Roberts v. Sender, et al.
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- 25-1103 (10th Circuit, Mar 31,2026) Published
- Tag(s):
-
- Ruling:
- A bankruptcy court needs only to "canvass the issues and see whether the settlement falls below the lowest point in the range of reasonableness" when deciding whether to approve a settlement, not address every argument in an objection. The court also ruled that a bankruptcy court does not always need to resolve every objection to a creditor's claim before approving a settlement with that creditor. Claim objections need not be resolved if they relate to a creditor's right to a distribution rather than an individual right of the creditor (e.g., the existence or priority of a lien).
- Procedural context:
- An individual debtor's trustee obtained court approval, over the debtor's objection, for a settlement with certain creditors. The debtor appealed to the Bankruptcy Appellate Panel.
The BAP affirmed the bankruptcy court.
The debtor then appealed to the Court of Appeals.
- Facts:
- Michael J. Roberts, Sr. ("Roberts") formed a Colorado limited liability company ("PdC") with two other persons. PdC formed a Mexican entity, Riviera Country Club, S. de R.L. C.V.S. ("RCC"), to own land on Mexico's coast. The three members of the Colorado LLC served as RCC's managers. Roberts fraudulently used a power of attorney to obtain a lien on two of the Mexican properties owned by RCC. When Roberts attempted to foreclose—for his own personal benefit—RCC, PdC, and the other two members of the Colorado LLC (collectively, the "PDC creditors") sued Roberts in Colorado state court. The Colorado state court enjoined Roberts from further efforts to fraudulently obtain RCC's property, held him in contempt, found that he had breached his fiduciary duties, and then fined and jailed him.
Before the Colorado state court could hold the damages portion of the trial against Roberts, Roberts filed a Chapter 11 bankruptcy petition. The PdC Creditors obtained relief from the automatic stay, and the Colorado state court conducted the damages portion of the trial. The Colorado state court awarded the PdC Creditors $22.8 million in damages and attorney's fees. The bankruptcy court then found that Roberts filed his bankruptcy petition in bad faith and converted the case to a Chapter 7 proceeding.
The Chapter 7 trustee, Harvey Sender, and the PdC Creditors entered into a settlement agreement and asked the bankruptcy court to approve the settlement. The settlement agreement granted the PdC Creditors an allowed claim of $19 million in exchange for the PdC Creditors' agreement to release all other claims and any security interests or liens they may have had.
Roberts and his attorney objected to the motion to approve the settlement. The bankruptcy court conducted an evidentiary hearing, hearing evidence from five witnesses. The bankruptcy court found the testimony of PdC's Chief Financial Officer to be credible, knowledgeable, and unbiased, and the testimony of the Chapter 7 trustee to reflect a "business-like approach to the resolution of this case." The bankruptcy court thus approved the settlement.
Roberts appealed, asserting six issues that boil down to whether the bankruptcy court abused its discretion in approving the settlement.
- Judge(s):
- EID and MURPHY, Circuit Judges, and TEETER, District Judge
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