Court Opinion

ID: 2965125
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:35:47.108777+00
Date Added: 2024-06-11T15:01:59.881761
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

        No. 97-1381
                        IN RE:  HEALTHCO INTERNATIONAL, INC.,
                                       Debtor,
                                               
                                       ________

                           HICKS, MUSE & CO., INC., et al.,

                                     Appellants,

                                          v.

                           WILLIAM A. BRANDT, JR., TRUSTEE,

                                      Appellee.

                                                     
                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Nathaniel M. Gorton, U.S. District Judge]
                                              ___________________

                                                     
                                 ____________________

                                        Before

                                Stahl, Circuit Judge,
                                       _____________

                       Godbold* and Cyr, Senior Circuit Judges.
                                         _____________________

                                                     
                                 ____________________

             David L. Evans,  with whom Harold  B. Murphy, Daniel J.  Lyne, D.
             ______________             _________________  _______________  __
        Ethan  Jeffery, Hanify & King, Mike McKool, Jr., Jeffrey A. Carter and
        ______________  _____________  ________________  _________________
        McKool Smith were on brief for appellants
        ____________
             David C. Cohn, with  whom David B. Madoff and Cohn  & Kelakos LLP
             _____________             _______________     ___________________
        were on brief for appellee.

                                                     
                                 ____________________

                                  February 12, 1998
                                                     
                                 ____________________

                            
        ____________________

             *Of the Eleventh Circuit, sitting by designation.

                    CYR, Senior Circuit Judge.    The question presented on
                    CYR, Senior Circuit Judge. 
                         ____________________

          appeal  is whether the bankruptcy court  abused its discretion by

          approving a settlement between the chapter 7 trustee for Healthco

          International, Inc. and a consortium of banks  ("the Bank Group")

          which  financed  a  prepetition  leveraged  buy-out   ("LBO")  of

          Healthco by appellants Hicks Muse & Co., Inc. and its coinvestors

          (collectively:  "Hicks Muse").  We affirm.

                                          I
                                          I

                                      BACKGROUND
                                      BACKGROUND
                                      __________

                    Appellant Hicks Muse  financed the 1991 LBO  with a $50

          million term  loan and a  $65 million  revolving credit  facility

          from the  Bank Group,  secured by liens  on all  Healthco assets.

          Healthco filed its chapter 11 petition in June 1993 and continued

          to operate  as a  debtor-in-possession.   Three  months later  an

          interim  trustee  was  appointed   and  the  reorganization   was

          converted to a chapter 7 liquidation.

                    By  the  time  the chapter  7  trustee  ("Trustee") was

          appointed  approximately  one  month   later,  Healthco's  assets

          already  were  undergoing  liquidation  by  the interim  trustee,

          subject  to  bankruptcy  court  approval.    In  the  chapter  11

          schedules the Healthco  assets were valued  at $149 million,  but

          were later  assigned  a liquidation  value  between $33  and  $66

          million.

                    After  obtaining relief  from the  automatic stay,  see
                                                                        ___

          Bankruptcy Code   362, 11 U.S.C.   362, the Bank  Group proceeded

          to  liquidate its Healthco  collateral, having agreed  to provide

                                          2

          the  Trustee with "full, complete, and detailed accounting[s]" of

          the liquidation  on a monthly basis.   Over the ensuing  year the

          Trustee lodged several  complaints, with the  Bank Group and  the

          bankruptcy  court, that  the promised  accountings  had not  been

          forthcoming  or  were  deficient.    Eventually  the  Bank  Group

          submitted  a thirty-page accounting  pursuant to court  order and

          provided   the  Trustee  with  thirty  cartons  of  raw  invoices

          generated during the collateral liquidation process.

                    After declining to incur "the  incredible cost . . . of

          . . . go[ing] through the[se]  records item by item," the Trustee

          commenced an adversary proceeding against Hicks Muse and the Bank

          Group, asserting two principal claims.   First, since the LBO had

          left  Healthco insolvent,  the  Trustee  claimed  that  the  $115

          million lien  obtained by the  Bank Group on the  Healthco assets

          constituted  a  voidable fraudulent  transfer  (hereinafter: "the

          fraudulent  transfer claim").   See Bankruptcy Code    544(b), 11
                                          ___

          U.S.C.   544(b).  Second, the Trustee claimed that the Bank Group

          had  liquidated  its  Healthco  collateral   in  a  "commercially

          unreasonable"  manner, see  Mass. Gen.  Laws Ann.  ch. 106,    9-
                                 ___

          504(3) ("UCC"), which yielded only $50-60 million on  assets with

          an  estimated value  (per chapter  11  schedules) exceeding  $149

          million (hereinafter:  "the UCC claim").

                    The Trustee  subsequently proposed to dismiss  both the

          fraudulent transfer claim  and the UCC claim, see  Fed. R. Bankr.
                                                        ___

                                          3

          P. 9019(a);1 see also Fed. R. Bankr. P. 9014 (contested matters),
                       see also Fed. R. Bankr. P. 9014 (contested matters),
                       ___ ____

          in return  for the Bank  Group's agreement  to pay the  chapter 7
          in return  for the Bank  Group's agreement  to pay the  chapter 7

          estate $9  million in cash,  waive roughly $1 million  in allowed
          estate $9  million in cash,  waive roughly $1 million  in allowed

          priority  claims against the  chapter 7  estate and  a deficiency
          priority  claims against the  chapter 7  estate and  a deficiency

          claim estimated  at $35  million, and assign  to the  Trustee any
          claim estimated  at $35  million, and assign  to the  Trustee any

          LBO-related  claims the  Bank  Group  might  have  against  third
          LBO-related  claims the  Bank  Group  might  have  against  third

          parties,  including  nonsettling   defendants  in  the  adversary
          parties,  including  nonsettling   defendants  in  the  adversary

          proceeding.2  The Trustee in turn agreed not to oppose the $50-60
          proceeding.   

          million secured  claim asserted  by  the Bank  Group against  the

          Healthco collateral.  Several codefendants, including Hicks Muse,

          objected to the settlement.

