Opinion ID: 3163849
Heading Depth: 2
Heading Rank: 4

Heading: the settlement hearing and approval

Text: On July 15, 2013, the Bankruptcy Court held a hearing on the Adversary Settlement and Mr. Ullrich’s objections to it. The court ruled, with little analysis, that the Trustee accepted the Adversary Settlement through “the exercise of business judgment,” which “should be upheld.” Specifically, the Bankruptcy Court reasoned that the Adversary Settlement was “in the best interest of the estate and of the creditors generally.” The agreement also subordinated Mr. Welt’s administrative claims and did not release him from liability in his capacity as ABC assignee. The Bankruptcy Court did not discuss the Competing Settlement Offer. Two weeks later, the court issued a summary order granting the Trustee’s motion to proceed with the Adversary Settlement and entered a bar order in favor of Mr. Welt personally. Nica’s creditors got no payout as a result of the Adversary Settlement. The Adversary Proceeding was later dismissed with prejudice. Mr. Ullrich appealed the Bankruptcy Court’s ruling to the District Court. He argued that the Bankruptcy Court erred by failing to treat the Adversary Settlement as an asset sale under 11 U.S.C. § 363—which would require review of competing 6 Case: 14-14685 Date Filed: 12/17/2015 Page: 7 of 21 bids—and by failing to treat the Competing Settlement Offer as a competing bid. The District Court rejected Mr. Ullrich’s arguments, and affirmed the ruling of the Bankruptcy Court. It found that the Bankruptcy Court had evaluated the Adversary Settlement according to the proper factors, even though it had not explicitly discussed the application of each. Mr. Ullrich timely filed this appeal.