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Ask Maverick Your Own Question
Maverick, Attorney
Category: Estate Law
Satisfied Customers: 5745
Experience:  20 yrs of professional experience.
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My husband and I are going through. Chapter 7 bankruptcy. We

Customer Question

My husband and I are going through. Chapter 7 bankruptcy. We were offered a settlement fee of $8000 by our bankruptcy trustee when he could not sell our property for over 10 months, which we agreed to. He gave us thirty days to come up with the money, but he recieved an offer on the property and made a motion to sell the property in ten days. My question is. Is the trustee in any way legally bound to his first settlement offer that we all agreed to?
Submitted: 2 months ago.
Category: Estate Law
Expert:  Maverick replied 2 months ago.

Welcome! My name is Maverick. Please give me a few minutes to analyze and/or research your inquiry and I will be back.

Expert:  Maverick replied 2 months ago.

Whether the trustee back out or not, he would have had to get the BK court's approval on the settlement. As on BK court noted: “under the ‘fair and equitable’ standard, [courts look] to the fairness of the settlement to the other persons, i.e., the parties who did not settle.” SEE Will v. Northwestern Univ. (In re Nutraquest Inc.), 434 F.3d 639, 645 (3d Cir. 2006).

Furthermore, “in the final analysis, the court does not have to be convinced that the settlement is the best possible compromise. Rather, the court must conclude that the settlement is within the reasonable range of litigation possibilities.” In re Penn Cent. Transp. Co., 596 F.2d 1102, 1114 (3d Cir. 1979); In re World Health Alternatives Inc., 344 B.R. 291, 296 (Bankr. D. Del. 2006). The debtors carry the burden of persuading the court that the compromise falls within the reasonable range of litigation possibilities. In re A & C Properties, 784 F.2d 1377, 1381 (9th Cir. 1986).

Therefore, BK litigants must be aware of the very real possibility that their mutually agreed-upon settlement terms might be rejected by a bankruptcy court.

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