Court Opinion

ID: 4162070
Source: CourtListenerOpinion
Date Created: 2017-04-20 20:03:58.467045+00
Date Added: 2024-06-11T07:46:49.190534
License: Public Domain

NOT FOR PUBLICATION

                       UNITED STATES COURT OF APPEALS
                                                                            FILED
                                 FOR THE NINTH CIRCUIT
                                                                             APR 20 2017
                                                                         MOLLY C. DWYER, CLERK
                                                                           U.S. COURT OF APPEALS
In re: SPANISH PEAKS HOLDINGS II,                 No. 14-35945
LLC,
                                                  D.C. No. 2:14-cv-00022-SEH
               Debtor,

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

BOYNE USA, INC.; BIG SKY RESORT
LLC,

               Creditors-Appellants,

 v.

ROSS P. RICHARDSON, Chapter 7
Trustee of the Estates of Spanish Peaks
Holdings II, LLC, Spanish Peaks Lodge
LLC, and The Club at Spanish Peaks,

               Trustee-Appellee.

                      Appeal from the United States District Court
                              for the District of Montana
                       Sam E. Haddon, District Judge, Presiding

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                              Submitted April 6, 2017**
                                Seattle, Washington

Before: KOZINSKI and W. FLETCHER, Circuit Judges, and BLOCK,*** District
Judge.

      Boyne, USA, Inc. and Big Sky Resort, LLC appeal from the district court’s

order affirming the bankruptcy court’s approval of a settlement agreement between

the trustee of the estates of three debtors (the “Estates”) and various insider entities

(the “Debtor-Affiliates”).

      “In an appeal from the district court’s affirmance of a decision of the

bankruptcy court . . . we are, in essence, reviewing the final order of the

bankruptcy court.” Martin v. Kane (In re A&C Properties), 784 F.2d 1377, 1380

(9th Cir. 1986). We review the bankruptcy court’s decision to approve the

settlement agreement for abuse of discretion. Id.

      The bankruptcy court did not abuse its discretion in approving the Debtor-

Affiliate Settlement. Under Federal Rule of Bankruptcy Procedure 9019, a

bankruptcy court “may approve a compromise or settlement” on motion by the

trustee and after notice and a hearing. The settlement must be “fair and equitable.”

      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
             The Honorable Frederic Block, Senior United States District Judge for
the Eastern District of New York, sitting by designation.
                                            2
In re A&C Properties, 784 F.2d at 1381. In determining whether a settlement

satisfies this standard, the bankruptcy court must consider:

      (a) The probability of success in the litigation; (b) the difficulties, if any, to
      be encountered in the matter of collection; (c) the complexity of the
      litigation involved, and the expense, inconvenience and delay necessarily
      attending it; (d) the paramount interest of the creditors and a proper
      deference to their reasonable views in the premises.

Id. Generally, the bankruptcy court does not abuse its discretion if it makes “a full

and fair independent assessment of the wisdom of the compromise.” Id. at 1383.

      Here, the bankruptcy court held an evidentiary hearing and considered the

A&C Properties factors. In particular, it noted that litigation of the Estates’

fraudulent conveyance and preference claims would likely be expensive in light of

the Debtor-Affiliates’ possible defenses, and it credited the testimony of the

trustee’s financial advisor regarding the likely difficulty of collection. On this

record, the bankruptcy court did not abuse its discretion in approving either the

settlement or the trustee’s proposed allocation of the proceeds.

      AFFIRMED.

                                            3