Sanders v. Watcher et al. (In re: JOSEPH L. SANDERS)
- Summarized by Michael Myers , Ballard Spahr LLP
- 3 months 2 weeks ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- BAP No. CC-23-1003-LSF (9th Circuit, Aug 09,2023) Not Published
- Tag(s):
-
- Ruling:
- The Ninth Circuit Bankruptcy Appellate Panel upheld the bankruptcy court's approval of a settlement, over the objection of the debtor, between a chapter 7 trustee and creditors satisfying the creditors' secured claims and resolving their unsecured claims.
- Procedural context:
- Creditors had moved to estimate their claims for purposes of distributions from a sale of real property by the trustee. Trustee filed a partial joinder to the motion and the debtor filed an opposition. The bankruptcy court ordered the parties to attend mediation, at which the creditors and trustee reached a settlement but which debtor opposed. The bankruptcy court approved the settlement agreement between the trustee and creditors over the debtor's objection.
- Facts:
- Pre-petition, the creditors had obtained default judgments against the debtor as well as certain non-debtor parties. The judgments against the non-debtor parties provided for approximately $31 million in damages and reformation of two notes and two deeds of trust related to loans made by the non-debtors to debtor for real property. The judgment against debtor was for conversion for approximately $3.4 million. Debtor obtained an order vacating the default judgment against him for lack of notice after filing a chapter 11 bankruptcy. His bankruptcy was subsequently converted to a chapter 7, and the chapter 7 trustee sold one of the two real properties on which the creditors had a lien by virtue of the reformed deed of trust.
- Judge(s):
- Lafferty, Spraker, and Faris
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