NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE TENTH CIRCUIT

_________________________________

In re GEORGE VELASQUEZ,

 Debtor.

___________________________________

GEORGE VELASQUEZ,

 Appellant,

v.

YVETTE GONZALES, Chapter 7 Trustee, 

& LOS ALAMOS NATIONAL BANK,

 Appellees.

BAP No. NM-18-076

Bankr. No. 12-10670

Chapter 7

OPINION*

_________________________________

Appeal from the United States Bankruptcy Court

for the District of New Mexico

_________________________________

Submitted on the briefs.**

_________________________________

Before SOMERS, MOSIER, and MARKER,

1 Bankruptcy Judges.

 * This unpublished opinion may be cited for its persuasive value, but is not 

precedential, except under the doctrines of law of the case, claim preclusion, and issue 

preclusion. 10th Cir. BAP L.R. 8026-6. ** After examining the briefs and appellate record, the Court has determined 

unanimously to honor the parties’ request for a decision on the briefs without oral 

argument. See Fed. R. Bankr. P. 8019(b). The case is therefore submitted without oral 

argument.

1 Joel T. Marker, U.S. Bankruptcy Judge, United States Bankruptcy Court for the 

District of Utah, sitting by designation.

FILED

U.S. Bankruptcy Appellate Panel

of the Tenth Circuit

June 18, 2019

Blaine F. Bates

Clerk
2

_________________________________

MOSIER, Bankruptcy Judge.

Successfully challenging a trustee’s decision to settle litigation is a difficult task. 

To do so, the party opposing the settlement must establish that the settlement falls below 

the lowest point in the range of reasonableness.

2 The Appellant did not make that 

showing, and we therefore affirm the Bankruptcy Court’s decision.

I. FACTUAL AND PROCEDURAL HISTORY

A. The Business Loan

Debtor George Velasquez owned and operated a corporation called Professional 

Business Assistants, Inc. (PBA), which borrowed $396,000 from Los Alamos National 

Bank (LANB) in August 2006 (Business Loan). The Business Loan had a thirty-year 

term and a variable interest rate. LANB secured the Business Loan with a mortgage 

against PBA’s commercial building in Santa Fe, New Mexico. The Debtor also 

personally guaranteed the Business Loan. 

PBA defaulted on the Business Loan but LANB agreed to renew the note, reamortizing principal and interest, though retaining the same maturity date. After PBA 

defaulted on the first renewal, LANB and PBA executed a second renewal note in June 

2010, which provided PBA would make one balloon payment of the remaining loan 

balance on December 1, 2010 (June Renewal). PBA defaulted on the June Renewal’s 

balloon payment, resulting in a final renewal, which extended the maturity date until 

 2 Rich Dad Operating Co.v. Zubrod (In re Rich Global, LLC), 652 F. App’x 625, 

631 (10th Cir. 2016) (unpublished).
3

April 1, 2011 (December Renewal). On March 1, 2011, the Debtor and PBA signed a 

one-month promissory note for $13,846.14, due April 1, 2011 (Short Term Loan).

B. The Personal Loan 

The Debtor borrowed $273,000 from LANB in March 2007 (Personal Loan). 

LANB secured the Personal Loan with a mortgage against the Debtor’s residence in

Santa Fe, New Mexico. The Debtor defaulted on the Personal Loan in March 2010. The 

Debtor and LANB executed a modification agreement, re-amortizing the principal 

balance of, and accrued interest on, the Personal Loan.

C. LANB’s Collection Actions and the Debtor’s Bankruptcy

By the spring of 2011, the Debtor and PBA had defaulted on the Business, 

Personal, and Short Term Loans and all subsequent renewals. Accordingly, LANB sent a 

notice of default in April 2011. The Debtor held six personal bank accounts with LANB,

and PBA held two business bank accounts. The deposit account agreements authorized 

LANB to freeze and offset account balances against outstanding obligations. In early 

June 2011, LANB froze the Debtor’s and PBA’s bank accounts and offset $3,840.62

from those bank account balances on account of the outstanding obligations.3

LANB filed a state court foreclosure action against PBA and the Santa Fe 

commercial property to recover on the Business and Short Term Loans in July 2011. The 

 3 LANB initially offset $5,570.13, but returned $1,729.51 upon discovering it was 

drafted from a joint account held by the Debtor and his daughter.
4

Debtor and PBA paid off the balance of the Business and Short Term Loans in November 

2011, and LANB dismissed the foreclosure action. 

LANB also filed a state court foreclosure action against the Debtor and his Santa 

Fe residence to recover on the Personal Loan in August 2011. The Debtor filed his 

bankruptcy case on February 24, 2012, staying the foreclosure. The Debtor received a 

discharge on June 6, 2012, and the case closed later that month on June 18. The Debtor 

reopened the case nine days later on June 27, alleging LANB had violated the automatic 

stay. While the case was reopened, the Debtor amended his schedules to list his interest 

in PBA, valuing it at $1, and to list a claim against LANB for wrongful foreclosure, also 

valuing it at $1. The state court entered a final foreclosure judgment in August 2016, and 

the foreclosure sale of the Debtor’s home occurred in September 2016. LANB filed a 

proof of claim for approximately $164,259 on account of the deficiency resulting from 

that sale.

