stating that, in determining whether a compromise is fair and equitable, a bankruptcy judge should form “an educated estimate of the complexity, expense, and likely duration of such litigation, the possible difficulties of collecting on any judgment which might be obtained.... Basic to this process in every instance, of course, is the need to compare the terms of the compromise with the likely rewards of litigation.”
How later courts described this case
- stating that, in determining whether a compromise is fair and equitable, a bankruptcy judge should form “an educated estimate of the complexity, expense, and likely duration of such litigation, the possible difficulties of collecting on any judgment which might be obtained.... Basic to this process in every instance, of course, is the need to compare the terms of the compromise with the likely rewards of litigation.”
- finding that a bankruptcy judge should form “an educated estimate of the complexity, expense, and likely duration of such litigation, the possible difficulties of collecting on any judgment which might be obtained, and all other factors relevant to a full and fair assessment of the wisdom of the proposed compromise.”
- holding that settlements are important in bankruptcy because they “help clear a path for the efficient administration of the bankrupt estate”
- holding that in plan confirmation context, courts must “determine that a proposed compromise forming part of a reorganization plan is fair and equitable.”
Written by the judges who cited it.
The opinion
Mr. Justice Harlan,
whom Mr. Justice Stewart and Mr. Justice Fortas join,
dissenting.
In my opinion, the only question which could be thought even remotely to justify the presence of this case in this Court is whether the trustee, by virtue of his office, was as a matter of law disqualified from being selected as president of the reorganized company. The Court, however, does not decide that question. The review of the massive record in these reorganization proceedings, which have been in the courts for over 10 years and on six occasions before the Court of Appeals at various stages, is not in my view an appropriate task for this Court. Believing that this decision bodes little but further delay in bringing this protracted proceeding to a conclusion, I feel justified in voting to dismiss the writ as improvidently granted, despite the fact that the case was brought here on an unrestricted, writ. Since the Court does not reach the “disqualification” issue, I consider it inappropriate for me, as an individual Justice, to express my own views upon it.