                    At the hearing before the bankruptcy court, the Trustee

          contended  that the proposed  $45 million settlement  would serve

          the  "best interests"  of  the  chapter 7  estate,  see Kowal  v.
                                                              ___ _____

          Malkemus (In  re Thompson),  965 F.2d 1136,  1141 n.5,  1145 (1st
          ________  _______________

          Cir. 1992), for two reasons.  First, the Trustee pointed out that

          the $45  million offer would  return the chapter 7  estate ninety

          percent of  the $50 million estimated maximum  litigated value of

          the  fraudulent transfer claim, without litigation risk.  Second,

                              
          ____________________

               1Bankruptcy Rule 9019(a) provides: "On motion by the trustee
               1Bankruptcy Rule 9019(a) provides: "On motion by the trustee
          and  after  notice  and  a  hearing,  the  court  may  approve  a
          and  after  notice  and  a  hearing,  the  court  may  approve  a
          compromise or settlement."
          compromise or settlement."

               2Initially the Trustee  proposed that the Bank  Group assign
               2Initially the Trustee  proposed that the Bank  Group assign
          its deficiency  claim to  the Trustee,  but the  bankruptcy court
          its deficiency  claim to  the Trustee,  but the  bankruptcy court
          disapproved  the assignment  as inconsistent  with the  Trustee's
          disapproved  the assignment  as inconsistent  with the  Trustee's
          fiduciary   obligation  to   unsecured  creditors.     The  court
          fiduciary   obligation  to   unsecured  creditors.     The  court
          nonetheless concluded that  an outright waiver of  the deficiency
          nonetheless concluded that  an outright waiver of  the deficiency
          claim would be  permissible.  As appellants do  not challenge the
          claim would be  permissible.  As appellants do  not challenge the
          bankruptcy court ruling in the  latter respect, we do not address
          bankruptcy court ruling in the  latter respect, we do not address
          it.
          it.

                                          4

          the Trustee noted several factors  central to his assessment that

          the UCC claim, fully litigated, could generate only minimal value

          for  the  chapter 7  estate.   See  infra  Section  II.B.1.   The
                                         ___  _____

          bankruptcy  court  approved  the  proposed  settlement  with  one

          pertinent modification.3

                    On  intermediate appeal  to  the district  court, Hicks
                    On  intermediate appeal  to  the district  court, Hicks

          Muse  challenged the bankruptcy court finding that the settlement
          Muse  challenged the bankruptcy court finding that the settlement

          between the  Trustee and  the Bank Group  had been  negotiated in
          between the  Trustee and  the Bank Group  had been  negotiated in

          "good faith."   The  district court ruled  the "good  faith" test
          "good faith."   The  district court ruled  the "good  faith" test

          immaterial under  the "best interests" standard  applicable under
          immaterial under  the "best interests" standard  applicable under

          Bankruptcy Rule 9019,  and opined that a finding  of "good faith"
          Bankruptcy Rule 9019,  and opined that a finding  of "good faith"

          might  be misperceived  by state  courts as  a basis  for barring
          might  be misperceived  by state  courts as  a basis  for barring

          Hicks Muse from pursuing its state-law contribution claim against
          Hicks Muse from pursuing its state-law contribution claim against

          the Bank Group.  In all other respects the bankruptcy court order
          the Bank Group.  In all other respects the bankruptcy court order

          was affirmed by the district court.
          was affirmed by the district court.

                                          II
                                          II

                                      DISCUSSION
                                      DISCUSSION
                                      __________

          A.   Appellate Jurisdiction
          A.   Appellate Jurisdiction
               ______________________

                    The  Trustee contends that  the appeal is  moot because

          Hicks  Muse knowingly disregarded his warning that the settlement

          would be  consummated  promptly  absent a  timeous  stay  of  the

                              
          ____________________

               3The court expressly refrained from determining the validity
               3The court expressly refrained from determining the validity
          vel non of  the Bank Group's purported assignment  to the Trustee
          vel non of  the Bank Group's purported assignment  to the Trustee
          ___ ___
          of its causes  of action against  nonsettling codefendants.   For
          of its causes  of action against  nonsettling codefendants.   For
          post-settlement   procedural  developments   in  this   adversary
          post-settlement   procedural  developments   in  this   adversary
          proceeding, see In re Healthco  Int'l, Inc., 208 B.R. 288 (Bankr.
          proceeding, see In re Healthco  Int'l, Inc., 208 B.R. 288 (Bankr.
                          ___________________________
          D. Mass.  1997); In re  Healthco, 203 B.R.  515 (Bankr. D.  Mass.
          D. Mass.  1997); In re  Healthco, 203 B.R.  515 (Bankr. D.  Mass.
                           _______________
          1996); In re  Healthco, 201 B.R. 19 (Bankr. D. Mass. 1996); In re
          1996); In re  Healthco, 201 B.R. 19 (Bankr. D. Mass. 1996); In re
                 _______________                                      _____
          Healthco, 195 B.R. 971 (Bankr. D. Mass. 1996).
          Healthco, 195 B.R. 971 (Bankr. D. Mass. 1996).
          ________

                                          5

          bankruptcy court order  approving the settlement.   As Hicks Muse

          sought no stay,  the Bank Group promptly disbursed  $9 million to

          the  Trustee, from  which $2.5  million  has since  been used  to

          defray   professional  fees.    Thereafter,  all  claims  in  the

          adversary proceeding against  the Bank Group were  dismissed with

          prejudice.

               1.   Equitable Mootness
               1.   Equitable Mootness
                    __________________

                    The   "equitable   mootness"  doctrine   imports   both

          "equitable"  and  "pragmatic"  limitations   upon  our  appellate

          jurisdiction  over bankruptcy appeals.   See Institut  Pasteur v.
                                                   ___ _________________

          Cambridge Biotech Corp. (In re Cambridge Biotech Corp.), 104 F.3d
          _______________________  _____________________________

          489, 492  n.5 (1st Cir.), cert.  denied, 117 S.  Ct. 2511 (1997);
                                    _____  ______

          Rochman v. Northeast  Utils. Serv. Group (In re  Public Serv. Co.
          _______    _____________________________  _______________________

          of N.H.), 963 F.2d 469, 471 (1st Cir. 1992).
          _______

                    The   equitable   mootness  test  inquires  whether  an

          unwarranted  or  repeated  failure  to  request  a  stay  enabled

          developments to evolve in reliance  on the bankruptcy court order

          to the degree that their remediation has become impracticable  or

          impossible.   Id. at  472.  In  the instant  case, however, Hicks
                        ___

          Muse  neither repeatedly  ignored  its right,  nor  significantly

          delayed utilizing its opportunities, to  seek a stay of the order

          approving the Bank  Group settlement.  Cf. id.  at 472-73 (noting
                                                 ___ ___

          that   appellants   ignored   several   opportunities   to   take

          interlocutory appeals  from orders denying stays  during sixteen-

          month period following confirmation of reorganization plan).