In February 2017, the Debtor filed a state court lawsuit against LANB alleging 

thirteen claims relating to the Business Loan and setoff. The Debtor alleged that LANB 

had breached the terms of the Business Loan and renewals4 and that the offsets from his 

bank accounts constituted conversion. 

In the meantime, the Debtor’s bankruptcy case closed and reopened three times, 

the last of which occurred in March 2017. Yvette Gonzales was appointed as Chapter 7 

 4 The Debtor claimed the purpose of the modification was to extend the maturity 

date and that he did not learn of LANB’s misrepresentations until January 2016. Exhibit 

D, Affidavit of George Velasquez at 1-4, in Appellant’s App. at 163-66. 
5

trustee (Trustee). The Debtor amended his schedules to value his claims against LANB at 

$6,748. He also amended his Schedule C to exempt any recovery on the claims against 

LANB.5 The Trustee investigated the lawsuit against LANB and the parties began

settlement negotiations. 

D. The Motion to Approve Compromise

The Trustee filed the Motion to Approve Compromise of Controversy on 

December 11, 2017 (Motion to Compromise).6 The Trustee and LANB proposed to settle 

the estate’s claims against LANB in exchange for payment of $10,000 to the estate and 

waiver of LANB’s $164,259 proof of claim. The Debtor filed his Objection to Motion to 

Approve Compromise of Controversy (Objection) on January 2, 2018.7 At a preliminary 

hearing on April 9, 2018, the Bankruptcy Court set a discovery deadline of June 4, 2018, 

and scheduled a final hearing on the Motion to Compromise for June 20, 2018. 

LANB and the Debtor agreed to an informal extension of discovery deadlines until 

June 8, 2018. After receiving LANB’s discovery responses on June 8, the Debtor filed a 

motion to continue the hearing (Motion to Continue), arguing he needed an additional 

two weeks to review the responses. LANB objected to the Motion to Continue and the 

Bankruptcy Court held a hearing to address the matter on June 18, 2018. The Bankruptcy 

 5 The Debtor stipulated to the denial of his claim of exemption of any award for the 

claims against LANB in September 2017. 

6 Appellant’s App. at 135. 

7 Appellant’s App. at 142. 
6

Court denied the Motion to Continue the same day, requiring the Debtor to tender his 

witness list by June 18 at 5:00 pm and his exhibit list by June 19 at 5:00 pm.

The Bankruptcy Court proceeded with the hearing on the Motion to Compromise 

on June 20, as scheduled. At that hearing the Debtor testified that he was unaware the 

maturity date of the Business Loan had been reduced by the renewals and he suggested 

that LANB had fraudulently foreclosed based on altered notes. He also testified that he 

had suffered damages in the form of lost business profits as a result of the account freeze 

and offset, estimating his damages between $15,000,000 and $30,000,000. 

The Trustee testified that, after evaluating the Debtor’s claims against LANB, she

believed the likelihood of success on the claims was “slim to none.”8 Furthermore, she 

did not believe the Debtor’s claim that LANB had misrepresented the maturity date was

credible or that his damage claim could be supported. Finally, the Trustee testified that 

she believed the compromise to be in the best interest of creditors because it removed the 

largest unsecured claim from the estate, allowing remaining creditors to receive a 

distribution of over fifty percent.

The Bankruptcy Court made its findings of fact and conclusions of law on the 

record at a July 6, 2018 hearing.9 The Bankruptcy Court did not find the Debtor’s 

testimony credible, observing that because the maturity dates were “not buried in the fine 

print, but [were] set out very plainly at the top of the note,” the Debtor, a sophisticated 

 8 Tr. June 20, 2018 Hearing at 7, in Appellant’s App. at 207.

9 Tr. July 6, 2018 Hearing, in Appellant’s App. at 228.
7

businessman, should have had knowledge of them.10 Furthermore, the Bankruptcy Court 

took issue with the Debtor’s $6,748 scheduled valuation of his claims against LANB 

compared to his testimony that he suffered up to $30,000,000 in damages.

The Bankruptcy Court applied the four factors from Kopp v. All American Life 

Insurance Company (In re Kopexa Realty Venture Company)11—which are widely 

referred to in this Circuit as the Kopexa factors—and concluded that (1) the Trustee 

would be unlikely to prevail on the claims; (2) a resulting judgment might only net 

$25,000 or so for creditors; (3) litigation would require counsel and expert witnesses, 

making pursuit of the claims cost-prohibitive; and (4) creditors had “more to gain with 

greater certainty through the settlement.”12 The Bankruptcy Court entered the Order 

Granting Trustee’s Motion to Approve Compromise of Controversy on July 6, 2018 

(Order Approving Compromise).13

II. JURISDICTION AND STANDARD OF REVIEW

“With the consent of the parties, this Court has jurisdiction to hear timely-filed 

appeals from ‘final judgments, orders, and decrees’ of bankruptcy courts within the Tenth 

Circuit.”14 An order granting a motion to approve a compromise of claims is final for 

 10 Tr. July 6, 2018 Hearing at 9-10, in Appellant’s App. at 231.

11 213 B.R. 1020 (10th Cir. BAP 1997).

