# Appendix — Fishell v. Soltow > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_2029%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1995 - **Citation:** 516 U.S. 862 ## Text 95 20 Jol 199% IN THE SUPREME COURT OF THE UNITED STATES October Term 1994 RICHARD L. FISHELL and DOROTHY M. FISHELL Petitioners vs ROBERT SOLTOW and ROSALEE SOLTOW and JOHN A. PORTER, Trustee Respondents PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT APPENDIX VOLUME I Lester N. Turner 1005 Timber Pass Harbor Springs, MI 49740 (616) 526-9222 Counsei for Petitioners No 94-1109 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT ORDER FILED Apr 06 1995 IN RE: Leonard Green, Clerk Richard L. Fishell and Dorothy M. Fishel] Debtors Richard L. Fishell and Dorothy M. Fishell Plaintiffs-Appellants v Robert Sol tod and Ros al ee Sol tou Def endants- Appel lees John A. Porter, Trustee BEFORE: ENGEL, KENNEDY and SUHRHEINRICH, Circuit Judges The court having received a petition for Al rehearing en banc, and the petition having been circulated not only to the original panel members but also to all other act: e judges of this court, and no judge of this court having requested a vote on the sugges- tion for rehearing en banc, the petition for rehearing has been referred to the original hearing panel. The panel has further reviewed the peti- tion for rehearing and concludes that the issues raised in the petition were fully considered upon the original submission and decision of this! ene. Accordingly, the petition is denied. ENTERED BY ORDER OF THE COURT ea Leonard Green, Clerk pe A2 BEST AVAIL No 94-1109 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT Filed IN RE FISHELL Feb 16 1995 Leonard Green, Clerk Debtors Richard L Fishel l and Dorothy M Fishel] Plaintiffs-Appellants v On Appeal from the United States Dis- trict Court for the Pobert Soltow and Western District of Rosalee Soltow Michigan Defendants-Appellees / Not Recommended for Full Text Publication Sixth Circuit Rule 24 limits citation to specific situations. Please see Rule 24 before citing in a proceeding in a court in the Sixth Circuit. If cited, a copy must BLE COPY be served on other parties and the Court. This notice is to be prominently displayed if this decision is reproduced. BEFORE: ENGEL, KENNEDY AND SUHRHEINRICH, Circuit Judges PER CURIAM. Over objection of the deb- tors, the Bankruptcy Court approved a compromise that settled an adversary pro- ceeding between debtors and their primary creditors, the Soltows. The debtors appealed to the District Court, arguing that the bankruptcy court abused its dis- cretion in approving the compromise. The District Court first ruled that debtors lacked standing to appeal, but then pro- ceeded to reach the merits of the appeal and affirmed the Bankruptcy Court, hold- ing that the court had “apprised itself of the action's underlying facts and made an independent judgment as to whether the settlement was fair and equitable”. (Dist. Ad Ct. Op. at 10). The Debtors now appeal to this court. We affirm. I This case traces its roots back to 1986, when Soltows loaned several hundred thousand dollars to the Fishells. The Fishells used the money to purchase a certain parcel of real estate and gave the Soltows a promissory note and mortgage on the property. In 1988, after Fishells de- faulted on the loan, the Fishells and the Soltows entered into an amended agreement. As part of this agreement, the Fishells exe- cuted a new promissory note, which covered the original amount of the 1986 loan, as well as other interim, unsecured loans made by the Soltows to the Fishells. In return, the Soltows agreed not to start foreclosure proceedings and extended the time for repayment of the loan. As part of the 1988 agreement, the Fishells also executed a warranty deed con- A5 veying the property to the Soltows. This deed was placed in escrow. According to the escrow agreement, if the Fishells de- faulted again, the escrow agent was 4 release the deed to the Sol tous, who vould accept it as payment in full on the loan. If the Fishells did pay the loan in a timely manner, the escrow agent was to return the deed to them. The Fishells did indeed default, and the escrow agent released the deed to the Soltows in March 1989. The Soltows then recorded the deed. In April 1989, however, the Fishells filed suit against the Soltows in Michigan state court, raising claims of fraud, usury, and equitable mortgage, and seeking to invalidate the warranty deed. In conjunction with the suit, the Fishells filed a notice of lis pendens. The Soltows responded to the suit and the filing of the notice by bringing a counterclaim for slan- der of title. A6 After the state suit had been pending for more than a year, the Fishells filed a Chapter 11 bankruptcy petition and removed the adversary proceeding to the Bankruptcy Court. After the bankruptcy proceeding had been pending for just over a year, the Uni- ted States Trustee and several creditors moved to have the petition converted to a Chapter 7 proceeding. The Bankruptcy Court granted the motion, in part because it felt that it could no longer trust Mr Fishel] to comply with the law. The court then appointed a trustee to oversee the estate. After investigating the adversary pro- ceeding between Fishells and Soltows, the trustee negotiated a settlement of that litigation. The terms of the compromise provided that both the Fishells and the Soltows would dismiss their claims against each other and that the court would cancel the notice of lis pendens. The settlement also required the Soltows to pay $2000 A7 into the estate. In return, the Soltows would keep the property as satisfaction for the loan they made to Fishells. The trustee felt this was the most expedient and fair means of resolving the dispute and would enable him to satisfy the claims of the pri- mary prepetition creditors, while still re- serving sufficient funds in the estate to make substantial payments to the other creditors. On June 12, 1992, the trustee filed a motion with the Bankruptcy Court asking it to approve the compromise. The Fishells objected to the compromise, but none of the creditors objected. On July 10, 1992, the Bankruptcy Court conducted a hearing on the trustee's motion and issued an opi- nion from the bench approving the settle- ment. The Fishells appealed the decision to the District Court, which concluded that the Fishells did not have standing to appeal and, even if they had standing, the A Mi Lee e * . = 22 — * Bankruptcy Court had not abused its dis- cretion in approving the settlement. The Fishells now appeal to this court. 