United States District Court, C.D. California
Present The Honorable ANDRE BIROTTE JR., United States
CIVIL MINUTES - GENERAL
Chambers] Order Denying Plaintiffs Bankruptcy Appeal
the Court is Debtor Peli Popovich Hunt's appeal from the
bankruptcy court's February 20, 2019 Decision to Approve
Compromise (Appellant's Excerpt of Record
("ER"), 362-368). Hunt is proceeding pro
se. ("Bankruptcy Court Order"). Having
considered the parties' submissions, the Court deems this
matter appropriate for resolution without oral argument and
affirms the Bankruptcy Court Order.
commenced a voluntary Chapter 11 petition on November 23,
2011. On March 5, 2012, Elissa D. Miller was appointed as the
Chapter 11 Trustee for Hunt's estate. Upon the Chapter 11
Trustee's motion, Hunt's case was converted to
Chapter 7 and Elissa D. Miller was appointed as the Chapter 7
Trustee (the "Trustee").
November 23, 2011, Robert W. Hunt, M.D., a medical
corporation (the "Hunt Corporation") filed a
voluntary Chapter 11 petition. On March 5, 2012, David M.
Goodrich was appointed as the Chapter 11 Trustee of the Hunt
Corporation's estate. The Hunt Corporation's case was
subsequently converted to Chapter 7, upon motion of the
Chapter 11 Trustee and David M. Goodrich was appointed as the
Chapter 7 Trustee.
Trustee and Hunt Corporation Trustee sought approval of a
stipulation, regarding administrative claims filed by the
Trustee. To avoid costly litigation and expedite the
bankruptcy proceedings, the trustees entered a stipulation.
On January 25, 2019, the Trustee filed a motion for approval
of the stipulation, by which the Trustee sought the
bankruptcy court's approval of the Stipulation pursuant
to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure.
The bankruptcy court approved the motion, and Debtor appealed
the decision to this Court.
28 U.S.C. § 158(a), federal district courts have
jurisdiction to review appeals from final orders and
judgments of bankruptcy courts. A bankruptcy court's
approval of a compromise is reviewed for abuse of discretion.
Debbie Reynolds Hotel & Casino, Inc. v. Calstar Corp.
(In re Debbie Reynolds Hotel & Casino, Inc.), 255
F.3d 1061, 1065 (9th Cir. 2001). In applying the abuse of
discretion standard, the court must first "determine
de novo whether the [bankruptcy] court identified
the correct legal rule to apply to the relief
requested." United States v. Hinkson, 585 F.3d
1247, 1262 (9th Cir. 2009) (en banc). If the correct legal
rule was applied, the reviewing court then considers whether
its "application of the correct legal standard was (1)
illogical, (2) implausible, or (3) without support in
inferences that may be drawn from the facts in the
only issue the Court must review on appeal is whether the
Bankruptcy Court Order erred in approving the Trustee's
Motion. Nothing in Debtor's moving papers suggests that
the bankruptcy court committed any error in its decision.
Indeed, upon review of both Debtor's Opening Brief, and
the arguments raised during numerous stages of the bankruptcy
proceeding, it does not appear there is merit, or legal
support for this appeal.
the Bankruptcy Court Order applies the law governing the
approval of a compromise thoroughly and consistent with the
standard discussed in Hinkson. Rule 9019(a) of the
Federal Rules of Bankruptcy Procedure provides the vehicle
for approval of a compromise or settlement. See Fed.
R. Bankr. P. 9019(a).
a compromise should be approved if it is "fair and
equitable" and in "the best interest of the
estate." In re Woodson, 839 F.2d 610, 620 (9th
Cir. 1988). In evaluating whether to approve a compromise,
courts consider: (1) the probability of success in
litigation; (2) the difficulties, if any, to be encountered
in the matter of collection; (3) the complexity of the
litigation involved and the expense; inconvenience and delay
necessarily attending it; and (4) the paramount interest of
the creditors and a proper deference to their reasonable
views. Martin v. Kane (In reA&C Properties), 784
F.2d 1377, 1381 (9th Cir. 1986), cert denied, 479
U.S. 854, 107 S.Ct. 189, 93 L.Ed.2d 122 (1986).
Bankruptcy Court Order lays out in significant detail its
reasons for approving the settlement and provides a thorough
analysis on each of the factors articulated by Ninth Circuit
precedent. The Bankruptcy Court Order discusses that the
stipulation "eliminates the necessity of formal claim
objections, which would involve contested of formal claim
objections, which would involve contested factual issues and
could result in costly and protracted litigation . . .
." Further, the Order discusses the complexity of
potential litigation, and the probability of ...