12 Tr. July 6, 2018 Hearing at 19, in Appellant’s App. at 233.

13 Appellant’s App. at 199. 

14 Straight v. Wyo. Dep’t of Transp. (In re Straight), 248 B.R. 403, 409 (10th Cir. 

BAP 2000) (first quoting 28 U.S.C. § 158(a)(1), and then citing 28 U.S.C. § 158(b)(1), 

(c)(1) and Fed. R. Bankr. P. 8002).
8

purposes of 28 U.S.C. § 158(a)(3).15 None of the parties in this case elected for this

appeal to be heard by the United States District Court for the District of New Mexico 

pursuant to 28 U.S.C. § 158(c). Accordingly, this Court has jurisdiction over this appeal.

We review a bankruptcy court’s approval of a settlement agreement brought 

pursuant to Federal Rule of Bankruptcy Procedure Rule 901916 for an abuse of 

discretion.17 “Under the abuse of discretion standard[,] a trial court’s decision will not be 

disturbed unless the appellate court has a definite and firm conviction that the lower court 

made a clear error of judgment or exceeded the bounds of permissible choice in the 

circumstances.”18 An abuse of discretion occurs when a trial court “makes an ‘arbitrary, 

capricious or whimsical,’ or ‘manifestly unreasonable judgment.’”19 “A clear example of 

an abuse of discretion exists where the trial court fails to consider the applicable legal 

standard or the facts upon which the exercise of its discretionary judgment is based.”20

We review a bankruptcy court’s findings of fact for clear error. “A factual finding 

is ‘clearly erroneous’ when ‘it is without factual support in the record, or if the appellate 

court, after reviewing all the evidence, is left with the definite and firm conviction that a 

 15 See Korngold v. Loyd (In re S. Med. Arts Cos.), 343 B.R. 250, 254 (10th Cir. BAP 

2006).

16 All references to Rule or Rules are to the Federal Rules of Bankruptcy Procedure 

unless otherwise indicated.

17 In re S. Med. Arts Cos., 343 B.R. at 256.

18 Arenas v. U.S. Tr. (In re Arenas), 535 B.R. 845, 849 (10th Cir. BAP 2015) 

(quoting Moothart v. Bell, 21 F.3d 1499, 1504 (10th Cir. 1994)).

19 Id. (quoting Moothart, 21 F.3d at 1504-05).

20 Jackson v. Los Lunas Cmty. Program, 880 F.3d 1176, 1191 (10th Cir. 2018) 

(quoting Ohlander v. Larson, 114 F.3d 1531, 1537 (10th Cir. 1997)). 
9

mistake has been made.’”21 But if the bankruptcy court’s “factual findings are premised 

on improper legal standards or on proper ones improperly applied, they are not entitled to 

the protection of the clearly erroneous standard, but are subject to de novo review.”22 

We review questions of law de novo, which “requires an independent 

determination of the issues, giving no special weight to the bankruptcy court’s 

decision.”23

III. DISCUSSION

A. The Applicable Law 

Rule 9019(a) governs approval of a compromise or settlement. But that rule only 

provides the procedure used to obtain that approval; it does not contain the standard by 

which courts evaluate compromises or settlements. Nor does the Bankruptcy Code offer 

any statutory guidance on that front. The development of this area of the law has been left 

to the courts. 

The Tenth Circuit Court of Appeals has not yet issued a published decision 

addressing what standard a Rule 9019 settlement must achieve before it can be approved. 

Even though there is no controlling circuit law on the subject, the Tenth Circuit has stated 

 21 LTF Real Estate Co. v. Expert S. Tulsa, LLC (In re Expert S. Tulsa, LLC), 522 

B.R. 634, 643 (10th Cir. BAP 2014) (quoting Las Vegas Ice & Cold Storage Co. v. Far 

W. Bank), 893 F.2d 1182, 1185 (10th Cir. 1990)). 

22 Minerals Techs., Inc. v. Novinda Corp. (In re Novinda Corp.), 585 B.R. 145, 152 

(10th Cir. BAP 2018) (quoting Osborn v. Durant Bank & Tr. Co. (In re Osborn), 24 F.3d 

1199, 1203 (10th Cir. 1994), abrogated in part on other grounds by Eastman v. Union 

Pac. R.R., 493 F.3d 1151 (10th Cir. 2007)). 

