Court Opinion

ID: 4225361
Source: CourtListenerOpinion
Date Created: 2017-12-01 21:00:38.584809+00
Date Added: 2024-06-11T07:47:53.465281
License: Public Domain

FILED
                                 NOT FOR PUBLICATION
                                                                            DEC 1 2017
                       UNITED STATES COURT OF APPEALS                   MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                                 FOR THE NINTH CIRCUIT

In re: WESTERN FUNDING                           No.   16-60048
INCORPORATED; et al.,
                                                 BAP No. 15-1238
               Debtors,

------------------------------                   MEMORANDUM*

GREIF & CO.,

               Appellant,

 v.

BRIAN D. SHAPIRO, Trustee of WFI
Liquidating Trust; et al.,

               Appellees.

                            Appeal from the Ninth Circuit
                             Bankruptcy Appellate Panel
                Dunn, Faris, and Barash, Bankruptcy Judges, Presiding

                        Argued and Submitted October 20, 2017
                              San Francisco, California

      *
        This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: WALLACE and CALLAHAN, Circuit Judges, and RESTANI,** Judge.

      After losing before the Bankruptcy Appellate Panel, Greif & Co. (Greif), a

beneficiary of the WFI Liquidating Trust, appeals to us from a bankruptcy court’s

order approving a $331,476.53 settlement between WFI Trustee Brian Shapiro

(Trustee) and American Express (Amex). The Trustee initiated litigation against

Amex to avoid and recover some two million dollars in allegedly fraudulent

transfers made by WFI. Greif argues the Trustee underestimated the value and

likelihood of success of one of the claims against Amex, which Greif contends

resulted in an unfairly low settlement amount. We have jurisdiction under 28

U.S.C. § 158(d)(1) and we affirm.

      We review for abuse of discretion the bankruptcy court’s approval of a

settlement agreement. In re A & C Props., 784 F.2d 1377, 1380 (9th Cir. 1986). A

bankruptcy court abuses its discretion if it applies the wrong legal standard, or

applies the correct legal standard in a way that is illogical, implausible or

unsupported by the record. See United States v. Hinkson, 585 F.3d 1247, 1263 (9th

Cir. 2009). “[W]here the record supports approval of the compromise, the

      **
          The Honorable Jane A. Restani, Judge for the United States Court of
International Trade, sitting by designation.
                                           2
bankruptcy court should be affirmed.” In re A & C Props., 784 F.2d at 1383

(citation omitted).

      The bankruptcy court did not abuse its discretion by approving the

settlement agreement. Even assuming Greif’s argument that the “fair and

equitable” standard controls, the bankruptcy court explicitly applied that standard

when it assessed the settlement: the court correctly identified the relevant A & C

Properties factors—the probability of success in the litigation; the likely

difficulties in collection; the complexity of the litigation and the expense attending

it; and the paramount interest of the creditors, Id. at 1381—and explained why

these factors weighed in favor of finding the settlement fair and equitable. This

analysis occurred against the backdrop of a comprehensive record, including

Greif’s objection to the motion to approve settlement, the Trustee’s 58-page reply

to the objection (including exhibits), Greif’s supplemental objection to the

settlement (including 597 pages of attachments), the Trustee’s reply to the

supplemental objection (including 161 pages of attachments), and nearly an hour

of oral argument before the bankruptcy judge. In both volume and substance the

record was sufficiently developed and “replete with factors which support the

bankruptcy court’s approval of the compromise.” Id. at 1383.

                                           3
       We reject Greif’s argument that the bankruptcy court did not fully

understand and examine his “employment contract” theory. The record indicates

that Greif’s employment contract theory was fully before the bankruptcy court, and

that the court took Greif’s views into account in assessing the fairness of the

proposed settlement. Greif argues that the bankruptcy court should have adopted

his view of the viability and value of the employment contract claim over the

Trustee’s view, but the bankruptcy court was not required to hold a “mini-trial” on

the merits of each disputed legal question before approving the settlement as fair

and equitable. In re Blair, 538 F.2d 849, 851–52 (9th Cir. 1976). Nor was the court

required to find that the settlement proposed was the best settlement possible. In re

A & C Props., 784 F.2d at 1384 (“As long as the approved plan is fair and

equitable, we cannot reject it in favor of a plan that is more equitable.”) (citation

omitted). Where, as here, the bankruptcy court is “familiar with the entire record,”

and addressed the creditor’s substantive objections “expressly or by necessary

implication,” the court’s approval of the settlement does not constitute an abuse of

discretion. Id.

       For the above reasons, we hold that the bankruptcy court did not abuse its

discretion by approving the Trustee’s motion to approve the settlement agreement.

       AFFIRMED.

                                            4