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Rule 9019(a)

In re Xenerga Inc.

Ruling
Debtor general contractor's settlement of loan debt owed by customer approved over objections of subcontractors.
Procedural posture

Chapter 7 trustee moved for approval of a compromise of controversy (settlement) with respect to turnover of a prepetition loan. Creditor subcontractors objected to the settlement.

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Commercial opinion summary, case decided on January 07, 2011 , LexisNexis #0211-033

In re Teknek LLC

Ruling
Settlement agreement approved as in best interests of estate.
Procedural posture

A chapter 7 trustee filed a motion under Fed. R. Bankr. P. 9019(a) for authority to compromise claims with the individual owners and a non-debtor corporate affiliate of the debtor. The motion was opposed by a former special counsel to the chapter 7 trustee and holder of an administrative claim.

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Commercial opinion summary, case decided on March 13, 2009 , LexisNexis #0409-070

In re Davidson

Ruling
Trustee's settlement of employment discrimination action approved over debtor's objection.
Procedural posture

A bankruptcy debtor failed to disclose an employment discrimination claim in the debtor's bankruptcy, and failed to disclose the bankruptcy in the discrimination action, in which action the district court capped the debtor's damages to amounts due to creditors in the bankruptcy case and administrative expenses. The bankruptcy trustee moved for approval of a settlement in the discrimination action, and the debtor objected to the settlement.

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Consumer opinion summary, case decided on March 09, 2009 , LexisNexis #0509-035

In re Babb

Ruling
Compromise of abuse of process and malicious prosecution claims against debtor approved as mistrial would potentially lead to increased costs of retrial to estate.
Procedural posture

Pursuant to 11 U.S.C.S. § 363(b)(1) and Fed. R. Bankr. P. 9019(a), a chapter 7 trustee moved for approval of a compromise with the claimants on their abuse of process and malicious prosecution claims filed against the debtor in state court. The debtor objected to the claim. The bankruptcy court conducted a hearing on the motion.

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Consumer opinion summary, case decided on January 26, 2009 , LexisNexis #0309-060

Stathopoulos v. Leader Healthcare Mgmt. (In re Safe Harbour Fla. Health Care Props.)

Ruling
Debtors who did not comply with proper settlement procedure could not claim estoppel on basis of settlement after conversion to chapter 7.
Procedural posture

Plaintiff, a chapter 7 trustee, filed an adversary proceeding against defendants, a management company and individuals. The company and individuals filed a motion for summary judgment, arguing that there were no genuine issues of material fact and that they were entitled to a resolution of their claims in their favor, as a matter of law, under on the doctrine of equitable estoppel, and a dismissal of the complaint.

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Commercial opinion summary, case decided on October 07, 2008 , LexisNexis #1108-070

New Cingular Wireless Servs. v. McCormick

Ruling
Bankruptcy court properly approved trustee's settlement of fraudulent transfer action brought by debtor's shareholders.
Procedural posture

Appellant creditor, wireless service supplier 1, challenged a judgment of the U.S. Bankruptcy Court for the Eastern District of California granting a motion pursuant to Fed. R. Bankr. P. 9019(a) filed by the chapter 7 trustee for approval of a compromise of certain claims asserted by appellees, the shareholders of debtor, a wireless service dealer.

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Commercial opinion summary, case decided on September 11, 2008 , LexisNexis #1108-058

In re Smith

Ruling
Settlement of debtor's discrimination action against former employer approved.
Procedural posture

The chapter 7 trustee filed a motion to compromise and settle the debtor's discrimination claim against his former employer. In the underlying lawsuit, the debtor, along with numerous co-plaintiffs, alleged, inter alia, that the employer's use of a written test known as the work competency assessment to screen employees for inter-division transfers and promotions violated Title VII of the Civil Rights Act of 1964.

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Consumer opinion summary, case decided on September 10, 2008 , LexisNexis #1208-105

In re Equa-Chlor LLC

Ruling
Amended settlement agreement approved as in best interests of debtor and creditors.
Procedural posture

Debtor, a Washington limited liability company, filed a voluntary petition under chapter 11 of the Bankruptcy Code and a motion under Fed. R. Bankr. P. 9019(a) and Bankr. W.D. Wash. R. 9019-1 for entry of an order approving a proposed settlement and compromise. A Committee of Unsecured Creditors filed objections to the settlement agreement.

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Commercial opinion summary, case decided on April 29, 2008 , LexisNexis #0608-133

In re Golden Empire Air Rescue Inc.

Ruling
Settlement of complex state law action with creditors approved.
Procedural posture

The chapter 7 trustees in related bankruptcy cases filed motions to approve settlements entered into with settling creditor. Objecting creditor opposed the motions.

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opinion summary, case decided on September 25, 2006 , LexisNexis #1206-035

In re World Health Alternatives Inc.

Ruling
Court approved settlement agreement as in within reasonable range of litigation possibilities and in interest of estate.
Procedural posture

Debtors in a chapter 11 case moved for entry of an order approving a settlement agreement among the Official Committee of Unsecured Creditors, debtors, and a prepetition lender with a first lien on all of debtors'assets. The trustee opposed the motion.

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opinion summary, case decided on July 07, 2006 , LexisNexis #0806-013