11 A. Standing Bankruptcy litigation, unlike other proceedings, has a special doctrine of appellate standing. Not all parties who are entitled to notice in the bankruptcy court are entitled to appeal the rulings of that court. In general, only parties to an adversary proceeding may appeal an order settling that litigation. Courts have, however, also created an exception allowing other ‘aggrieved' parties to appeal. In Re El San Juan Hotel, 809 F 2d 151, 154 (lst Cir 1987). For purposes of the current appeal, the debtors are an aggrieved party only if they can show that a successful appeal would result in an estate whose assets exceeded its lia- bilities. Id. at 155 n 6. A9 rict In ruling on this issue, the Dist- Court stated: The debtors contend that if the trustee had prevailed in the ad- versary proceeding and had suc- cessfully defended the counter- claim, the litigation would have created as estate with assets in excess of liabilities. The Deb- tors provide proof of the proper- ty's value and of Robert Soltow's claim. However, they provide no further information regarding the estate's other assets and liabili- ties, the cost of litigation, or other factors regarding the liti- gation's impact on the estate. The court finds that the debtors have not demonstrated that success in the adversary proceeding would have created an estate with assets in excess of liabilities. Accord- ingly, because the debtors have not shown that they are persons aggrieved by the bankruptcy court's order, the debtors lack standing to appeal. (Dist Ct Op at 5). The record filed with this court on appeal does not contain everything that was presented to the District Court. Based on information available to us, we are unable to say that the District Court erred in resolving the standing issue against the A10 — Fishells. Even if that decision was erroneous, however, it is clear that the Fishells can not succeed on the merits of their appeal. B. Approval of Compromise The Federal Rules of Bankruptcy Procedure provide that 3 lo ln motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Notice shall be given to creditors, the United States trustee, the deb- tor, and indenture trustees as pro- vided in Rule 2002 and to any other entity as the court may direct. Fed. R. Bankr. P. 9019. "The purpose of a compromise agreement is to allow the trustee and creditors to avoid the expenses and bur- dens associated with litigating sharply con- tested and dubious claims...The law favors compromise and not litigation for its own sake,... and as long as the bankruptcy court has amply considered the various factors that determinec the reasonableness of the compromise, the court's decision All must be affirmed." In Re A & C Properties, 784 F 2d 1377, 1380-81 (9th Cir)(citations omitted), cert denied, 479 US 854 (1986). We review a bankruptcy court's approval of a compromise under the abuse of discretion standard. Id. at 1380. The Supreme Court has declared that [It here can be no informed and indepen- dent judgment as to whether a proposed. compromise is fair and equitable until the bankruptcy judge has apprised him- self of all facts necessary for an in- telligent and objective opinion of the probabilities of ultimate success should the claim be litigated. Further, the judge should form an educated esti- mate of the complexity, expense, and likely duration of such litigation, the possible difficulties of collect- ing on any judgment which might be ob- tained, and all other factors relevant to a full and fair assessment of the wisdom of the proposed compromise. Basic to this process in every instance, of course, is the need to compare the terms of the compromise with the likely rewards of the litigation. Protective Committee for Independent Stock- holders of TMT Trailer Ferry, Inc. v Ander- son, 390 US 414, 424-25 (1968). "A bankrupt- cy judge need not hold a mini-trial or Al2 write an extensive opinion every time he approves or disapproves a settlement. The judge need only apprise himself of the relevant facts and law so that he can make an informed and intelligent decision, and set out the reasons for that decision. The judge may make either written or oral fin- dings; form is not important, so long as the findings show the reviewing court that the judge properly exercised his discretion." In Re American Corporation, 841 F 2d 159, 163 (7th Cir 1987). When evaluating the fairness and equity of a proposed compromise, the court should consider: (a)The probability of success in the litigation; (b) the difficulties, if any, to be encountered in the manner of collection;(c)the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it;(d)the paramount interest of the creditors and a proper deference to their reasonable views in the premises. In Re A & C Properties, 784 F 2d at 1381 (quoting In Re Flight Transportaion Corp. Al3 Securities Litigation, 730 F 2d 1128, 1135 (8th Cir 1984), cert denied, 469 US 1207 (1985)). Although it is preferable that these matters be addressed in the Bankruptcy Court's opinion, “[iJf, indeed, the record contains adequate facts to support the deci- sion of the trial court to approve the pro- posed compromises, a reviewing court would be properly reluctant to attack that action solely because the court failed adequately to set forth its reasons or the evidence on which they were based. Id. at 437. While the bankruptcy court's opinion is not quite as specific on some of these issues as we would like, the record before the court clearly supports the approval of the compromise. The Bankruptcy Court had before it the