23 In re Expert S. Tulsa, LLC, 522 B.R. at 643 (citing Salve Regina Coll. v. Russell), 

499 U.S. 225, 238 (1991)). 
10

in a handful of unpublished decisions that “[a] court’s general charge is to determine 

whether the settlement is fair and equitable and in the best interests of the estate.”24 Put 

another way, the court should “review the issues and determine whether the settlement 

falls below the lowest point in the range of reasonableness.”25 In reaching this 

determination, a court need not conduct a mini-trial or decide the numerous questions of 

law and fact,26 but its decision to approve a settlement “must be an informed one based 

upon an objective evaluation of developed facts.”27

To fulfill the duties articulated by the Tenth Circuit, bankruptcy courts in this 

Circuit invariably, if not inveterately, review Rule 9019 settlements through the lens of 

the Kopexa factors. But there is no binding precedent that requires analyses of such 

settlements to use those factors. The Tenth Circuit has never endorsed them in a 

published decision, likely because parties have not presented the factors’ applicability as 

 24 Rich Dad Operating Co. v. Zubrod (In re Rich Global, LLC), 652 F. App’x 625, 

631 (10th Cir. 2016) (unpublished) (citing Official Comm. of Unsecured Creditors of W. 

Pac. Airlines, Inc. v. W. Pac. Airlines, Inc. (In re W. Pac. Airlines, Inc.), 219 B.R. 575, 

579 (D. Colo. 1998)). Under the Tenth Circuit Rules, unpublished decisions, such as In re 

Rich Global, LLC, “are not precedential, but may be cited for their persuasive value.” 

10th Cir. R. 32.1(A). 

25 In re Rich Global, LLC, 652 F. App’x at 631 (quoting 8 Norton Bankruptcy Law & 

Practice § 167:2 (3d ed. 2011)). 

26 E.g., In re Brutsche, 500 B.R. 62, 71 (Bankr. D.N.M. 2013). 

27 Korngold v. Loyd (In re S. Med. Arts Cos.), 343 B.R. 250, 256 (10th Cir. BAP 

2006) (quoting Reiss v. Hagmann, 881 F.2d 890, 892 (10th Cir. 1989)); see also 

Armstrong v. Rushton (In re Armstrong), 285 B.R. 344, 2002 WL 471332, at *2 (10th 

Cir. BAP Mar. 28 2002) (unpublished) (“There can be no informed and independent 

judgment as to whether a proposed compromise is fair and equitable until the bankruptcy 

judge has apprised himself of all facts necessary for an intelligent and objective opinion 

of the probabilities of ultimate success should the claim be litigated.” (quoting Protective 

Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 

424 (1968))), aff’d, 99 F. App’x 210 (10th Cir. 2004) (unpublished).
11

an issue on appeal.

28 Even our own prior decisions leave some uncertainty regarding

whether the Kopexa factors constitute an exhaustive list of criteria. Kopexa itself merely 

stated that it is appropriate to consider the four now well-known factors in evaluating 

settlements; it did not mandate their application or exclude others.

29 But in 2006 this 

Court issued a decision that characterized Kopexa as having “adopted” the four-factor test 

“for evaluating the factual circumstances of a compromise.”30

We have not revisited the issue in a published decision since that time, but in a 

series of unpublished decisions the BAP incrementally advanced towards mandatory 

application of the Kopexa factors,31 finally reaching that position in Isho v. Loveridge (In 

re Isho).

32 In that case, we held that bankruptcy courts must consider the Kopexa factors 

in reviewing proposed settlements, though there was no discussion of whether additional 

 28 See, e.g., In re Rich Global, LLC, 652 F. App’x at 631 (“The parties do not argue 

that the bankruptcy court erred in identifying [the Kopexa factors] as the appropriate 

factors, and so we assume without deciding that they are.”). In fact, the only published 

Tenth Circuit opinion to cite Kopexa, Scott v. King (In re Amerson), 839 F.3d 1290 (10th 

Cir. 2016), did not have occasion to address whether the Kopexa factors are the correct 

standard by which to evaluate Rule 9019 settlements because the appellant did not raise 

the issue. See In re Amerson, 839 F.3d at 1298. 

29 See Kopp v. All American Life Insurance Company (In re Kopexa Realty Venture 

Company), 213 B.R. 1020, 1022 (10th Cir. BAP 1997).

30 In re S. Med. Arts Cos., 343 B.R. at 256. 31 See Allen v. Loveridge (In re Log Furniture, Inc.), 356 B.R. 787, 2007 WL 

496784, at *3 (10th Cir. BAP Feb. 16, 2007) (unpublished) (stating that the “[f]actors to 

consider” in approving a settlement agreement are the Kopexa factors), aff’d 257 F. 

App’x 101 (10th Cir. 2007) (unpublished); Lewis v. McCallum (In re Lewis), 378 B.R. 

418, 2007 WL 2189343, at *4 (10th Cir. BAP July 31, 2007) (repeating the “adopted” 

language of Southern Medical Arts). 

