In re Sarah Margaret Taylor
- Summarized by Lars Fuller , BakerHostetler
- 2 years 10 months ago
- Case Type:
- Case Status:
- BAP No. HI-18-1197-GBS (9th Circuit, Jul 08,2020) Not Published
- BAP for 9th Cir. affirmed ruling of bankruptcy court (D. Haw.) approving chapter 7 trustee's motion to approve settlement over objection of debtor. Bankruptcy court did not abuse discretion in approving settlement that provided for release of debtor's claims against state entities and withdrawal of proof of claim filed by Dept. of Taxation. Debtor failed to assert any argument for how bankruptcy court abused discretion and settlement was fair, reasonable, and in best interest of estate. There was no evidence the debtor's claims against the state entities had merit or value.
- Procedural context:
- Bankruptcy court (D. Haw.) granted chapter 7 trustee's motion to approve settlement over objection of debtor. Debtor appealed to BAP for 9th Cir.
- In July 2014, creditor US Bank commenced foreclosure action against debtor in Hawaii state court. Debtor filed counter-complaint and cross-complaint for various claims against state entities (Hawaii State Department of Taxation, Hawaii State Judiciary, Hawaii State Public Utilities Commission, and Hawaii State Bureau of Conveyances, Department of Land Natural Resources--together the “State Parties”) and other defendants. Debtor did not serve the cross-complaint on the State Parties and it was dismissed. In July 2015, debtor filed suit in the U.S. District Court, asserting the same claims against the various parties. The district court dismissed the complaint in September 2016. Approximately a month later, debtor filed a chapter 13 petition. The bankruptcy court denied confirmation of debtor's chapter 13 plan, and she converted her case to chapter 7. In April 2019, the chapter 7 trustee filed a motion to approve a settlement with the US Bank to sell the property, pay the estate $50,000, and pay the remaining proceeds to US Bank. The bankruptcy court approved the settlement over the debtor's objection, but debtor did not appeal. The Trustee then filed a motion to approve a separate settlement with the State Parties. The settlement provided for the estate to release all claims against the State Parties and for the Department of Taxation to withdraw its proofs of claim against the estate without prejudice to its right to assert non-discharged claims against Debtor or to collect on such claims outside of bankruptcy.
- Gan, Brand, Spraker
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