Case Type:
Case Status:
BAP No. NC-22-1071-TBF (9th Circuit, Dec 07,2022) Not Published
The bankruptcy court properly approved a compromise between the Chapter 7 trustee and a creditor. The bankruptcy court is not required to make extensive or detailed findings of fact before concluding that a settlement is proper.
Procedural context:
The bankruptcy court approved a settlement between the debtor's Chapter 7 trustee and a creditor, over the debtor's objection. The debtor appealed.
Daniela M, Farina, the debtor, and Victor Alam had a two-year personal and business relationship. During that time, they formed a real estate partnership that purchased two properties in Napa, California (the "Properties"). While they initially agreed to make equal contributions to purchase the Properties, Alam became the sole obligor on the purchase money loans, and he contributed roughly $290,000 while Farina contributed only $175,000. Despite these disparities, they took joint title to the Properties, with each holding a 50% interest. The relationship fell apart, and Alam sued Farina and had a receiver appointed for the properties. Before the receiver could sell the Properties, Farina filed two bankruptcy petitions. Promptly after the filing of the second bankruptcy case, Alam obtained relief from the automatic stay to prosecute vexatious litigant and domestic violence motions in state court and to allow the receiver to sell one of the Properties. When the second bankruptcy petition was filed, Farina had five lawsuits pending against Alam, and two more had been resolved in Alam's favor. Farina's Chapter 7 trustee and Alam reached an agreement that provided that Alam would release an abstract of judgment he filed against the Properties, Alam waived ownership of and other claims against the Properties, Alam waived his right to proceeds unless Farina's Chapter 7 case had enough liquidity to pay all administrative expenses, the Trustee would release all claims and dismiss all pending litigation against Alam. Farina objected, claiming that the she intended to file the case as a Chapter 13, not a Chapter 7 case. Farina also claimed the settlement was not fair, reasonable or equitable. Farina also objected, claiming that she did not receive the motion for approval of the compromise. Farina spoke at length at the hearing to approve the compromise motion, but never explained what evidence or argument she would present or make if the court continued the hearing.
TAYLOR, BRAND, and FARIS, Bankruptcy Judges

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