32 498 B.R. 391, 2013 WL 1386208 (10th Cir. BAP Apr. 5, 2013) (unpublished). 
12

factors could apply.

33 Subsequent decisions have reached the same conclusion.34

Although there is no controlling circuit law requiring the application of the Kopexa 

factors on the one hand or precluding consideration of supernumerary factors on the 

other, we conclude that using the Kopexa factors in evaluating Rule 9019 settlements is 

consistent with the standard stated by the Tenth Circuit in Rich Global. 

As stated previously, the Kopexa factors are: “[1] the probable success of the 

underlying litigation on the merits, [2] the possible difficulty in collection of a judgment,

[3] the complexity and expense of the litigation, and [4] the interests of creditors in 

deference to their reasonable views.”35 “[T]he court need not resolve all of these issues, 

but must only identify them ‘so that the reasonableness of the settlement may be 

evaluated.’”36

B. Application of Controlling Law 

The Bankruptcy Court applied the Kopexa factors, concluding that they weighed 

in favor of approving the settlement agreement. After reviewing the Order Approving 

 33 Id. at *3. In fact, the Isho panel did not have reason to address whether the Kopexa 

factors had been satisfied; it summarily affirmed the bankruptcy court’s approval of the 

settlement because the appellant failed to provide an adequate record for review on that 

issue. Id. at *4. 

34 See Amerson v. King (In re Amerson), No. CO-14-045, 2015 WL 5162763, at *7 

(10th Cir. BAP Sept. 2, 2015) (unpublished) (“The Tenth Circuit standard for 

determining whether a settlement in a bankruptcy case should be approved is a four-part 

test articulated by this Court in [Kopexa].”), aff’d sub nom. Scott v. King (In re Amerson), 

839 F.3d 1290 (10th Cir. 2016); Brumfiel v. Lewis (In re Brumfiel), No. CO-15-014, 2015 

WL 5895213, at *7 (10th Cir. BAP Oct. 8, 2015) (unpublished) (same).

35 In re Kopexa Realty Venture Co., 213 B.R. at 1022 (citations omitted). 

36 Official Comm. of Unsecured Creditors of W. Pac. Airlines, Inc. v. W. Pac. 

Airlines, Inc. (In re W. Pac. Airlines, Inc.), 219 B.R. 575, 579 (D. Colo. 1998) (quoting In 

re The Hermitage Inn, Inc., 66 B.R. 71, 72 (Bankr. D. Colo. 1986)).
13

Compromise, we are not left with a definite and firm conviction that the Bankruptcy 

Court made a clear error of judgment or exceeded the bounds of permissible choice under 

the circumstances. However, as the Debtor assigns multiple errors to the Bankruptcy 

Court’s findings and conclusions, we review each assignment of error in turn, beginning 

with the Bankruptcy Court’s analysis of the Kopexa factors.

1. Factor 1: The Probable Success of the Underlying Litigation 

The Debtor argues that the Bankruptcy Court disproportionately emphasized

circumstances that diminished the likelihood of success of the litigation. First, the Debtor 

argues the Bankruptcy Court incorrectly applied the four-year statute of limitations for 

oral contracts instead of the six-year statute for written contracts. In particular, he asserts 

that because the Business Loan and subsequent renewals are ambiguous, evidence of 

contemporaneous oral agreements would be allowed to interpret the written contract. And 

since contemporaneous oral agreements of an ambiguous contract merge into the written 

agreement, the Debtor concludes that the six-year statute of limitations applies.37 The 

Debtor argues “there is no question that the contract is ambiguous” because “the contract 

states plainly that its purpose is to extend the maturity date of the loan.”38 However, the 

June Renewal of the Business Loan modified the maturity date to December 1, 2010. 

Therefore, as the June Renewal eliminated the thirty-year term, the December Renewal 

 37 Mark V, Inc. v. Mellekas, 845 P.2d 1232, 1235 (N.M. 1993) (“The court may 

consider collateral evidence of the circumstances surrounding the execution of the 

agreement in determining whether the language of the agreement is unclear.” (citing C.R. 

Anthony Co. v. Loretto Mall Partners, 817 P.2d 238, 242-43 (N.M. 1991))). 

38 Appellant’s Br. 17. 
14

served to extend the maturity date from December 1, 2010, to April 1, 2011. Regardless, 

the Bankruptcy Court correctly identified the statute of limitations defense, at the very 

least, as an impediment to the Trustee’s success in the litigation.39

Next, the Debtor argues that the Bankruptcy Court erred in assessing his

credibility and finding no evidence of fraud in the acceleration of the maturity date. We

defer to the Bankruptcy Court’s judgment of a witness’s credibility.40 In addition to its 

assessment of the Debtor’s testimony, the Bankruptcy Court based its credibility findings 

on the Debtor’s own contradictions, noting that he scheduled the value of the litigation 

claims at $6,748 but testified he suffered approximately $30,000,000 in damages. The 

record supports this finding. With respect to the Debtor’s fraud claim, he argues that the 

Bankruptcy Court failed to consider the twenty-year banking relationship he had with

LANB, which he claims lends credibility to his “contention that he was advised by 

LANB the renewal agreement was . . . an agreement extending the maturity date.”41

Although courts may rely on circumstantial evidence to deduce fraudulent intent,42 the 

banking relationship is insufficient to support the Debtor’s claim of fraud. The 

Bankruptcy Court’s decision must “bear a ‘rational relationship to the supportive 

 39 See In re W. Pac. Airlines, Inc., 219 B.R. at 579 (explaining the bankruptcy court 

is not required to resolve issues but only identify and weigh them as factors).