                    Nor  has the Trustee met the "pragmatic" mootness test,

                                          6

          which  contemplates proof  that the  challenged  bankruptcy court

          order   has  been  implemented  to  the  degree  that  meaningful

          appellate  relief  is  no  longer  practicable  even  though  the

          appellant  may  have  sought  a  stay  with  all  due  diligence.

          Instead,  the  Trustee  relies either  upon  more  finely focused

          reorganization  provisions  not applicable  here,  see Bankruptcy
                                                             ___

          Code    1127(b), 11  U.S.C.   1127(b)  (barring plan modification

          after  "substantial  consummation"),   or  inapposite  settlement

          provisions pursuant to which lawsuits in nonbankruptcy courts had

          already   been   dismissed   with   prejudice,   or   substantial

          distributions  had been  made  to parties  no longer  amenable to

          bankruptcy  court  jurisdiction.    Here,  of  course,  the  only

          dismissal  with  prejudice  occurred  in  the  instant  adversary

          proceeding and there has been no showing that any portion  of the

          settlement  proceeds  disbursed  to the  Trustee,  or  to persons

          employed by  the Trustee,  could not be  recovered with  relative

          ease.   See  In re  The  Gibbons-Grable Co.,  141  B.R. 614,  617
                  ___  ______________________________

          (Bankr. N.D.  Ohio 1992)  (noting that  interim disbursements  of

          compensation  under Bankruptcy Code  sections 330 and  331 remain

          subject to  reconsideration); see also  In re Spillane,  884 F.2d
                                        ___ ____  ______________

          642, 644 (1st Cir. 1989).

                    Accordingly, the  equitable mootness doctrine  does not

          bar the present appeal.

               2.   Section 363(m) Mootness
               2.   Section 363(m) Mootness
                    _______________________

                    The  Trustee further contends that the appeal is mooted

          by section 363(m), which states:

                                          7

                    The reversal  or modification on appeal of an
                    authorization  under [  363(b)  or (c)]  of a
                    _____________                            __ _
                    sale  or lease  of property  [of the  estate]
                    ____  __ _____  __ ________
                    does not  affect the  validity of  a sale  or
                                                         ____  __
                    lease under such  authorization to an  entity
                    _____                           __ __  ______
                    that  purchased or  leased  such property  in
                    ____  _________ __  ______  ____ ________
                    good faith, whether  or not such entity  knew
                    of the  pendency of  the appeal, unless  such
                    authorization  and such  sale  or lease  were
                                             ____  __ _____
                    stayed pending appeal.

          Bankruptcy Code    363(m), 11  U.S.C.   363(m)  (emphasis added).

          The Trustee argues that section 363(m) applies because the claims

          which were settled with the  Bank Group constituted "property  of

          the estate,"  see Bankruptcy Code    541(a), 11 U.S.C.    541(a),
                        ___

          and therefore the settlement  was the functional equivalent  of a

          "sale . . . of property" of the estate under section 363(m).  The

          Trustee s contention is fraught with problems.

                    First,  it is  at odds  with  the unambiguous  language

          employed in  section 363(m).   See Laracuente v.  Chase Manhattan
                                         ___ __________     _______________

          Bank, 891  F.2d 17,  22 n.2,  23 (1st  Cir. 1989)  (in construing
          ____

          Bankruptcy Code,  "our inquiry .  . .  ends where,  as here,  the

          plain  language of  the statute  is unambiguous").   By  its very

          nature  a settlement resolves  adversarial claims prior  to their
                                                            _____

          definitive determination by  the court.   In  contrast, a  "sale"

          effects a  [t]ransfer  of [ the title .  . . ] [to]  property for

          [a] consideration .  . . .   Black s Law Dictionary 1200 (5th ed.

          1979).   The bankruptcy court below simply  endorsed a settlement

          negotiated  by  the  adversaries  whereby  the  Trustee abandoned

          claims  against  the  Bank  Group  in  return  for  a  prescribed

          consideration.  

                    Second,  the interpretation urged by the Trustee is not

                                          8

          in step  with the  legislative policy  animating section  363(m),

          which  sought to  encourage  optimum bids  for  "property of  the

          estate"  from  entities  not otherwise  privy  to  the bankruptcy

          proceedings,  by  ensuring  that  orders   approving  such  sales

          promptly  become final  absent a  timeous  stay.   See Mark  Bell
                                                             ___ __________

          Furniture Warehouse, Inc.  v. D.M. Reid Assocs. (In  re Mark Bell
          _________________________     _________________  ________________

          Furniture  Warehouse,  Inc.), 992  F.2d  7,  8  (1st Cir.  1993);
          ___________________________

          Willemain  v.  Kivitz,  764  F.2d  1019,  1023  (4th  Cir.  1985)
          _________      ______

          (defining  "good  faith  purchaser" as  " one  who  purchases the

          assets for  value, in good  faith, and without notice  of adverse

          claims ") (citation omitted);  Greylock Glen  Corp. v.  Community
                                         ____________________     _________

          Sav. Bank, 656 F.2d 1, 4 (1st Cir. 1981).   By contrast, the Bank
          _________

          Group in no sense qualified as an outside bidder eligible for the

          extraordinary "finality"  guaranties afforded by  section 363(m).

          Instead, as the defendant directly targeted by the Trustee in the

          subject adversary proceeding, not only was the Bank Group the one

          "bidder" at  all concerned  about resolving  the disputed  claims

          asserted against it  by the Trustee, but it  lacked any incentive

          to abandon  its settlement bargain  with the Trustee  even absent

          the  extraordinary "finality"  guaranties  envisioned in  section

          363(m).

