlement under Rule 9019 the law is clear that the merits of 

the underlying claims and disputes do not need to be proven.6 To require the Trustee

to do so would be contrary to the function of the settlement process, and a settlement 

should only be denied where it “falls below the lowest point in the range of 

reasonableness.” Martin v. Pahiakos (In re Martin), 490 F.3d 1272, 1275 (11th Cir. 

2007).

Here however, certain of the items are even less substantive than documents 

that may go to the merits of the settled dispute because they are merely docket entries 

of notices for rule 2004 examination,7 and worse, the notices were not filed by the 

Objecting Parties, but by the Debtor after the Court had already determined the 

Debtor lacked standing. 

Other designated items include a joinder to a notice of taking rule 2004 

examination filed by the Objecting Parties, but again the joinder was to the notice 

6 In evaluating a motion to compromise, a court is not expected to resolve the disputed facts 

and legal questions raised by the underlying litigation. Burton v. Ulrich (In re Schmitt), 215 B.R. 

417, 423 (9th Cir. BAP 1997); see also United States v. Alaska Nat. Bank of the North (In re Walsh 

Constr., Inc.), 669 F.2d 1325, 1328 (9th Cir. 1982) (in examining a compromise, “[t]he bankruptcy 

court need not conduct an exhaustive investigation into the validity of the asserted claim[s].”); 

Harbour E. Dev. Ltd., 2012 Bankr. LEXIS 2250, 2012 WL 1851015 at *1 (holding that the court need 

not conduct a “mini-trial” on the merits of the contested claims that are being resolved, but rather, 

the Court need “simply be convinced that a trustee's judgment is based upon a sound assessment of 

the situation”).

7 (Docs. 224, 225, and 230)

Case 21-12188-PDR Doc 340 Filed 12/01/22 Page 7 of 11
filed by the Debtor, which the Court struck. The Appellants also seek to designate 

the Motion to Strike Examination Notice (Doc. 239), Notice of Filing Transcript of 

2004/7030 Examination of Sonya Salkin Slott (filed by Debtor) (Doc. 247), and an

Order Granting the Motion to Strike (Doc. 249); however, these items at best go to 

discovery on the merits of the underlying dispute ultimately settled.

Finally, with respect to the affidavits which have been designated, the 

Affidavits of Lauren and Ludwig (Doc. 96) appear to be wholly unrelated to the Green 

Tech litigation, which was the subject of the Settlement, nor do they touch upon the 

Trustee’s business judgment in relation to the Settlement, and thus they do not

warrant inclusion in the Record on Appeal. As for the Affidavit of Don Smith (Doc. 

97), while it may relate to the Settlement, the Affidavit goes to the merits of the 

underlying dispute ultimately settled and is therefore inappropriate for inclusion in 

the Record on Appeal (even if it had been presented to the Court for consideration in 

deciding the Trustee’s Settlement Motion).

While pleadings do not need to be introduced into evidence to be subsequently 

designated for appeal, they can only be designated if the bankruptcy court actually 

considered them in rendering its ruling, or if the item is included for the purpose of 

arguing that the Bankruptcy Court erred in deciding to exclude it from consideration. 

See, e.g., In re Chateaugay Corp., 64 B.R. 990, 995 (S.D.N.Y. 1986); Carmichael 2022 

Bankr. LEXIS 32 at *8.

Digerati poses the following questions to determine if an item can be properly 

included in the Record on Appeal:

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1. Were any or all of the items actually admitted into the trial record? 

2. Even if the items were not made part of the trial record at the hearing, did the 

judge consider any of these items in reaching the decision? 

3. Even if the judge did not consider any of the items in reaching the decision, 

has Appellant offered any reason for its failure to introduce these items into 

the record at the hearing? and

4. Even if Appellant has not offered any reason for its failure to introduce the 

items into the trial record, have they offered any explanation as to how its 

appeal is prejudiced if the items are stricken from the Record on Appeal?

Digerati, 531 B.R. 654 at 663.

In this case, the items Appellants seek to include in the Record on Appeal were 

never presented to the Court and the Court did not consider them. None of the items 

were referenced in the Order, the Memorandum Opinion, the Trustee’s Motion, the 

Objection, nor by the parties at the hearing. Therefore, the Court looks to the third 

and fourth factors enumerated in Digirati to determine if they nevertheless may be 

designated under an exception. The Appellants did not file a response to the Trustee’s 

Motion to Strike. However, at the hearing a considerable amount of time was spent 

addressing these questions and Appellant’s counsel was unable to articulate any 

reason why the items were not offered to the Court for consideration. 

As to the final question; Counsel did not proffer any specific basis by which the 

appeal would be prejudiced by the exclusion of these items. Further, because the

items were not relied upon by the Court, were not raised by any party for 

consideration, were not referenced in any way in reaching the ultimate decision on 

the Trustee’s Settlement Motion, and would be inappropriate or irrelevant to the 

issue of approving or denying the Settlement even had they been properly raised, the 

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Court can see no basis by which the Appellant will be unduly prejudiced by the 

striking of these items from the Designation.

Conclusion

For the reasons stated, Trustee’s Motion to Strike (Doc. 297) is hereby 

GRANTED. The following items shall be stricken from Appellant’s Designation of 

the Record on Appeal (Doc. 285): 

a. ECF# 224: Notice of Taking Rule 2004 Examination Duces Tecum of Sonya 

Salkin Slott, Chapter 7 Trustee on 8/5/2022 at 10:00 a.m. and under BR7030.

b. ECF# 225: Notice of Taking Rule 2004 Examination Duces Tecum of Green 

Tech Development, LLC on 8/15/2022 at 10:00 a.m. and BR 7030.

c. ECF# 230: Amended Notice of Taking Rule 2004 Examination Duces Tecum 

of Sonya Salkin Slott on August 5, 2022 at 10:00 a.m. and 7030.

d. ECF# 239: Motion to Strike Notice of Examination.

e. ECF# 243: Notice of Taking Rule 2004 Examination Duces Tecum of Green 

Tech Joinder Filed by Creditors Global Energy Sciences, LLC, Don Smith, 

Interested Party Elina Jenkins.

f. ECF# 247: Transcript of 2004/7030 Examination of Sonya Salkin Slott.

g. ECF# 249: Order Granting Motion to Strike Re: # 239.

h. Adversary Proceeding (21-01111-PDR) ECF# 96: Notice of Filing 

Affidavits of Laurin and Ludwig.

i. Adversary Proceeding (21-01111-PDR) ECF# 97: Affidavit of Don Smith 

Certification with Exhibits.

Case 21-12188-PDR Doc 340 Filed 12/01/22 Page 10 of 11
# # #

Copies to Attorney Bonacquisti, who is directed to serve this Order on all interested parties.

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