40 See Fed. R. Civ. P. 52(a)(6), made applicable in adversary proceedings by Fed. R. 

Bankr. P. 7052; Gillman v. Ford (In re Ford), 492 F.3d 1148, 1157 (10th Cir. 2007) 

(“When findings are based on determinations regarding the credibility of witnesses, [Fed. 

R. Civ. P.] 52(a) demands even greater deference to the trial court’s findings.” (quoting 

Dalton v. IRS, 77 F.3d 1297, 1302 (10th Cir. 1996))).

41 Appellant’s Br. 19. 

42 Job v. Calder (In re Calder), 907 F.2d 953, 956 (10th Cir. 1990).
15

evidentiary data.’”43 It is clear from the record that LANB worked with the Debtor, 

providing him two extensions on the acceleration of the Business Loan. Furthermore, 

LANB’s subsequent foreclosure suggests that it intended to collect on the defaulted 

obligation despite the longstanding relationship.

The Debtor also assigns error to the Bankruptcy Court’s conclusion that the claims 

were likely barred by a preclusion doctrine. The Debtor points out that LANB and the 

Trustee argued the claims were mandatory counterclaims in the foreclosure of the 

Personal Loan, not the Business Loan. The Bankruptcy Court admitted such a defense 

may not be “bulletproof” because LANB’s initial foreclosure claim subject to mandatory 

counterclaims was dismissed. Thus, the Bankruptcy Court did not place substantial 

weight on this defense but instead recognized it as an additional nuisance the Trustee 

would have to overcome to prevail on the estate’s claims.

Finally, the Debtor argues the Bankruptcy Court erred in (1) determining LANB 

was entitled to offset; and (2) failing to recognize the account freeze was just as harmful 

as the offset. The record does not support the suggestion the Debtor was not in default. 

The promissory notes and subsequent renewals evidence the maturity dates on their face

and the Debtor’s uncorroborated and incredible testimony does not suggest otherwise.

Furthermore, the Debtor admitted to defaulting on the Business, Personal, and Short 

Term Loans in an affidavit attached to the Objection. Accordingly, even if the 

 43 In re Ford, 492 F.3d at 1157 (quoting Gillman v. Sci. Research Prods. Inc. of Del.

(In re Mama D’Angelo, Inc.), 55 F.3d 552, 555 (10th Cir. 1995)). 
16

Bankruptcy Court failed to consider the impact of the account freeze, nothing in the 

records supports finding the freeze was unauthorized. Thus, the Debtor’s argument fails.

 2. Factor 2: The Possible Difficulty in Collection of a Judgment

The Debtor asserts the Bankruptcy Court did not analyze the difficulty of 

collecting on a judgment but instead suggested recovery must exceed $400,000 to offer a 

greater distribution to creditors than under the settlement. While analysis of the second 

factor typically focuses on the defendant’s ability to pay, it can also encompass problems 

that the Bankruptcy Court identified, including costs that would have to be incurred in 

pursuing the judgment.44 Those costs undoubtedly make collection more difficult, and we 

assign no error to the Bankruptcy Court’s consideration of those costs. But even if the 

second Kopexa factor refers exclusively to the defendant’s ability to pay, “the court need 

not resolve all of [the factors] but must only identify them ‘so that the reasonableness of 

 44 Analysis of the second factor in this case acutely brings to the forefront the 

question of whether the Kopexa factors are exhaustive. As a contrast to Kopexa, the court 

In re Remsen Partners, Ltd., 294 B.R. 557 (Bankr. S.D.N.Y. 2003), for example, phrased 

the second factor as “the difficulties, if any, to be encountered in the matter of 

collection.” Id. at 565. The use of the plural broadens the categories of problems parties 

and bankruptcy courts may consider in evaluating the second factor. As the Bankruptcy 

Court’s analysis in this case demonstrates, problems other than the defendant’s ability to 

pay can be relevant to the Rule 9019 inquiry. Reading Kopexa—with its singular 

“difficulty”—to refer only to the defendant’s ability to pay could ignore other 

collectability issues that may bear on the reasonableness of settlement and therefore 

circumscribe a judge’s purview. We do not read “difficulty” so narrowly and, indeed, 

have on occasion used the plural form in prior decisions. See Lewis v. McCallum (In re 

Lewis), 378 B.R. 418, 2007 WL 2189343, at *4 (10th Cir. BAP July 31, 2007) 

(unpublished) (rendering the second Kopexa factor as the “possible problems in 

collecting the judgment”). But these interpretative problems highlight the need to answer 

the question whether Kopexa’s standard must be followed to the letter, or whether its 

factors can be modified or even added to. 
17

the settlement may be evaluated.’”45 Failure to consider the defendant’s ability to pay, by 

itself, is not grounds for reversal. 

