Rich Dad Operating Co., LLC v. Zubrod, et al. (In re Rich Global, LLC)

Citation:
Rich Dad Operating Company, LLC v. Zubrod, et al. (In re Rich Global, LLC), Case No. 15-8103 (10th Cir. June 14, 2016) (unpublished)
Tag(s):
Ruling:
An appeal is not moot if a court can offer even partial relief and while a majority of courts hold that a settlement of claims can qualify as a sale of property under § 363, whether to impose formal sale procedures is a matter of discretion and depends on the dynamics of the particular situation.
Procedural context:
The bankruptcy court approved a settlement between the chapter 7 trustee and the district court affirmed the approval. Appellant obtained a stay pending the appeal to the district court but made no such request on appeal to the 10th Circuit. The parties performed under the settlement agreement and moved to dismiss the appeal as moot. The 10th Circuit, after considering constitutional, equitable and statutory mootness, denied the motion to dismiss finding that the appeal was not moot but affirmed the bankruptcy court’s decision approving the settlement. The 10th Circuit also determined that the bankruptcy court's order contained sufficient findings under Rule 7052. Legal determinations reviewed de novo and factual finding reviewed for clear error.
Facts:
Rich Dad is the sole member and manager of debtor, Rich Global. Prepetition, Rich Global was sued in New York and a judgment was entered against it in the amount of $23.7 million. Rich Global appealed but rather than post a bond, filed bankruptcy under chapter 7 in Wyoming. Two creditors filed proofs of claim: (1) Rich Dad for approximately $2.2 million, and (2) the judgment creditor for almost $23.7 million. Trustee and the judgment creditor entered into a settlement and it was approved over Rich Dad’s objection.
Judge(s):
Briscoe, Lucero, Phillips

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