                    Finally,  the authorities  cited  by  the  Trustee  are

          inapposite or inconclusive at best.   See, e.g., In re Telesphere
                                                ___  ____  ________________

          Communications,  Inc.,  179  B.R. 544  (Bankr.  N.D.  Ill. 1994).
          _____________________

          Telesphere  suggests  no broad  functional equivalence  between a
          __________

          property sale or  lease and a settlement, but  simply that courts

                                          9

          may consult section 363 for guidance in identifying standards for
                                      ________

          such  basic procedures  as  "notice" and  "hearing,"  id. at  552
                                                                ___

          (citing  11 U.S.C.    363(b)), particularly since  no substantive

          Code  provision  directly  governs  settlement approvals  by  the

          bankruptcy  court,  compare  Fed.  R.  Bankr.  9019  (prescribing
                              _______

          procedural guidance for settlements), with Fed. R. Bankr. P. 6004
                                                ____

          (prescribing distinct  procedural rules  for   363  sales).   For

          that  matter,  Telesphere did  not  so  much as  mention  section
                         __________

          363(m),  let alone  endorse its  wholesale  importation into  the

          settlement arena.4
                              
          ____________________

              4Nevertheless,  there lurks a concern, not raised here, which
          may cut the  other way.  Prior  to the Bankruptcy Code,  sales of
          property belonging to the estate  were governed by Bankruptcy Act
            70(f), 11 U.S.C.   110 (repealed), and settlements were subject
          to  Bankruptcy  Act    27,  11 U.S.C.     50 (repealed).    See 9
                                                                      ___
          Lawrence  P. King,  Collier on  Bankruptcy   9019.RH,  at 9019-12
                              ______________________
          (15th  ed. 1995).   Former  Bankruptcy Rule  919, predecessor  to
          Bankruptcy  Rule   9019,  was   the  procedural  counterpart   to
          Bankruptcy  Act   27, whose substantive  provisions have not been
          carried forward in  the Bankruptcy Code.   See In re Dow  Corning
                                                     ___ __________________
          Corp.,  198 B.R.  214, 244-47  (Bankr.  E.D. Mich.  1996); In  re
          _____                                                      ______
          Sparks, 190 B.R. 842, 843-44  (Bankr. N.D. Ill. 1996).  Moreover,
          ______
          the legislative history relating to the repeal  of Bankruptcy Act
            27 affords no insight to the intent behind this discontinuity.
               Although  Bankruptcy  Rule  9019  purports  to  empower  the
          bankruptcy court  to approve  settlements, it  may not   abridge,
          enlarge, or modify any substantive right  [enacted in the Code]. 
                                 ___________
          28  U.S.C.   2075 (emphasis added).  Thus, absent some clear Code
          source  for the substantive power to approve settlements, one may
          question  whether Congress envisioned section 363 as that source,
          but see Martin v.  Kane (In re A & C Properties),  784 F.2d 1377,
          ___ ___ ______     ____  ______________________
          1381 n.4 (9th Cir. 1986) (suggesting, in dicta, that Congress may
          have intended  the general equitable powers prescribed  in Code  
          105 to subsume the specific  powers described in Bankruptcy Act  
          27),  or  whether the  power  to  approve settlements  is  simply
          inherent to the judicial forum.
               As in any other case,  we must consider, sua sponte if  need
                                                        ___ ______
          be,  whether we  possess  subject  matter  jurisdiction  over  an
          appeal.  See Lopez v. Unanue Casal (In re Unanue Casal), 998 F.2d
                   ___ _____    ____________  __________________
          28, 30 (1st  Cir. 1993).  Nonetheless, we  may bypass problematic
          jurisdictional  questions if it  appears that the  appeal must in

                                          10

          B.   The UCC Claim Settlement5
          B.   The UCC Claim Settlement
               ________________________

                    Hicks Muse  maintains that the bankruptcy  court abused
                    Hicks Muse  maintains that the bankruptcy  court abused

          its discretion in  approving the UCC  claim settlement absent  an
          its discretion in  approving the UCC  claim settlement absent  an

          adequate factual foundation for determining the value  of the UCC
          adequate factual foundation for determining the value  of the UCC

          claim because  the Trustee never  reviewed the thirty  cartons of
          claim because  the Trustee never  reviewed the thirty  cartons of

          invoices  generated by  the  Bank  Group  during  its  collateral
          invoices  generated by  the  Bank  Group  during  its  collateral

          liquidation.    See  supra  Section  I; see  also,  e.g.,  In  re
          liquidation.    See  supra  Section  I; see  also,  e.g.,  In  re
                          ___  _____              ___  ____   ____   ______

          Goldstein,   131  B.R.   367,  371   (Bankr.   S.D.  Ohio   1991)
          Goldstein,   131  B.R.   367,  371   (Bankr.   S.D.  Ohio   1991)
          _________

          (disapproving settlement because trustee made no "thorough review
          (disapproving settlement because trustee made no "thorough review

          of the  underlying documents  [a trust  and will]  and applicable
          of the  underlying documents  [a trust  and will]  and applicable

          law").
          law").

                    The  bankruptcy  court   essentially  is  expected   to
                    The  bankruptcy  court   essentially  is  expected   to

          " assess[] and  balance the  value of  the claim[s]  . .  . being
          " assess[] and  balance the  value of  the claim[s]  . .  . being

          compromised against the value . . . of the compromise proposal. "
          compromised against the value . . . of the compromise proposal. "

          Jeffrey v.  Desmond, 70 F.3d  183, 185 (1st Cir.  1995) (citation
          Jeffrey v.  Desmond, 70 F.3d  183, 185 (1st Cir.  1995) (citation
          _______     _______

          omitted).    It may  consider,  among  other  factors:   (1)  the
          omitted).    It may  consider,  among  other  factors:   (1)  the

          probability of  success were the  claim to be litigated     given
          probability of  success were the  claim to be litigated     given

          the   legal   and   evidentiary   obstacles  and   the   expense,
          the   legal   and   evidentiary   obstacles  and   the   expense,

          inconvenience  and delay entailed  in its litigation     measured
          inconvenience  and delay entailed  in its litigation     measured

          against  the more  definitive,  concrete and  immediate  benefits
          against  the more  definitive,  concrete and  immediate  benefits
                              
          ____________________

          all events fail on the merits.  See Institut Pasteur, 104 F.3d at
                                          ___ ________________
          492.  As this is such a case, we proceed to the merits.