Moreover, the Bankruptcy Court’s discussion of the second factor goes to the 

heart of the Rule 9019 inquiry: a cost-benefit analysis.

46 The Bankruptcy Court’s review 

of the cost-benefit analysis contributed to its decision to approve the settlement, and we 

find no error with that analysis. 

3. Factor 3: The Complexity and Expense of the Litigation

The Debtor assigns error to the Bankruptcy Court’s conclusion that hiring expert 

witnesses and counsel would be cost-prohibitive. The Debtor argues his experience as a 

“sophisticated businessman” qualified him to serve as an expert on damages.47 Again, we 

defer to the Bankruptcy Court’s findings as to the Debtor’s credibility, and the record 

does not persuade us to believe the Debtor’s unsupported testimony regarding potential 

damages. The Debtor also suggests the Trustee could prosecute the claims herself instead 

of hiring counsel. This argument also asks the Court to substitute its judgment for the 

judgment of the Bankruptcy Court, which we determine made an informed decision 

based on an objective analysis of the facts. No matter which counsel pursued the claims 

against LANB, it would not be done without compensation. The Trustee considered 

 45 In re W. Pac. Airlines, Inc., 219 B.R. at 579 (quoting In re The Hermitage Inn, 

Inc., 66 B.R. at 72). 

46 See Suter v. Goedert, 396 B.R. 535, 547-48 (D. Nev. 2008). 47 Appellant’s Br. 26.
18

prosecution of the claims cost-prohibitive based on the likelihood of success on the 

merits and the Bankruptcy Court agreed. We see no reason to overturn this finding.48

4. Factor 4: The Interest of Creditors

The Debtor argues the Bankruptcy Court erred in concluding that a settlement for 

$10,000 was in the creditors’ best interest when potential damages exceeded total claims.

The Debtor’s arguments highlight the conflict between his personal interests and the 

Trustee’s duty to maximize the estate.49 The only evidence to support the Debtor’s 

valuation of the claims is his uncorroborated testimony that damages were between 

$15,000,000 and $30,000,000. However, the Bankruptcy Court found the Debtor’s 

scheduled valuation of the claims—$6,748—contradicted his later testimony. 

Furthermore, the Debtor testified he was not willing to purchase the claims from the 

bankruptcy estate despite their purported value, casting doubt on his valuation. These 

findings are not clearly erroneous. 

The Debtor’s argument also discounts the withdrawal of LANB’s $164,259 claim 

in addition to payment of $10,000. The Trustee testified that the only remaining claims 

were for credit card debt totaling approximately $7,300, and none of the holders of those

 48 See, e.g., Kowal v. Malkemus (In re Thompson), 965 F.2d 1136, 1146 (1st Cir. 

1992) (“[I]t is not surprising that appellants are attracted by the glitter of further litigation 

financed at the expense of the chapter 7 estate . . . . [I]t is apparent that appellants’ 

intuitive confidence in their own ability to outguess the chapter 7 trustee’s settlement 

decision . . . has more . . . to do with the insignificance of their stake in the settlement.”). 

49 Id. (“[The debtors’] purpose is inapposite to the duty imposed on a chapter 7 

trustee under the [Bankruptcy] Code, since it is not so much the interests of the chapter 7 

estate, as it is their self-interest, which [they] would have the chapter 7 trustee champion 

by refusing to settle the . . . litigation.”). 
19

claims objected to the settlement. Since the withdrawal of LANB’s claim substantially 

increased the distribution to the remaining creditors, approval of the settlement was in the 

best interest of the estate and the Bankruptcy Court did not abuse its discretion in 

concluding that creditors “stand more to gain with greater certainty through the 

settlement.”50

5. Remaining Findings and Conclusions

The Debtor also argues the Bankruptcy Court erred in finding the Debtor had 

knowledge of the modified maturity dates and concluding the Debtor was liable for 

PBA’s debts. The Debtor mischaracterizes the Bankruptcy Court’s findings: instead of 

finding the Debtor knew of the modified maturity dates, the Bankruptcy Court found the 

Debtor “should have known” of the dates as his signature was on the documents he 

signed and LANB instituted foreclosure proceedings.51 The Debtor argues LANB did not 

authenticate any of the promissory notes or renewals. However, the Debtor did not object 

 50 Tr. July 6, 2018 Hearing at 19, in Appellant’s App. at 233. See Slovak Republic v. 

Loveridge (In re EuroGas, Inc.), 755 F. App’x 825, 833 (10th Cir. 2019) (unpublished)

(affirming approval of settlement that eliminated $113,000,000 in burdensome claims and 

providing payment of $250,000); Korngold v. Loyd (In re S. Med. Arts Cos.), 343 B.R. 

