Zarate v. Umpqua Bank (In re Zarate)

9th Cir. BAP No. EC-14-1371-FDJu (Dec. 9, 2015) (unpublished)
Bankruptcy court properly approved a compromise between Chapter 7 Trustee and Bank relating to the Debtor's fraud claims against Bank which had foreclosed on the Debtor's commercial property.
Procedural context:
Pro se Debtor appealed bankruptcy court's order approving a compromise. The BAP affirmed the compromise order.
The Debtor alleged that Bank fraudulently misrepresented the terms of an $85,000 commercial mortgage. The loan had been assigned twice so the Bank was not the original lender. The Debtor filed a cross-complaint in state in response to the Bank's complaint for specific performance. The Debtor filed a Chapter 13 petition which was converted to Chapter 7. The Trustee reached a compromise agreement with the Bank for $20,000, which the bankruptcy court approved as fair and equitable, over the objections the Debtor. The bankruptcy court found the likelihood of success in the litigation was low and that the Debtor had had an opportunity to conduct discovery to show otherwise.

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