In re Kopexa Realty Venture Co.
| Decision Date | 12 November 1997 |
| Docket Number | 95-21262.,BAP No. KS-96-046,Bankruptcy No. 95-21261 |
| Citation | 213 BR 1020 |
| Parties | In re KOPEXA REALTY VENTURE CO., a Kansas General Partnership, Debtor. In re C.K. WILLIAMS, INC., a Kansas corporation, Debtor. Earl E. KOPP and Carolyn Kopp, Appellants, v. ALL AMERICAN LIFE INSURANCE COMPANY; The United States Life Insurance Company in the City of New York; Carl R. Clark, Chapter 11 Trustee for Kopexa Realty Venture Co.; and Darcy Williamson, Trustee for C.K. Williams, Inc., Appellees. |
| Court | U.S. Bankruptcy Appellate Panel, Tenth Circuit |
Dennis Owens, Kansas City, MO, for Appellants.
Carl R. Clark, Lentz & Clark, Overland Park, KS, and Darcy D. Williamson, Topeka, KS (John J. Cruciani, Lentz & Clark, Overland Park, KS, and Richard M. Beheler, Blackwell Sanders Matheny Weary & Lombardi, Kansas City, MO, with them on the brief), for Appellees.
Before CLARK, BOHANON, and MATHESON, Bankruptcy Judges.
This Panel has before it for review the November 8, 1996, order of the United States Bankruptcy Court for the District of Kansas, approving a proposed compromise and settlement. For the reasons set forth below, we conclude that the decision of the bankruptcy court should be vacated and the matter remanded to that court for further proceedings.
A bankruptcy appellate panel, with the consent of the parties, has jurisdiction to hear appeals from final judgments, orders, and decrees of bankruptcy judges within this circuit. 28 U.S.C. § 158(a), (b)(1), (c)(1). As none of the parties have opted to have this appeal heard by the District Court for the District of Kansas, they are deemed to have consented to jurisdiction. 10th Cir. BAP L.R. 8001-1(c).
The Bankruptcy Appellate Panel may affirm, modify or reverse a bankruptcy court's judgment, order or decree, or remand with instructions for further proceedings. Findings of fact shall not be set aside unless clearly erroneous. Fed. R. Bankr.P. 8013; see First Bank v. Reid (In re Reid), 757 F.2d 230, 233-34 (10th Cir.1985). The clearly erroneous standard does not apply to the conclusions of law of the bankruptcy court. Such conclusions are reviewed de novo. Pierce v. Underwood, 487 U.S. 552, 558, 108 S.Ct. 2541, 2546, 101 L.Ed.2d 490 (1988).
C.K. Williams, Inc. ("Williams") and Kopexa Realty Venture Company ("Kopexa") are each debtors in proceedings pending in the United States Bankruptcy Court for the District of Kansas. All of the stock of Williams is owned by Carolyn Kopp. The trustees of the estates of the two debtors, Ms. Williamson for Williams and Mr. Clark for Kopexa, entered into an agreement to resolve certain mutual claims between the two estates. Notice of the compromise was given in each estate, and objections were filed by several interested parties, including Earl and Carolyn Kopp (collectively, "Kopps"), in the Williams estate only. After hearing, the bankruptcy court approved the proposed compromise and settlement and this appeal followed.
There is one technical problem with this appeal that must be addressed. The record reflects that the Kopps filed their notice of appeal "as creditors." The transcript of the hearing discloses that the Kopps are creditors only in the Williams' case, and not in Kopexa. (Tr. 29:20-25). However, when the Kopps filed their notice of appeal, it was captioned in the same manner as the motion to approve the settlement was captioned, that is, in both Kopexa and Williams. Kopexa, being the lowest numbered case, was first in the caption.
The Kopps tendered their notice of appeal and the appropriate filing fee to support an appeal in one case. The clerk docketed the notice of appeal only in Kopexa because only one filing fee was paid. Thus, the appeal was, on the record, only perfected in Kopexa.
Consistent with this state of confusion, the Kopps have captioned their briefs and pleadings in this case as in the Williams' case. They have done the one thing required of them to perfect their appeal by timely filing a notice of appeal captioned, at least in part, in Williams. Fed. R. Bankr.P. 8001(a). That the notice was docketed by the clerk in the wrong case ought not to affect the substantive rights of the Kopps. See Themy v. Yu (In re Themy), 6 F.3d 688 (10th Cir.1993). Accordingly, the notice of appeal filed by the Kopps will be treated as if it had been docketed in Williams and not in Kopexa.
The issue presented on appeal is whether the bankruptcy court abused its discretion in approving the settlement that was proposed by Ms. Williamson as the trustee of the Williams' bankruptcy estate. The decision of a bankruptcy court to approve a settlement must be "an informed one based upon an objective evaluation of developed facts." Reiss v. Hagmann, 881 F.2d 890, 892 (10th Cir.1989). In considering the propriety of the settlement it is appropriate for the court to consider the probable success of the underlying litigation on the merits, the possible difficulty in collection of a judgment, the complexity and expense of the litigation, and the interests of creditors in deference to their reasonable views. Official Comm. of Unsecured Creditors v. Cajun Elec. Power Coop., Inc. (In re Cajun Elec. Power Coop., Inc.), 119 F.3d 349, 356 (5th Cir.1997); American Employers' Ins. Co. v. King Resources Co., 556 F.2d 471 (10th Cir.1977); Kaiser Steel Corp. v. Frates (In re Kaiser Steel Corp.), 105 B.R. 971 (D.Colo.1989). The decision of the bankruptcy court approving a settlement "may be disturbed only when it achieves an unjust result amounting to a clear abuse of discretion." Reiss, 881 F.2d at 891-92.
The authority for a trustee to enter into settlements is to be found in Rule 9019(a) of the Federal Rules of Bankruptcy Procedure. That Rule specifies that the bankruptcy court may, after notice and a hearing, approve a compromise. In the instant case, creditors objected to the proposed compromise, making the disposition of the resulting contested matter subject to the provisions of Fed. R. Bankr.P. 9014. That Rule incorporates, and makes applicable to contested matters, the provisions of Fed. R. Bankr.P. 7052, which, in turn, incorporates Rule 52 of the Federal Rules of Civil Procedure.
Rule 52 of the Federal Rules of Civil Procedure provides, in pertinent part:
(a) Effect. In all actions tried upon the facts without a jury . . ., the court shall find the facts specially and state separately its conclusions of law thereon, and judgment shall be entered pursuant to Rule 58. . . . It will be sufficient if the findings of fact and conclusions of law are stated orally and recorded in open court following the close of the evidence or appear in an opinion or memorandum of decision filed by the court.
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Finley v. Soule (In re Atlas Computers, Inc.), Bankruptcy Case No. 07-11665-M
...court to judge the credibility of the witnesses." Id. Conclusions of law are subject to de novo review. See In re Kopexa Realty Venture Co., 213 B.R. 1020, 1022 (10th Cir. BAP 1997) (citing Pierce v. Underwood, 487 U.S. 552, 558 (1988)). A bankruptcy court's approval of a settlement "may be......