Summary:
The United States Bankruptcy Court, Eastern District of North Carolina, considered a Motion to Approve Compromise where defendants Brian and June Haddock agreed to pay $25,000 to the Trustee in satisfaction of all claims held against them by the bankruptcy estate. Nutrien Ag Solutions, Inc. opposed the motion. The court held a hearing to consider the reasonableness of the proposed settlement. Overruling the objection, the court analyzed the case under the following factors:
- Complexity of the matter;
- Likely expense of trial and collection;
- Estimated time or duration of trial;
- Possible difficulties of collection;
- The amount of the objecting parties' claim; and
- Deference to a trustee's business judgment.
See Protective Comm. for Indep. S'holders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968) and In re Health Diagnostic Lab'y, Inc., 588 B.R. 154, 168 (Bankr. E.D. Va. 2018). Given the financial circumstances of the defendants and the potential difficulties in collecting a larger judgment, the court found that the proposed settlement was reasonable, but given that Nutrien Ag Solutions' claim accounted for 77% of all claims, the court stayed a final decision pending the resolution of an objection to its claim.
Commentary:
While it may seem that this opinion, which delays its own finality pending the resolution of the objection to Nutien Ag Solutions's claim this summer, puts the cart before the horse and is something of an advisory opinion (which may be perfectly permissible from bankruptcy courts in the 4th Circuit following Kiviti v Bhatt), this may in reality have been a judicial thumb on the scale to encourage settlement of that claims objection.
To read a copy of the transcript, please see:
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