Deeprock Venture Partners, L.P. v. Beach

Case Type:
Business
Case Status:
Affirmed
Citation:
17-10481 (5th Circuit, May 16,2018) Published
Tag(s):
Ruling:
Bankruptcy Court's granting of a Rule 9019 settlement was affirmed by the Fifth Circuit. The opinion discusses, in detail, the standards for approving settlement and compromises in the Fifth Circuit. It then carefully analyzed the record and the facts presented by the trustee in support of the settlement as to damages, uncertainty of litigation, costs of lithiation, litigation delays, values of property at issue and a number of evidentiary issues. The Court affirmed both lower courts and ruled the trustee had carried the burden that the settlement was in the best interests of the estate.
Procedural context:
Appeal from the United States District Court for the Northern District of Texas
Facts:
The bankruptcy trustee and a creditor initiated adversary proceedings against the debtor and a number of other entities. claiming the defendants fraudulently conveyed assets prior to the individual debtor's filing bankruptcy. There was also challenge to the individual debtor's discharge. After a full day of mediation, the Trustee and the defendants reached a settlement of all claims and sought approval of the settlement in a Rule 9019 motion.. The debtor also agreed to waive a discharge as part of the settlement. But the creditor/co-plaintiff objected, and argued that the settlement was not sufficient and should not be approved. The Fifth Circuit's opinion is very fact intensive as to how the settlement was fair and reasonable and in the best interests of the estate.
Judge(s):
Stewart, Haynes and Willett

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