               5Bankruptcy court orders endorsing settlements are  reviewed
          for manifest  abuse of  discretion.  See  Jeffrey v.  Desmond, 70
                                               ___  _______     _______
          F.3d 183,  185 (1st Cir.  1995).   Moreover,  "[t]he [bankruptcy]
          judge . .  . is not to  substitute her judgment  for that of  the
          trustee,  and  the trustee's  judgment  is  to  be accorded  some
          deference."  Hill v. Burdick (In re Moorhead Corp.), 208 B.R. 87,
                       ____    _______  ____________________
          89  (B.A.P.  1st  Cir.  1997).      Compromises  are  favored  in
          bankruptcy.   9 Collier on Bankruptcy   9019.01, at 9019-2.
                          _____________________

                                          11

          attending the  proposed settlement, see  Kowal, 965 F.2d  at 1141
          attending the  proposed settlement, see  Kowal, 965 F.2d  at 1141
                                              ___  _____

          n.5, 1145 (so-called "best interests" standard); (2) a reasonable
          n.5, 1145 (so-called "best interests" standard); (2) a reasonable

          accommodation  of the  creditors'  views  regarding the  proposed
          accommodation  of the  creditors'  views  regarding the  proposed

          settlement;   and  (3)  the  experience  and  competence  of  the
          settlement;   and  (3)  the  experience  and  competence  of  the

          fiduciary proposing the settlement.  See Jeffrey, 70 F.3d at 185;
          fiduciary proposing the settlement.  See Jeffrey, 70 F.3d at 185;
                                               ___ _______

          In  re Texaco,  Inc., 84  B.R.  893, 902  (Bankr. S.D.N.Y.  1988)
          In  re Texaco,  Inc., 84  B.R.  893, 902  (Bankr. S.D.N.Y.  1988)
          ____________________

          (citing Protective  Committee  for  Indep.  Stockholders  of  TMT
          (citing Protective  Committee  for  Indep.  Stockholders  of  TMT
                  _________________________________________________________

          Trailer Ferry, Inc. v. Anderson, 390 U.S. 414 (1968)).
          Trailer Ferry, Inc. v. Anderson, 390 U.S. 414 (1968)).
          ___________________    ________

                                          12

               1.   "Best Interests"
               1.   "Best Interests"
                     ______________

                    The Trustee identified several reasons for settling the

          UCC claim for  minimal value.6   First, the estate  would face  a
                                           First, the estate  would face  a

          formidable  burden in  attempting to  demonstrate  that the  Bank
          formidable  burden in  attempting to  demonstrate  that the  Bank

          Group liquidated its collateral in a  "commercially unreasonable"
          Group liquidated its collateral in a  "commercially unreasonable"

          manner.  Second,  Hicks makes too much of  the Trustee's decision
          manner.  Second,  Hicks makes too much of  the Trustee's decision

          to  forego a costly and time-consuming lapidarian review of every
          to  forego a costly and time-consuming lapidarian review of every

          invoice generated  during the collateral  liquidation, especially
          invoice generated  during the collateral  liquidation, especially

          since  Hicks makes  no suggestion  that  the individual  invoices
          since  Hicks makes  no suggestion  that  the individual  invoices

          reflect any relevant  information other than the  price obtained.
          reflect any relevant  information other than the  price obtained.

          Ordinarily a UCC   9-504(3) claimant must show  something besides
          Ordinarily a UCC   9-504(3) claimant must show  something besides

          a low price,  as by demonstrating that the collateral liquidation
          a low price,  as by demonstrating that the collateral liquidation

          was not conducted in a commercially reasonable manner.  See Mass.
          was not conducted in a commercially reasonable manner.  See Mass.
                  _________                                       ___

          Gen. Laws  Ann. ch. 106,    9-507(2); RTC  v. Carr, 13  F.3d 425,
          Gen. Laws  Ann. ch. 106,    9-507(2); RTC  v. Carr, 13  F.3d 425,
                                                ___     ____

          429-30 (1st Cir.  1993) (citing Chartrand v. Newton  Trust Co., 5
          429-30 (1st Cir.  1993) (citing Chartrand v. Newton  Trust Co., 5
                                          _________    _________________

          N.E.2d  421, 423  (Mass.  1936));  Nadler  v.  BayBank  Merrimack
          N.E.2d  421, 423  (Mass.  1936));  Nadler  v.  BayBank  Merrimack
                                             ______      __________________

          Valley, N.A., 733 F.2d  182, 184 (1st  Cir. 1984).  Thus,  absent
          Valley, N.A., 733 F.2d  182, 184 (1st  Cir. 1984).  Thus,  absent
          ____________

          extraordinary circumstances not present here,  mere evidence that
          extraordinary circumstances not present here,  mere evidence that

          the Healthco collateral might have returned more than $50 million
          the Healthco collateral might have returned more than $50 million

          in some exquisitely  orchestrated liquidation did not  offset the
          in some exquisitely  orchestrated liquidation did not  offset the

          substantial  burdens and  risks  which  the  Trustee  would  have
          substantial  burdens and  risks  which  the  Trustee  would  have

          encountered in litigating the UCC claim.
          encountered in litigating the UCC claim.

                    Furthermore,  the insistence  by  Hicks  Muse that  the
                    Furthermore,  the insistence  by  Hicks  Muse that  the

                              
          ____________________

               6On  the other hand, Hicks Muse offered no solid evidentiary
          basis  for second-guessing  the  Trustee's  assessment  that  the
          settlement recoveries would amount to  90% of the total allegedly
          due the estate on the fraudulent transfer claim.

                                          13

          Trustee review every  invoice in the thirty  cartons delivered by
          Trustee review every  invoice in the thirty  cartons delivered by

          the  Bank Group  is predicated  on the  mistaken notion  that the
          the  Bank Group  is predicated  on the  mistaken notion  that the

          Trustee or  the bankruptcy court was obliged  to fix the value of
          Trustee or  the bankruptcy court was obliged  to fix the value of

          the UCC claim with near mathematical precision before it could be
          the UCC claim with near mathematical precision before it could be

          settled.  See Kowal, 965 F.2d at 1145 ("[A] chapter 7 trustee . .
          settled.  See Kowal, 965 F.2d at 1145 ("[A] chapter 7 trustee . .
                    ___ _____

          .   realistically  cannot  be  required  to  demonstrate  to  the
          .   realistically  cannot  be  required  to  demonstrate  to  the

          satisfaction of every  individual creditor and the debtor,  or to
          satisfaction of every  individual creditor and the debtor,  or to

          any compelling degree  of certitude, that the  settlement benefit
          any compelling degree  of certitude, that the  settlement benefit

          to  the chapter  7  estate and  the  value of  the  settled claim
          to  the chapter  7  estate and  the  value of  the  settled claim

          comprise  a matched set.").  Among other practical considerations
          comprise  a matched set.").  Among other practical considerations

          overlooked under this  approach is the reality that  many, if not
          overlooked under this  approach is the reality that  many, if not

          most, claims settled  in bankruptcy proceedings are  not amenable
          most, claims settled  in bankruptcy proceedings are  not amenable

          either to ready or exact valuation in the abstract.  In re Energy
          either to ready or exact valuation in the abstract.  In re Energy
                                                               ____________

          Coop., 886 F.2d  921, 929 (7th Cir. 1989)  (" [A]n exact judicial
          Coop., 886 F.2d  921, 929 (7th Cir. 1989)  (" [A]n exact judicial
          _____

          determination of the values in  issue would defeat the purpose of
          determination of the values in  issue would defeat the purpose of

          compromising  the claim. ")  (citation omitted);  In  re Lee  Way
          compromising  the claim. ")  (citation omitted);  In  re Lee  Way
                                                            _______________

          Holding Co.,  120 B.R. 881,  897 (Bankr. S.D. Ohio  1990) (noting
          Holding Co.,  120 B.R. 881,  897 (Bankr. S.D. Ohio  1990) (noting
          ___________

          that settling party  need only have  "[f]amiliarity with a  case,
          that settling party  need only have  "[f]amiliarity with a  case,

          its factual patterns, legal theories, and evidence," and need not
          its factual patterns, legal theories, and evidence," and need not

          be  "so familiar  with the  case as to  be prepared  for trial").
          be  "so familiar  with the  case as to  be prepared  for trial").