250, 257-58 (10th Cir. BAP 2006) (finding no abuse of discretion where settlement 

provided 60% distribution to creditors that otherwise would have received nothing); 

Geltzer v. Original Soupman Inc. (In re Soup Kitchen Int’l Inc.), 506 B.R. 29, 43 (Bankr. 

E.D.N.Y. 2014) (approving settlement that allowed unsecured creditors to receive a 43% 

distribution on their claims).

51 Tr. July 6, 2018 Hearing at 15, in Appellant’s App. at 232. 
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to the admission of the promissory notes or renewals and such documents are selfauthenticating pursuant to Federal Rule of Evidence 902(9).52

The Debtor also argues that N.M. Stat. Ann 1978 § 53-11-4.1 shielded him from 

liability for PBA’s debts. However, the Debtor’s personal guaranty of PBA’s debts is in 

the record and included “any extensions, renewals, modifications and substitutions” of 

the original debt.53 The Debtor did not object to the Bankruptcy Court’s review of the 

personal guaranty. Therefore, the Bankruptcy Court’s finding that the Debtor guaranteed 

PBA’s obligations is not clear error, and the Debtor’s argument fails.

6. Denial of Motion to Continue Hearing

Finally, the Debtor argues the Bankruptcy Court erred in denying his Motion to 

Continue. Denial of a motion to continue is reviewed for an abuse of discretion, and 

reversal is not appropriate unless “the denial was arbitrary or unreasonable and materially 

prejudiced the appellant.”54 The Tenth Circuit provides several factors to consider in 

determining whether denial of a continuance constitutes an abuse of discretion. Those 

factors include:

the diligence of the party requesting the continuance; the likelihood that the 

continuance, if granted, would accomplish the purpose underlying the party’s 

expressed need for the continuance; the inconvenience to the opposing party, 

its witnesses, and the court resulting from the continuance; [and] the need 

 52 Niederquell v. Bank of Am. N.A., 696 F. App’x 321, 324 (10th Cir. 2017) (citing 

31 Charles Alan Wright & Arthur R. Miller, Fed. Practice and Pro. § 7143 (1st ed. 

2017)). 

53 Exhibit I to Amended Complaint for Foreclosure of Mortgages and For Debt and 

Money Due, Guaranty at 1, in Appellant’s App. at 64. 

54 Rogers v. Andrus Transp. Servs., 502 F.3d 1147, 1151 (10th Cir. 2007) (quoting

United States v. West, 828 F.2d 1468, 1469 (10th Cir. 1987)). 
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asserted for the continuance and the harm that appellant might suffer as a 

result of the [bankruptcy] court’s denial of the continuance.

55

The Debtor argues he did not have sufficient time to review the renewal notes 

prior to the hearing based on LANB’s delays in turning them over. Yet these documents 

were not new to the Debtor as they bear his signature and served as the basis of LANB’s 

July 2011 foreclosure action. Furthermore, the Debtor failed to provide a transcript of the 

hearing on the Motion to Continue in the record, thus we summarily affirm the denial of 

the Motion to Continue.

56

IV. CONCLUSION

The Bankruptcy Court developed facts and made an objective evaluation of those 

facts, as required by Tenth Circuit law, in reviewing the proposed settlement. Its 

conclusion that the settlement fell well within the range of reasonableness was informed 

by an analysis of the Kopexa factors. We assign no error to the use of those factors, the 

Bankruptcy Court’s application of them to the facts of this case, or the Bankruptcy 

Court’s ultimate decision to grant the Motion to Compromise and approve the underlying 

settlement. Because we do not have a definite and firm conviction that the Bankruptcy 

 55 Id. (quoting West, 828 F.2d at 1470). 

56 Tollefsen v. US Bank Nat’l Ass’n (In re Tollefsen), No. NO-07-057, 2008 WL 

762487, at *1 (10th Cir. BAP Mar. 11, 2008) (unpublished) (“[T]he failure to provide a 

trial transcript on appeal warrants affirming the trial court when the issue on appeal 

requires the appellate court to review the record in the trial court.” (citing McGinnis v. 

Gustafson, 978 F.2d 1199, 1201 (10th Cir. 1992))); OU Fed. Credit Union v. Inkster (In 

re Inkster), Nos. WO-00-063, 00-12923, 2001 WL 169758, at *2 (10th Cir. BAP Feb. 21, 

2001) (unpublished) (“Without a transcript, we have an inadequate record, giving us 

grounds to summarily affirm the bankruptcy court.”). 
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Court made a clear error of judgment or exceeded the bounds of permissible choice in the 

circumstances, the Order Approving Settlement is AFFIRMED.