record developed in the state court proceeding, as well as the extensive record developed before the bank- ruptcy court itself. The Bankruptcy Court held several hearings and decided several Al4 motions related to the instant proceeding. These included motions for summary judgment and a formal Rule 2004 examination of Richard Fishell. Accordingly, the Bank- ruptcy Court possessed a good deal of infor- mation and knowledge about the dispute be- tween the Fishells and the Soltows and how that dispute affected the Fishells' other creditors. An examination of the relevant factors Supports the Bankruptcy Court's decision to approve the compromise. The first factor directs the court's attention to the merits of the adversary Proceeding. In this case, there is not great merit to either Fishells' or Soltows'claims. The Fishells brought fraud, equitable mortgage and usury claims against the Soltows arising out of the 1988 amended agreement. The fraud and equitable mortgage claims were highly doubtful, especially in view of Mr Fishell's extensive experience in the real estate business. Al5 That leaves only the usury claims, which, while containing merit, were not for subs- tantial sums of money, probably not what it would cost to litigate those claims. The Soltows’ slander of title claim is likewise not very strong, although it might contain sufficient merit to make it costly to liti- gate. See e.g. Patten Corp. v Canadian Lakes Dev. Corp., 788 F Supp 975 (WD Mich 1991); Kauffman v Shifman, 426 NW 2d 819 (Mich Ct App 1988); Sullivan v Thomas Organ- ization, 276 NW 2d 522 (Mich Ct App 1979). Thus, contrary to Fishells' assertions, the positions of both parties lacked substantial merit, and the estate did not have a strong likelihood of winning much money. The fact-intensive nature of the dis- pute also means that any litigation would be time consuming and expensive. Even if the Fishells were completely victorious and succeeded in revoking the deed, the estate would still owe the Soltows more than half Al6 a million dollars. The sol tous had taken the deed in lieu of foreclosing on the land. Should the deed be invalidated, the Soltows would still have the equivalent of a mort- gage securing their loans to the Fishells. In addition, the Bankruptcy Court explicitly found, the Fishells had established a pat- tern of delaying legal proceedings, which would only add to the estate's expenses. The settlement al loved the Soltows to keep the deed, required them to pay $2000 to the estate, and left sufficient money in the estate to make substantial payments to the Fishells other creditors. These factors support the conclusion that the compromise was the most efficient and economical /way of resolving the suit between the Fishells and the Soltows. The Fishells' primary argument on appeal is that the Bankruptcy Court did not conduct an evidentiary hearing and did not explicitly inquire into many of the factual Al7 issues underlying the adversary proceeding. The court, however, is not requied to go into the detail urged by the Fishells. The result of any such requirement would be vir- tually indistinguishable from a trial, which is the very thing the compromise was designed to avoid. The record before the Bankruptcy Court was sufficient to conclude that those factual matters would be time consuming to resolve and that, regardless of the resolu- tion, the litigation expenses would drain more from the estate than was likely to be recovered. Accordingly, the Bankruptcy Court did not abuse its discretion in approving the compromise, and the District Court was correct to affirm that approval. 111 For the foregoing reasons, we AFFIRM the judgment of the District Court. Al8 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION IN RE Bankruptcy Court RICHARD L. FISHELL and File No NG 90-85144 DOROTHY M. FISHELL Adv Pro No 91-8015 Debtors / RICHARD L. FISHELL and DOROTHY M. FISHELL File No 1:92-cv-845 Plaintiff/Appellants Hon Benjamin F. Gibson v. ROBERT SOLTOW and ORDER ROSALEE SOLTOW Defendants/Appel lees / At a session of the Court held in and for said District and Division in the City of Grand Rapids, Michigan, this 7th day of December 1993. PRESENT: HON BENJAMIN F. GIBSON, U. 8. DISTRICT JUDGE In accordance withthe Opinion dated Al9 December 7, 1993, IT IS HEREBY ORDERED that the United States Bankruptcy Court's July 14, 1992, Order Granting Trustee's Motion to Approve Settlement is AFFIRMED. IT IS FURTHER ORDERED that the follow- ing orders of the United States Bankruptcy Court, entered in pursuance of the July 14, 1992 Order Granting Trustee's Motion to Approve Settlement, are AFFIRMED: Stipula- tion and Order of Dismissal of Counter- Claim entered July 17, 1992; and Stipula- tion and Order of Dismissal and Cancella- tion of Lis Pendens entered July 20, 1992. IT IS FURTHER ORDERED that the debtors’ appeal (filed on September 3, 1992) is DISMISSED. IT IS SO ORDERED ee, BENJAMIN F. GIBSON U.3. DISTRICT JUDGE A20 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION IN RE Bankruptcy Court RICHARD L. FISHELL and File No NG 90-85144 DOROTHY M. FISHELL ‘Adv Pro No 91-8015 Debtors / RICHARD L. FISHELL and DOROTHY M. FISHELL Pile No 1:92-cv-845 Plaintiff/Appellants Hon Benjamin F. Gibson v. ROBERT SOLTOW and OPINION ROSALEE SOLTOW Defendants/Appellees / This case involves an appeal from an order of the United States Bankruptcy Court for the Western District of Michi- gan approving a settlement of an adver- Sary proceeding in appellants’ Chapter A21 7 case. At issue is whether the bank- ruptcy court abused its discretion in approving the settlement. For the reasons stated below, the bankruptcy court's decision is affirmed. I In July 1986, Debtors Richard L. Fishell and Dorothy M. Fishell (“the debtors") and Robert Soltow entered into a promissory note and a mortgage. Soltow loaned the debtors $350,000.00 at 15% interest per year, with semi- annual payments due beginning January 7, 1987, and the principal and all accrued interest due on July 7, 1989. The obligation was secured by a mort- gage on a parcel of real property in Oneida