Opinion ID: 2973187
Heading Depth: 3
Heading Rank: 1

Heading: Settlement and Disbursement Order

Text: “To appeal from an order of the bankruptcy court, appellants must have been directly and adversely affected pecuniarily by the order. This principle, also known as the ‘person aggrieved’ doctrine, limits standing to persons with a financial stake in the bankruptcy court’s order.” S.E.C. v. Basic Energy & Affiliated Res., Inc., 273 F.3d 657, 665 (6th Cir. 2001) (quoting Fidelity Bank, Nat’l Ass’n v. M.M. Group, Inc., 77 F.3d 880, 882 (6th Cir. 1996)). In this case, not only did Appellant acknowledge repeatedly that the proceeds which the chapter 11 trustee proposed to distribute did not belong to him, but also the order authorizing settlement and distribution stated specifically that Appellant’s rights were not affected. Nevertheless, the Panel will address the merits of this appeal. In considering whether to approve a proposed compromise, “[t]he bankruptcy court . . . is obligated to weigh all conflicting interests in deciding whether the compromise is ‘fair and equitable,’ considering such factors as the probability of success on the merits, the complexity and expense of litigation, and the reasonable views of creditors.” Bauer v. Commerce Union Bank, 859 F.2d 438, 441 (6th Cir. 1988); accord, e.g., Reynolds v. Comm’r, 861 F.2d 469, 473 (6th Cir. 1988) (citing Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424, 88 S. Ct. 1157 (1968)). A bankruptcy court’s decision “authorizing the trustee in bankruptcy to enter into a compromise of creditors’ claims rests in the sound discretion of the [bankruptcy] judge. A reviewing court will not disturb or set aside such a compromise unless it 8 obviously achieves such an unjust result as to amount to an abuse of discretion.” Mach. Terminals, Inc. v. Woodward (In re Albert-Harris, Inc.), 313 F.2d 447, 449 (6th Cir. 1963) (citations omitted). Generally, a court “abuses its discretion only when it relies upon clearly erroneous findings of fact or when it improperly applies the law or uses an erroneous legal standard.” Fleischut v. Nixon Detroit Diesel, Inc., 859 F.2d 26, 30 (6th Cir. 1988). “A finding of fact is clearly erroneous ‘when although there is evidence to support it, the reviewing court, on the entire evidence, is left with the definite and firm conviction that a mistake has been committed.’” United States v. Mathews (In re Mathews), 209 B.R. 218, 219 (B.A.P. 6th Cir. 1997) (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S. Ct. 1504, 1511 (1985)). Although the bankruptcy court here did not make specific findings as to whether the compromise was fair and equitable, it is obvious from the transcript of the July 8, 2004, hearing that the court considered numerous factors, including the difficulty in preserving perishable assets, the tensions that existed between some of the parties, and the extent of Deere Credit’s secured claim. In addition, the bankruptcy based its approval of the proposed settlement of the Deere Credit adversary proceeding on a specific finding that the settlement was in the best interest of the estate. See Spectrum Health Continuing Care Group v. Anna Marie Bowling Irrevocable Trust Dated June 27, 2002, 410 F.3d 304, 312 (6th Cir. 2005). Appellant does not directly dispute the bankruptcy court’s conclusions, and, once again, acknowledges that none of the funds subject to disbursement under the settlement are proceeds from crops grown on Timmons Farm. Rather, Appellant challenges the bankruptcy court’s approval of the settlement order on the basis that he may have claims against Deere Credit and the Erin Farms’ estate relating to the loss of the 2003 crop on Timmons Farm. Appellant apparently fears that his right to pursue those claims was cut off by the settlement. The settlement and disbursement order specifically states that it does not prejudice Appellant’s right to assert claims against either the estate or Deere Credit. Appellant’s assertions to the contrary are incorrect. Pursuant to the terms of the settlement and disbursement order, Appellant may assert his claims against the trustee and/or Deere Credit in any appropriate forum, within the applicable limitations period. The record supports the 9 court’s conclusion that the settlement was fair and equitable and in the best interest of the estate. The bankruptcy court did not abuse its discretion in approving the settlement and disbursement order.