          Thus, "th[e] responsibility  of the bankruptcy judge, and ours on
          Thus, "th[e] responsibility  of the bankruptcy judge, and ours on

          review,  is not to decide the  numerous questions of law and fact
          review,  is not to decide the  numerous questions of law and fact

          raised by  appellants but  rather to canvass  the issues  and see
          raised by  appellants but  rather to canvass  the issues  and see

          whether the settlement  'fall[s] below  the lowest  point in  the
          whether the settlement  'fall[s] below  the lowest  point in  the

          range of  reasonableness. "  Cosoff  v. Rodman (In re  W.T. Grant
          range of  reasonableness. "  Cosoff  v. Rodman (In re  W.T. Grant
                                       ______     ______  _________________

          Co.), 699 F.2d 599, 608 (2d Cir. 1983) (citation omitted); see In
          Co.), 699 F.2d 599, 608 (2d Cir. 1983) (citation omitted); see In
          ___                                                        ___ __

                                          14

          re Energy Coop., 886 F.2d at 929.7
          re Energy Coop., 886 F.2d at 929.
          _______________

                    The  evidence on  sale-price  insufficiency was  highly
                    The  evidence on  sale-price  insufficiency was  highly

          suspect as well.  The original complaint valued the UCC  claim at
          suspect as well.  The original complaint valued the UCC  claim at

          $99 million or more (i.e., $149 million minimum asset value, less
          $99 million or more (i.e., $149 million minimum asset value, less
                               ____

          $50 million  in sale  proceeds generated to  date).   The Trustee
          $50 million  in sale  proceeds generated to  date).   The Trustee

          quite  reasonably  attributed  its  overestimation to  aggressive
          quite  reasonably  attributed  its  overestimation to  aggressive

          pleading typical of  plaintiffs generally at early stages  in the
          pleading typical of  plaintiffs generally at early stages  in the

          proceedings.   Moreover, it  is often  a practical  necessity for
          proceedings.   Moreover, it  is often  a practical  necessity for

          fiduciaries and  claimants in  bankruptcy proceedings  to utilize
          fiduciaries and  claimants in  bankruptcy proceedings  to utilize

          the inflated asset  values listed in the debtor's  schedules as a
          the inflated asset  values listed in the debtor's  schedules as a

          main   source  for  their   valuation  estimates  prior   to  any
          main   source  for  their   valuation  estimates  prior   to  any

          opportunity  to conduct  discovery, see  Fed. R.  Bankr.  P. 7026
          opportunity  to conduct  discovery, see  Fed. R.  Bankr.  P. 7026
                                              ___

          (discovery)  &  7015  (permitting  post-discovery  amendments  to
          (discovery)  &  7015  (permitting  post-discovery  amendments  to

          complaints  in adversary proceedings).  See Associates Commercial
          complaints  in adversary proceedings).  See Associates Commercial
                                                  ___ _____________________

          Corp. v. A & A Transp., Inc. (In re A & A Transp., Inc.), 10 B.R.
          Corp. v. A & A Transp., Inc. (In re A & A Transp., Inc.), 10 B.R.
          _____    ___________________  _________________________

          867,  868-69 (Bankr. D. Mass. 1981) ("[A]lthough the Debtor signs
          867,  868-69 (Bankr. D. Mass. 1981) ("[A]lthough the Debtor signs

          the  schedules under  oath, the  values listed  therein are  only
          the  schedules under  oath, the  values listed  therein are  only

          reasonable  estimates, and  very often  the  person charged  with
          reasonable  estimates, and  very often  the  person charged  with

          preparing  the schedules  has little  or no  knowledge about  the
          preparing  the schedules  has little  or no  knowledge about  the

          value of  certain types of  property listed  therein.").   Fairly
          value of  certain types of  property listed  therein.").   Fairly

          early on, in  fact, the Trustee uncovered evidence  that the $149
          early on, in  fact, the Trustee uncovered evidence  that the $149

          million valuation estimate was grossly excessive.
          million valuation estimate was grossly excessive.

                              
          ____________________

               7We  reject   the  contention  that  the   bankruptcy  court
          necessarily  considered the  UCC  claim  valueless.    Since  the
          evidence  did not  compel  a  finding that  $45  million was  the
          minimum needed to settle the fraudulent transfer claim, see supra
                                                                  ___ _____
          note 6, some unidentified portion  of the settlement sum may have
          reflected a reasonable discounting of the UCC claim. 

                                          15

                    At   a  hearing   conducted  during   the   chapter  11
                    At   a  hearing   conducted  during   the   chapter  11

          proceedings, Healthco  personnel  pegged  the  likely  collateral
          proceedings, Healthco  personnel  pegged  the  likely  collateral

          liquidation  value at  between $33  and 66  million,  which quite
          liquidation  value at  between $33  and 66  million,  which quite

          accurately presaged the  $50-60 million  ultimately generated  in
          accurately presaged the  $50-60 million  ultimately generated  in

          sale proceeds.   See In re Tennessee Chem. Co., 143 B.R. 468, 475
          sale proceeds.   See In re Tennessee Chem. Co., 143 B.R. 468, 475
                           ___ _________________________

          (Bankr. E.D. Tenn. 1992) ("[T]he usual assumption [is] that going
          (Bankr. E.D. Tenn. 1992) ("[T]he usual assumption [is] that going

          concern  value is  greater  than  forced  sale,  liquidation,  or
          concern  value is  greater  than  forced  sale,  liquidation,  or

          salvage  value.").   Furthermore,  for  some  time  Healthco  had
          salvage  value.").   Furthermore,  for  some  time  Healthco  had

          utilized a deficient inventory control system which may well have
          utilized a deficient inventory control system which may well have

          caused gross overstatements in its 1993 inventories.
          caused gross overstatements in its 1993 inventories.