Township, Eaton County, Michi- gan (“the property“). The debtors did not pay any amounts to Soltow under the promissory note. In early 1988, Soltow notified A22 the debtors that the loan was in default and that he would commence foreclosure proceedings if they did not fully repay the loan. In resolution, on August 25, 1988, the debtors and Soltow entered into an amended promissory note, a mort- gage modification agreement, and an es- crow holding agreement. The amended promissory note had a principal sum of $610,446.14 and included additional monies Soltow had loaned to the debtors. Accordingly, the amended mortgage secured indebtedness of $610,446.14. Under the amended promissory note, the debtors had until February 15, 1989, to make full payment. The escrow holding agreement provided that Soltow would place a mortgage discharge in escrow and that the debtors would place an executed warranty deed in escrow. If the debtors did not pay the indebtedness by February 15, 1989, the escrow agent was required A23 to release the two documents to Soltow. Soltow would be entitled to destroy the mortgage discharge and record the warran- ty deed. Conversely, if by February 15, 1989, the debtors paid the full amount owed, the escrow agent was required to release the documents to them. The debtors then would be entitled to des- troy the warranty deed and record the mortgage discharge. The debtors did not make any pay- ments to Soltow. Therefore, pursuant to the escrow holding agreement, the escrow agent delivered the warranty deed and mortgage discharge to Soltow. On March 16, 1989, Soltow recorded the warranty deed in the Eaton County Regis- ter of Deeds. In response, the debtors filed this action against Robert Soltow and Rosa- lee Soltow in the Circuit Court for the County of Eaton, Michigan. The debtors A24 sought to cancel the warranty deed. The debtors alleged fraud, misrepresen- tation, lack of consideration, that the deed was in reality a mortgage, and that the interest on the loans was usurious. The debtors further filed a notice of lis pendens with respect to the property. The Soltows filed a counterclaim, alleg- ing that the lis pendens had slandered title to the property. On November 16, 1990, the debtors filed a voluntary petition for bankrupt- cy under Chapter 11 of the Bankruptcy Code. Thereafter, the debtors removed this action to the bankruptcy court. On January 13, 1992, following a hear- ing on motions filed by the United States Trustee and Robert Soltow 1, the bankruptcy court entered an order con- verting the debtors' case from a Chap- ter 11 proceeding to a Chapter 7 liqui- 1. Creditor Patricia Andre filed a brief in support of the trustee's and Robert Soltow's motions. A25 dation. The debtors appealed and this Court affirmed the bankruptcy co t's decision. The Chapter 7 Trustee hired an attorney to investigate and evaluate the parties’ claims in this action. After analysing the claims and after conducting a hearing of debtor Richard Fishell pursuant to Federal Rule of Bankruptcy Procedure 2004, the Trustee filed a motion to approve settlement pursuant to Federal Rule of Bankruptcy Procedure 9019. The debtors presented the only opposition to the proposed settlement. After a hearing on July 10, 1992, the bankruptcy court approved the settlement. The bankruptcy court denied the debtors’ amended motion for rehearing and/or reconsideration. This appeal followed. 11 Appellees arque that the debtors A2 6 lack standing to appeal the bankruptcy court's order approving the settlement. In In Re Revco DS, Inc., 898 F 2d 498, 499 (6th Cir 1990), the sixth circuit held that in bankruptcy, appellate stan- ding is limited to "persons aggrieved" by the bankruptcy court's actions.2 "Persons aggrieved" are “persons with a financial stake in the bankruptcy court's order.” Id. (citations omitted). The general rule is that the debtor is not a person aggrieved. In Re MCI, Inc. 151 BR 103, 106 (ED Mich 1992). However, 2. The Sixth Circuit further held that the “pecuniary interest" test is not the only test for appellate standing. In addition, "[t]he Supreme Court has held that a public interest may also give a sufficient stake in the outcome of a bankruptcy case to confer appellate standing. In Re Revco DS Inc., 898 F 2d at 499 (citations omitted). However, the debtors do not contend that they have appellate standing based upon the “public interest“ test. A27 under the following two situations a debtor has standing to appeal a bankruptcy court's order: (1){I]£ a successful appeal by the debtor would create an estate that has assets in excess of liabiliities; or (2) an appeal taken from orders that affect the terms, conditions and extent of a debtor's discharge. Id. (citations omitted). The debtors contend that if the trustee had prevailed in the adversary proceeding and had successfully defended the counter- claim, the litigation would have created an estate with assets in excess of liabi- lities. The debtors provide proof of the property's value and of Robert Soltow's claim. However, the provide no further information regarding the estate's other assets and liabilities, the costs of liti- gation, or other factors regarding the litigation's impact on the estate. The Court finds that the debtors have not demonstrated that success in the adversary A28 proceeding would have created: an estate with assets in excess of liabilities. Accordingly, because the debtors have not shown that they are persons aggrieved by the bankruptcy court's order, the debtors lack appellate standing. 