Opinion ID: 465409
Heading Depth: 3
Heading Rank: 3

Heading: Fairness of the Settlement Agreement.

Text: 38 Appellants claim that the bankruptcy court abused its discretion in approving the settlement agreement and compromise in the absence of a record which provides an adequate analysis of its merits. A court may approve a compromise or settlement only when it is fair and equitable. Matter of Aweco, Inc., 725 F.2d 293, 298 (5th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 244, 83 L.Ed.2d 182 (1984). An approval of a compromise, absent a sufficient factual foundation which establishes that it is fair and equitable, inherently constitutes an abuse of discretion. Id., 105 S.Ct. at 299. However, the record in the case before this court is replete with factors which support the bankruptcy court's approval of the compromise. 39 This is not the case where the bankruptcy judge reached for his stamp and marked approved without some party supplying concrete facts. See Matter of Aweco, 725 F.2d at 300. Appellants argue that neither the court nor the trustee was sufficiently familiar with the ESOT or the Adversary Proceeding D. However, considerable evidence was presented on the ESOT, including its terms and provisions and its valuation. 40 The application to compromise the controversy and the settlement agreement, along with the testimony of hearings on the application, indicate that the court made a full and fair independent assessment of the wisdom of the compromise. Cf. Matter of Boston & Providence Railroad Corp., 673 F.2d 11, 12 (1st Cir.1982). The trustee's application and the settlement agreement set forth in detail the claims pending against the bankrupt estate, and an evaluation of those claims. Furthermore, the findings and order of the bankruptcy court indicate that it made an independent evaluation from the trustee's application and settlement agreement, and from the rest of the proceedings before it. Cf. id. at 12-13. The bankruptcy court did not abuse its discretion in approving the compromise. 41