                    Yet more importantly, however, Healthco was the largest
                    Yet more importantly, however, Healthco was the largest

          distributor  of  dental  supplies  in  the  United  States,  with
          distributor  of  dental  supplies  in  the  United  States,  with

          extensive worldwide  markets.   Its  huge  market share  and  the
          extensive worldwide  markets.   Its  huge  market share  and  the

          necessity  that  its  inventories virtually  be  "dumped"  on the
          necessity  that  its  inventories virtually  be  "dumped"  on the

          market  reasonably  could  be  expected  to  cause  significantly
          market  reasonably  could  be  expected  to  cause  significantly

          depressed prices.   Moreover,  many Healthco  accounts receivable
          depressed prices.   Moreover,  many Healthco  accounts receivable

          were  in  serious  dispute and  unlikely  to  attract substantial
          were  in  serious  dispute and  unlikely  to  attract substantial

          offers from third  parties.   See, e.g., Brown  v. Riley &  Power
          offers from third  parties.   See, e.g., Brown  v. Riley &  Power
                                        ___  ____  _____     ______________

          Mgt., Inc.  (In re Omni  Mech. Contractors, Inc.), 114  B.R. 518,
          Mgt., Inc.  (In re Omni  Mech. Contractors, Inc.), 114  B.R. 518,
          __________   ___________________________________

          522  (Bankr. E.D. Tenn. 1990) ("The  value of accounts receivable
          522  (Bankr. E.D. Tenn. 1990) ("The  value of accounts receivable

          may be discounted for uncollectible and disputed debts.").  Hicks
          may be discounted for uncollectible and disputed debts.").  Hicks

          Musecitesnorecordevidencewhichwouldunderminetheseconsiderations.8
          Musecitesnorecordevidencewhichwouldunderminetheseconsiderations.

                              
          ____________________

               8As the  Healthco collateral liquidation was  exceptional in
          these  important respects, the Trustee supportably concluded that
          the decision by the Bank  Group not to obtain a liquidation-value
          appraisal   prior   to   its  collateral   liquidation   was  not
          unreasonable,  or at  the very  least that  the trier of  fact at
          trial could have found it excusable.

                                          16

                    Finally, the  Trustee reasonably concluded that even if
                    Finally, the  Trustee reasonably concluded that even if

          the sale proceeds  obtained by the Bank Group were  shown to have
          the sale proceeds  obtained by the Bank Group were  shown to have

          been  low,  it  was  most   unlikely  that  it  could  have  been
          been  low,  it  was  most   unlikely  that  it  could  have  been

          demonstrated that the  collateral liquidation had been  conducted
          demonstrated that the  collateral liquidation had been  conducted

          in a commercially unreasonable manner, given that it had begun in
          in a commercially unreasonable manner, given that it had begun in

          1993 on terms  and conditions approved  by the bankruptcy  court.
          1993 on terms  and conditions approved  by the bankruptcy  court.
               __ _____  ___ __________ ________  __ ___ __________  _____

          Although close  bankruptcy court  oversight  did not  necessarily
          Although close  bankruptcy court  oversight  did not  necessarily

          rule  out   a  claim  that   the  Bank  Group   unilaterally  and
          rule  out   a  claim  that   the  Bank  Group   unilaterally  and

          "unreasonably" exceeded  or disregarded the terms  and conditions
          "unreasonably" exceeded  or disregarded the terms  and conditions

          of  the  collateral  liquidation,  Hicks  Muse  cites  no  record
          of  the  collateral  liquidation,  Hicks  Muse  cites  no  record

          evidence that  the Bank Group  did so.  Accordingly,  we conclude
          evidence that  the Bank Group  did so.  Accordingly,  we conclude

          that the "best interests" factor favored the settlement.
          that the "best interests" factor favored the settlement.

               2.   Creditor Views
               2.   Creditor Views
                    ______________

                    The  unsecured creditors  committee strongly  supported

          the  proposed settlement,  as did  the  overwhelming majority  of

          individual unsecured  creditors.   See Lee Way  Holding Co.,  120
                                             ___ ____________________

          B.R. at 904 (noting importance of creditors committee support for

          settlement).  The only objections came from some noncreditors and

          nonsettling creditors  who  were codefendants  in  the  adversary

          proceeding.  Hicks Muse counters that creditors committee support

          for the original  settlement proposal must be  discounted because

          the settlement  underwent modification before  gaining bankruptcy

          court approval.  Be that as  it may, there is no indication  that

          any  creditor  withdrew  its  consent  based on  the  de  minimis
                                                                __  _______

          modifications  subsequently made by the bankruptcy court, none of

          whichdetracted from the overall reasonableness of the compromise.

                                          17

               3.   The Trustee's Competence and Experience
               3.   The Trustee's Competence and Experience
                    _______________________________________

                    Other  than by  implication,  through  reliance on  the

          Trustee's reasonable decision not to review the thirty cartons of

          individual  invoices, see supra  Section II.B.1., Hicks  Muse has
                                ___ _____

          not   questioned  the   Trustee's   professional  competence   or

          experience.   Absent  such  a  challenge,  this  factor  provided

          further  support for the settlement.  See  Hill v. Burdick (In re
                                                ___  ____    _______  _____

          Moorhead Corp.), 208 B.R. 87, 89 (B.A.P. 1st Cir. 1997).
          ______________

                    We  therefore   conclude  that   Hicks  Muse   has  not

          demonstrated a  manifest abuse  of discretion  by the  bankruptcy

          court.

          C.   Other Settlement Terms
          C.   Other Settlement Terms
               ______________________

               1.   Assignment Clause
               1.   Assignment Clause
                    _________________

                    Next,  Hicks Muse  contests  a settlement  modification

          which deferred  any determination regarding the enforceability of

          certain   causes  of   action  against   nonsettling  defendants,

          including  Hicks  Muse, which  the  Bank  Group assigned  to  the

          Trustee.   Hicks Muse contends  that the bankruptcy court  had no

          choice  but to  strike this  modification because  it lacked  the

          power to  approve the assignment.   See Caplin v.  Marine Midland
                                              ___ ______     ______________

          Grace Trust Co.  of N.Y., 406 U.S. 416, 434  (1972) (holding that
          ________________________

          trustee lacked standing to sue in behalf  of individual creditors

          of estate); Williams v. California First Bank, 859 F.2d 664, 666-
                      ________    _____________________

          67  (9th  Cir. 1988)  (applying Caplin  ban even  though creditor
                                          ______

          purportedly assigned its claim to trustee).