111 Even if the debtors were persons ag- grieved by the bankruptcy court's order, this court finds that the bankruptcy court did not abuse its discretion in approving the settlement. Federal Rule of Bankruptcy Procedure 9019(a) provides: On motion by the trustee and after a hearing on notice to creditors, the United States Trustee, the deb- tor and indenture trustees as pro- vided in Rule 2002 and to such other entities as the court may designate, the court may approve a compromise or settlement. q Thus, the bankruptcy court must review all settlements to determine whether they are fair and equitable: In bankruptcy proceedings, as dis- A29 tinguished from ordinary civil cases, any compromise between the debtor and his creditors must be approved by the court as fair and equitable. Protective Committee for Independent Stockholders of TMT Trailer Ferry v Anderson, 390 US 414, 424, 88 S Ct 1157, 1163, 20 L Ed 2d 1 (1968); In Re A&C Properties, 784 F 2d 1377, 1381 (9th Cir) cert denied 479 US 854, 107 S Ct 189, 93 L Ed 2d 122 (1986). In considering a proposed compro- mise, the bankruptcy court is charged with an affirmative obli- gation to apprise itself of the underlying facts and to make an independent judgment as to whether the compromise is fair and equit- able. In Re American Reserve Corp. 841 F 2d 159, 162-63 (7th Cir 1987). The court is not permitted to act as a mere rubber stamp or to rely on the trustee's word that the compromise is reasonable“. Id. at 162. Reynolds v Commissioner, 861 F 2d 469, 473 (6th Cir 1988); see also Bauer v Commerce Union Bank, 859 F 2d 438, 441 (6th Cir 1988) cert denied 489 US 1079 (1989). This court reviews the bankruptcy court's decision to approve the settlement for an abuse of discretion. In Re A & C Properties, 784 F 2d at 1380; In Re American Reserve Corp., 841 F 2d at 162. As the moving party, A30 the trustee bears the burden of persuading the bankruptcy court that the settlement is fair and equitable and that the court should approve the settlement. In Re A & C Proper- ties, 784 F 2d at 1381. In analyzing a set- tlement, “the court is obligated to weigh all conflicting interests in deciding whether the compromise is "fair and equitable", con- sidering such factors as the probability of success on the merits, the complexity and expense of litigation, and the reasonable views of creditors.” Bauer, 859 F 2d at 441 (citing In Re American Reserve Corp., 841 F 2d at 161). When examining a proposed settlement, “[t]Jhe bankruptcy judge may give weight to the opinions of the trustee, the parties, and their attorneys." In Re A & C Properties, 784 F 2d at 1384 (cita- tion omitted). In essence, the bankruptcy court must make an independent judgment that a pro- posed settlement is fair and equitable: A31 As we have recognized in other con- texts the abuse of discretion stan- dard recognizes that because of the bankruptcy judge's unique position, second-guessing by appellate courts will do little to improve upon bank- ruptcy judge's decisions. In exercising his discretion, the bankruptcy judge must also give the reviewing court some basis for dis- tinguishing between well-reasoned conclusions arrived at after compre- hensive consideration of all rele- vant factors, and mere boilerplate approval...unsupported by evaluation of the facts or analysis of the law”. TMT Trailer Ferry, 390 US at 434, 88 S Ct at 1168. In other words, the bankruptcy judge must make findings and explain his reasoning sufficient- ly to show that he examined the pro- per factors and made an informed and independent judgment. In Re American Reserve Corp., 841 F 2d at 162 (citations omitted). However, the bank- ruptcy court is not required to hold a mini- trial or write an extensive opinion: The judge need only apprise himself of the relevant facts and law so that he can make an informed and intelligent decision, and set out the reasons for his decision. The judge may make either written or oral findings; form is not impor- tant, so long as the findings show the reviewing court that the judge A32 properly exercised his discretion. In Re American Reserve Corp., 841 F 2d at 163. Therefore, "as long as the bankruptcy court amply considered the various factors that determined the reasonableness of the compromise, the court's decision must be affirmed. In Re A & C Properties, 784 F 2d at 1381 (citation omitted). At the July 10, 1992, hearing on the trustee's motion to approve settlement, the trustee's attorney and the Sol tous counsel presented arguments in favor of the settle- ment. No creditor opposed the proposed settlement. The debtors made the only ob- jections to the motion. The debtors did not introduce evidence or testimony in opposi- tion to the settlement. The bankruptcy court stated that it had read all briefs that were timely filed. The bankruptcy court further specifically stated that the court had read the debtors' brief in opposition to the settlement. A33 During the debtors’ presentation at the hearing, the debtors filed an additional brief with the court. The debtors’ attor- ney acknowledged that the court would not have time to read the brief during the hearing and he stated that therefore he had argued the brief s contents. Addi- tionally, the release and settlement agree- ment attached to the trustee's motion to approve settlement contained a summary of underlying facts and procedural history along with the factors upon which the settlement was based. After hearing arguments by attorneys for the trustee, the Soltows, and the debtors, the bankruptcy court reviewed the underlying facts of the action and its procedural history. The court found that the adversary proceeding had a long history of delays and that if the action were not settled, more delays would fol- low. The bankruptcy court further found - A34 that the debtors had repeatedly delayed the action and stated that in the court's opinion the debtors did not want the action to come to trial. | The bankruptcy court next commented upon the merits of the claim and stated that the debtors may have had a claim for usurious interest. The bankruptcy court was familiar with the parties' legal theories. At the July 10, 1992, hearing, the debtors' attorney acknowledged that the court had held numerous hearings in this action, including a hearing on the Soltows’ and the debtors’ motions for summary judgment. The debtors’ attorney further stated that both parties had filed „substantial“ motions for summary judgment. This Court notes that the parties had ex- tensively briefed the motions and their respective opposition. The court finds that the bankruptcy court's comments dur- ing the July 