Opinion ID: 3163849
Heading Depth: 2
Heading Rank: 5

Heading: the malpractice claim settlement

Text: Shortly before the District Court affirmed the Bankruptcy Court’s approval of the Adversary Settlement, the Trustee separately moved the Bankruptcy Court to settle the Malpractice Claim (“the Malpractice Settlement”).3 Once again relying on his “business judgment,” the Trustee proposed a settlement that would impact the estate as follows: (1) Squire Sanders would pay $210,000 to the estate; (2) the estate would keep Mr. Welt’s $50,000 contribution toward fees (pursuant to the Adversary Settlement); and (3) Squire Sanders would waive any claims it had against the estate. Mr. Ullrich quickly moved to stay the Malpractice Settlement and “all proceedings in this Court” due to his concern about equitable mootness if things went forward. The Bankruptcy Court denied his motion for a stay. 3 Other than a footnote in Mr. Ullrich’s initial brief, the Malpractice Settlement is not mentioned in the record before us. However, we are “free to take judicial notice of subsequent developments in cases that are a matter of public record and are relevant to the appeal.” Rothenberg v. Sec. Mgmt. Co., 667 F.2d 958, 961 n.8 (11th Cir. 1982). The outcome of the Malpractice Claim—one of Nica’s two principal assets and the lawsuit deemed superior by the Settlement Agreement—is directly relevant to this appeal. 7 Case: 14-14685 Date Filed: 12/17/2015 Page: 8 of 21 Mr. Ullrich then objected to the Malpractice Settlement, arguing that the lawsuit was being prematurely settled as well as undervalued, and that the settlement would net little or nothing for Nica’s creditors. He also renewed his request for a stay. Once again, when the Bankruptcy Court held a hearing on the Malpractice Settlement, Mr. Ullrich orally moved for a stay. The Bankruptcy Court did not stay the proceedings and it approved the Malpractice Settlement. Mr. Ullrich persisted. After being told in the written order following the hearing that his oral motion was premature, Mr. Ullrich filed another motion for stay pending appeal. This time the Trustee opposed it, arguing that Mr. Ullrich was actually too late, because the parties already consummated the Malpractice Settlement “[i]mmediately following the Court’s oral ruling.” After a hearing, the Bankruptcy Court denied Mr. Ullrich’s motion for a stay. Squire Sanders has paid the estate and the estate has retained Mr. Welt’s fee contribution under the terms of the Malpractice Settlement, but none of the creditors has been paid anything.