                    We need  not address the  Caplin question on  which the
                                              ______

                                          18

          Hicks  Muse  contention  is  predicated.    Unlike  a  settlement

          agreement wherein the  estate abandons an enforceable  right, the

          assignment by the Bank Group conferred a benefit upon the chapter

          7  estate.    As  the  bankruptcy court  acted  well  within  its

          discretion  in  determining  that the  benefit  conferred  by the

          settlement served the  "best interests" of  the chapter 7  estate

          without regard to whether the Trustee realized additional benefit

          from the subject assignment, nothing more was required.9

               2.   Potential Contribution Claims
               2.   Potential Contribution Claims
                    _____________________________

                     Finally,  Hicks  Muse   faults  the  bankruptcy  court

          finding that  the  Trustee  and  the Bank  Group  negotiated  the

          settlement  in "good  faith."   It characterizes  the  finding as

          immaterial  to the Rule  9019(a) "best  interests of  the estate 

          standard and worries  that the Bank Group may  misuse the finding

          should  Hicks Muse  later  seek  contribution,  since  state  law

          normally bars  nonsettling defendants  from asserting  claims for

                              
          ____________________

               9Hicks Muse cites  no apposite authority  for its view  that
          the bankruptcy  court had to determine the enforceability vel non
                                                                    ___ ___
          of the assignment before approving the settlement agreement under
          Rule  9019(a),  particularly  since   the  Caplin-Williams  issue
                                                     ______ ________
          remained unripe  for adjudication  unless and  until the  Trustee
          were to assert an assigned claim against Hicks Muse.
               Furthermore, though we need not resolve the matter, it seems
          unlikely  that  Hicks Muse  could demonstrate  cognizable injury.
          The  Bank Group  (and its  putative assignee)  would have  had to
          assert    in the adversary proceeding, see Fed. R. Bankr. P. 7013
                                                 ___
              whatever LBO-related  claims  it  held  against  Hicks  Muse.
          Whereas  the Trustee  notes that  he  elected not  to assert  any
          derivative claim against  Hicks Muse  at trial  in the  adversary
          proceeding.  See Mai Systs. Corp. v. C.U. Techs., Inc. (In re Mai
                       ___ ________________    _________________  _________
          Systs.  Corp.),  178 B.R.  50,  55  (Bankr.  D. Del.  1995)  (res
          _____________                                                 ___
          judicata normally bars subsequent litigation of claim which could
          ________
          have  been litigated  in earlier  contested  matter or  adversary
          proceeding).

                                          19

          contribution  against codefendants  who  have  settled  with  the

          plaintiff in "good  faith."  See, e.g., Mass. Gen.  Laws Ann. ch.
                                       ___  ____

          231B,   4 (Contribution Among Tortfeasors Act).

                    The district court  attempted to accommodate the  Hicks

          Muse concern  by amending the  settlement order so as  to reserve

          the  question whether the bankruptcy court's "good faith" finding

          would be entitled  to preclusive effect in any  subsequent state-

          law  contribution action.   Although  we concur  in the  district

          court's  action,  we   think  Hicks  Muse   was  entitled  to   a

          determination that  the interpretation  feared by  Hicks Muse  is

          precluded by the settlement order.

                    The  "best  interests" standard  under  Bankruptcy Rule

          9019 contemplates a determination by  the bankruptcy court as  to

          whether the  proposed settlement  was negotiated  in good  faith.

          See, e.g.,  In re  Kuhns, 101 B.R.  243, 246-47 (Bankr.  D. Mont.
          ___  ____   ____________

          1989)  (disapproving "bad faith" settlement).  Although the "good

          faith" finding  by the  bankruptcy court  below was  expressed in

          general  terms,  without mentioning  contribution,  elsewhere the

          court explicitly provided that the legal effect of the settlement

          order   on  contribution   claims   was   to   be   governed   by

          "[n]onbankruptcy law."

                    Moreover,  there is  considerable question  whether the

          bankruptcy  court possessed  the  power to  make  a "good  faith"

          finding  preempting  future  contribution  claims by  nonsettling

          parties  in these  circumstances.   Compare,  e.g., Feld  v. Zale
                                              _______   ____  ____     ____

          Corp. (In  re Zale  Corp.), 62 F.3d  746, 752-54 (5th  Cir. 1995)
          _____ ___________________

                                          20

          (holding  that  bankruptcy   court  approving  settlement  lacked

          jurisdiction to resolve claims  between nondebtors), with Munford
                                                               ____ _______

          v. Munford, Inc.  (In re Munford,  Inc.), 97 F.3d 449,  455 (11th
             _____________   ____________________

          Cir.  1996)  (holding  that  Bankruptcy Code     105  may empower

          bankruptcy court to bar future contribution claims by nonsettling

          defendants).   In all events,  since the Trustee did  not request

          extraordinary equitable relief  under Bankruptcy Code    105, cf.
                                                                        ___

          supra  Section   II.C.1  (bankruptcy  court  need  not  determine
          _____

          enforceability of  settlement terms  which pose  no detriment  to

          chapter 7 estate), we need not resolve this question.  Absent any

          clear indication that future contribution claims were foreclosed,

          we  conclude that  the bankruptcy  court  discussed "good  faith"

          simply as another factor in its "best interests" analysis, see In
                                                                     ___ __

          re Kuhns, 101  B.R. at 246-47, rather than with a view to barring
          ________

          or otherwise affecting future contribution claims.

                    Accordingly,  should Hicks  Muse subsequently  assert a

          state-law contribution claim against the  Bank Group, it is to be

          governed by  the applicable state  law.  If the  applicable state

          law  were  to  comport  with  the  "good  faith"  standard  under

          Bankruptcy  Rule  9019,  the  Bank  Group  might  prevail on  its

          contention  that the  settlement order collaterally  estops Hicks

          Muse  from  relitigating  the  factual issue  as  to  whether the

          settlement  between  the  Trustee and  the  Bankruptcy  Group was

          negotiated  in  good  faith.    As  there  may  be  no  necessary

          equivalence   between  Bankruptcy   Rule   9019  and   applicable

          nonbankruptcy contribution  law  regarding  the  governing  "good

                                          21

          faith" standard, we venture no opinion.

                    Affirmed.
                    Affirmed.
                    ________

                                          22