10, 1992 hearing demonstrated A35 that it was well versed in the law under- lying the adversary proceeding. The bankruptcy court further noted that no creditor had objected to the pro- posed settlement. The court noted that the debtors had presented the only objec- tion. The bankruptcy court stated that in the court's opinion the debtors wanted to create further expense, which the trus- tee was trying to avoid. The bankruptcy court stated that, generally, courts en- courage settlements and that parties usually are better able that the court to settle actions on a reasonable basis. Based upon its findings and analysis, the bankruptcy court approved the proposed settlement .3 3. Further, at the August 21, 1992, hearing regarding the debtors’ motion for rehearing of the order approving settlement, the bankruptcy judge again discussed the underlying facts and pro- cedural history. The bankruptcy judge again stated that the debtors had re- peatedly delayed the action. The bank- ruptcy court noted that the debtors A36 IV Based upon review of the record in this action, the Court finds that the bankruptcy court fulfilled its affirm- ative obligation to apprise itself of the action's underlying facts and to make an independent judgment as to whether the proposed settlement was fair and equitable. The Court further finds that bankruptcy court's opinion demonstrates that the court amply con- sidered the various factors that deter- mined the reasonableness of the proposed settlement. Therefore, the bankruptcy court did not abuse its discretion in approving the settlement. Accordingly, J. (ent. presented the only opposition to the settlement and that no basis existed for their objections. The bankruptcy court concluded that "the Court felt that the settlement was reasonable and the court approved of the settlement." Accordingly, the bankruptcy court denied the debtors'. motion for rehearing. A37 the bankruptcy court's July 14, 1992, Order Granting Trustee's Motion to Approve Settlement is affirmed. aml Oe BENJAMIN F. GIBSON U.S. DISTRICT JUDGE Dated: December 7, 1993 A38 UNITED STATES BANKRUPTCY ‘COURT FOR THE WESTERN DISTRICT OF MICHIGAN IN RE Chapter 7 RICHARD L. FISHELL and Hon David E. Nims Jr Case No NG90-85144 DOROTHY M. FISHELL Debtors ) / ORDER DENYING MOTION FOR RECONSIDERATION AND AWARDING SANCTIONS At a session of said Court held in the U.S. Bankruptcy Court, Western District of Michigan, this 25th day of August 1992. PRESENT: HON DAVID E. NIMS, JR. U.S. Bankruptcy Judge The Debtors’ Amended Motion for Re- hearing and/or Reconsideration of an Order approving the settlement of a certain adversary proceeding between the debtors, as plaintiffs, and Robert and Rosalee Soltow, as defendants (Ad- versary Proceeding No: 91-8015), having come before the court, the court having heard argument of counsel and finding A39 that there is no basis for the Debtors’ Motion and that the imposition of sanc- tions under Federal Rule of Bankruptcy Procedure 90ll(a) is warranted, the court being otherwise fully advised in the premises; NOW, THEREFORE, IT IS HEREBY ORDERED that the Debtors’ Amended Motion for Rehearing and/or Reconsideration of Order Approving Settlement be and hereby is denied. IT IS FURTHER ORDERED that Roger L. Fishell, the attorney signing the motion, shall pay to Robert Soltow and Rosalee Soltow, through their counsel, Mark A. Bush, the sum of one thousand and 00/100 ($1,000.00) dollars and shall pay the Chapter 7 Trustee, John A. Porter, the sum of five hundred and 00/100 ($500.00) dollars as sanctions for violating Federal Rule of Bankruptcy Procedure 9011. IT IS FURTHER ORDERED that a copy of A40 this order be served by ordinary first- class mail upon the following interested parties: Richard L. and Dorothy M. Fishell, 13625 Tallman Road, Eagle, MI 48220; Roger L. Fishell, Esq., 1900 Main Street, Suite 214, Sarasota, FL 34236; Robert and Rosalee Soltow, 13665 Taliman Road, Eagle, MI 48822: Mark A. Bush, Esq., Fraser, Trebilcock, Davis & Foster, 1000 Michigan National Tower, Lansing, MI 48933; John A. Porter, Esq., 622 Commerce Building, Grand Rapids, MI 49503; Harold E. Nelson, Esq., Clary, Nantz, Wood, Hoffius, Rankin & Cooper, 500 Calder Plaza Building, 250 Monroe Avenue, N. N., Grand Rapids, MI 49503; and U. 8. Trustee, 190 Monroe Avenue, N. F., Suite 200, Grand Rapids, MI 49503. /s/ Hon David E. Nims Jr. U. 8. Bankruptcy Judge Return service copies to: Harold E. Nelson, Esq. 500 Calder Plaza Building 250 Monroe Avenue, NW Grand Rapids, MI 49503 z 41 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF MICHIGAN In re RICHARD & DOROTHY FISHELL Debtors Case No NG90-85144 RICHARD & DOROTHY FISHELL Plaintiffs v Adv Pro No 91-8015 ROBERT & ROSALIE SOLTOW Defendants APPEARANCES: ROGER L. FISHELL, ESQ. 1900 Main St #214 Sarasota, FL 34236 On behalf of the Debtors MARK A. BUSH, ESQ. 1000 Michigan National Tower Lansing, MI 48933 On behlf of the Sol tous HAROLD E. NELSON, ESQ. 500 Calder Plaza Grand Rapids, MI 49503 On behalf of the Trustee TRANSCRIPT This is a transcript of the hearing on the Motion for Rehearing held on Friday, A42 August 21, 1992, at Grand Rapids, Michigan before the HONORABLE DAVID E. NIMS, JR., U.S. Bankruptcy Judge. (p2) The Clerk: Richard and Dorothy Fishell. The Court: This case is before the court for a hearing on the motion for rehearing of an order approving a settle- ment. Record may indicate the appearance of Mr Roger L Fishell, Attorney for the Debtors. Are there any other appearances? Mr Bush: Yes, your Honor. Mark Bush on behalf of Mr and Mrs Soltow. The Court: Any-- Mr Nelson: Your Honor, Harold Nelson representing the Chapter 7 Trustee, John Porter, and the record should reflect that Mr Porter is also in the court- room. The Court: All right. Any other appearances? Apparently not. Mr Fishell you may proceed. Mr Fishell: Your Honor, this is a A43 motion for rehearing as to the court's prior approval of the settlement of the adversary proceeding of the Fishells v. Soltow. Much of--Much of the grounds that are alleged in the motion for re- hearing have been touched upon by both Mr Turner at the hearing approving the settlement and by myself at the prior hearing on the objection to Mr Soltow's claim. Now primarily the basis for the objection and the request for rehearing, aside from the fact that we contend that the settlement was not within the realm of reasonableness, is that it's generally construed in (p3) the rules and in the case law is that the manner in which the court entered upon its consideration of that settlement proposal in reaching the conclusion that the case should be set- tled. Now these matters are not insig- nificant. This involves a substantial, probably the most substantial potential ASS asset that the estate held in this case. Hearings at which settlements are made and approved are designed to be something more than just merely going along with what the trustee and the creditor have entered into on their own. It's not supposed to be something that the court approves just as a matter of form. The rule on approving settlements contemplates something in the order of an evidentiary hearing. Witnesses should be examined, if--if the issues call for it. I think there needs to be something in the record. The Court: Didn't you have an oppor- tunity to present witnesses at the hearing? Mr Fishell: Your Honor, if you will recall, at the hearing, Mr Turner was present on behalf of the Debtors argu- ing in opposition. Now under the rule, the Trustee or the proponent of this A45 settlement has the burden of proving to the court, establishing adequate grounds for approval of that sett le- ment. There were no witnesses called by either Mr Soltow or the trustee. This is the major problem that I had-- that I do have with the manner in which this was approved. It's not a question of whether I can parade in 12 witnesses to (p4) testify to this, that or the other thing. The Court: Well, one--one--Just a moment. One of the purposes of a sett lenent is to avoid a lot of time by the court and a lot of expense for the other parties, and that's the whole purpose of the settlement. An officer of this court has come and has presented this as being a good settlement. No creditor objected. The only ones that have objected is the debtor himself and I am not sure that A46 the debtor has even a position to be heard on this but we have allowed him to be heard. And he could have brought in any testimony he wanted, if he | desired to do so. Mr Fishell: Your Honor, I understand that. I believe the debtor has standing in this case. This is not a no asset case. The debtor certainly has standing to object to a settlement of this nature. Secondly, it's not the burden on the party opposing the settlement to come forward with evidence to show that the settlement should not be approved. The burden of proof is on the proponents of the settlement to esta- blish--- The Court: No. No. No. Mr Fishell: --in the record before the court so the court can have an ade- quate basis to determine whether that settlement meets the standards of A47 reasonableness or not. The record can't simply be devoid of anything in the way of evidence or testimony that supports the reasonableness of that settlement. And that's exactly what we had in this case, (p5) because neither Mr Nelson nor Mr Bush presented any evidence at the hearing. This is my objection. The settlement--The settlement-- The Court: This court--This court has hearings on settlement. On a motion day, we'll have several hearings on a settle- ment. In almost every case, as in this case, nobody shows up to question the settlement. In fact, the court has the right not even to notice out a settle- ment for the people to be heard. Rule 2002 does state that notice will be given to all creditors but that the court can dispense with the notice if the court deems this to be necessary. I didn't--I, in this case, I did notice A48 it out. But there are many settlements we don't even have to notice out. I don't know what your basis is. What are your relying on to--What * your authority for the fact that ve have to have a full blown hearing on every settlement that this court has before it? Mr Fishell: Your Honor, I'm not suggesting that we have a mini trial of the trial of the adversary pro- ceeding. The Court: No. But what is your authority that we have to have a ful] hearing or a hearing of any kind in this? I'll read you 2002. “Except as provided in subdivisions..." And certain other subdivisions. “the clerk, or some other person as" (ps) “the court may direct, shall give the debtor, the trustee, all creditors and indenture trustees not less than 20 days notice by mail of" A49 And then you go down the list. "the hearing on approval of a compromise or settlement of a controversy, other than approval of an agreement pursuant to Rule 4001(d), unless the court--" Got to turn the page here. I can't get the pages. Pages are stuck together. Do you want to get me another book? Do you have one down there? Oh, okay. Here we are. Okay. “the hearing on approval of a compromise or settlement of a controversy, unless the court for cause shown directs that notice not be sent.” So you don't even have to give the notice if some cause is shown. There was no cause shown in this case so-- Mr Fishell: Well, your Honor, I would like to-- The court: --we did give the full notice. Mr Fishell: Well, your Honor, I'm not complaining about the notice aspect of the hearing on the settlement, approving A50 the settlement. My contention is that-- it's that if the settlement is being pro- posed, the proponents have the burden of presenting to the court enough of the facts and circumstances in evidentiary form that would permit the record to show, would permit the court to have a basis for concluding (p7) that the settlement was fair and reasonable under all the circumstances. The Court: Was that your argument at the original hearing? Mr Fishell: At the original hearing, your Honor, Mr Turner was arguing in opposition to the approval-- The Court: Well,-- Mr Fishell: --of the settlement. The Court:--did you handle the Original hearing? Mr Fishell: No, your Honor, I did not. The court: Well, this is a motion for rehearing. How can you come in here and-- A51 Mr Fishell: Your, Honor,-- The Court: --represent the Fishells-- Mr Fishell: Your Honor,-- The Court: --if you weren't present at the original hearing? Mr Fishell: If your will recall, your Honor, Mr Turner did note at that hearing that I was present and in fact I was pre- sent. Mr Turner handled the argument of the hearing. I would like to present copies of a couple of--Well, I have three or four here cases which you are free to examine regarding the standards that are to be applied by the court in considering approving a proposed settlement. (p8) The court: Were these cited to the court at the original hearing? Mr Fishell: I believe not, your Honor, no. The Court: Were they available at that time? Mr Fishell: I don't believe that I had A52 them in my possession at that time. If your recall, your Honor, Mr Turner sub- mitted to you at that hearing a memoran- dum on the subject of Mr Soltow's coun- terclaim regarding slander of title. His major contention at that hearing was that there was no reason to com- promise this case, certainly not for the sums that were being proposed, because the slander of title counter- claim was essentially nonexistent. If there was no slander of title counterclaim, if there was no $250,000 suit or countersuit, there was no reason for the trustee to get nervous and want to settle this case because the estate wouldn't be at risk by continuing the adversary proceeding against Soltow. The Court: Well, we'll have to take our morning recess at this time. We will reconvene in 20 minutes. A53 (Court took a recess) The Court: All right. Mr Fishell. Mr Fishell: Your Honor, I'll provide these to you now, these cases I was referring to. In Re Lion Capital Group, 49 BR 163, In Re Correa, 123 BR 153, In Re Trout, 108 235, In Re Goldstein, 131 367, and In re Energy Co-Op at 886 F 2d 921, also In Re A & C Properties at 784 1377. Those (p 9) cases I believe illustrate the burden that's placed upon the proponent of a settle- ment, and what standards the court must hold them to, and what the evi- dence must show in order to establish an adequate basis for determining that the matter is settled in a reasonable fashion with full information as to the propriety of the settlement. Now the settlement agreement in this case does not recite-- does not recite any of the matters respecting a number A54 of the issues that were raised in the Fishells; complaint including the lack of the failure of consideration for the deed in lieu of foreclosure. The documents themselves don't adequately disclose what the consideration is. It doesn't reveal in any--in any manner that the deed in lieu of foreclosure or any other documents contemplate that the right of redemption which attends every mortgage is being specifically waived. All these things that go into the issue of whether or not Fishells' original claim had substantial merit to it. The issue of usury is not addressed. Mr Turner did a very thorough analysis if the usury issue on the--in the motion for summary judgment. I think that Mr Soltow has conceded that usury was involved in various of the notes that were consoli- dated into the amended promissory note. A55 I think the transaction was one that should have been set aside. I think the lis pendens was properly filed in the case. I don't think it supports any claim or cause of action (p10) for slander of title. I haven't seen any legal authority provided by any of the opponents that would make me believe otherwise. That was one of the things they should have established before this court as a means of apprising you of whether or not you should approve that settlement. They should have been able to show us how this slander of title claim was so viable, how much it was worth, and why the case should be com- promised in the manner and in the amount that it was. In addition, there is one other matter that was raised to me by Mr Barry Gates who is an attorney who is an attorney who is handling the A56 Fishell malpractice case against the Fraser law firm now pending in Circuit Court in Ingham County. And at p 3, the second--the full first complete paragraph he contends or believes, or suspects, or fears, perhaps, that that paragraph contains such a broad dis- charge of Mr Soltow'’s attorneys arising for acts arising out of the real pro- perty transaction at issue here that he fears that this may provide a defense to them in that malpractice claim. I don't see anywhere in the settlement agreement that that was contemplated by either Mr Porter or Mr Soltow, but the language is broad enough to cause him to fear that that may be the case. And, if your Honor does nothing else on this motion for rehearing, it should be at least clarified to make specific excep- tion to that malpractice claim which I understand the Trustee intends to pursue just so that that could be A57 completely (pll) divorced from the settlement of this particular adversary proceeding, that should be specified in any order you make as a result of today. But I think--I think the order approving that settlement needs to be vacated. The order--The order dis- missing the claim and the counterclaim discharging the lis pendens should be set aside. The Court: All right. Mr Bush. Mr Bush: Thank you, your Honor. Your Honor, on behalf of the Soltows, I would like to briefly make several points about this motion this morning. The first is that this is the third occasion that we have been over this same ground; that is, the settlement of the adversary proceeding. All of these arguments were made on July 10. They were made again on (August 7) under the guise of an objection to the coun- A58 terclaim. At that point the court pro- perly ruled that that objection had been mooted by the earlier settlement. We are here again today. I don't think we have heard any new argument that wasn't raised at any of the earlier hearings particularly, the July 10. The purpose of a motion. for xehearing is not to.go... over the same. ground, again and we object to the proceeding being used. in that fashion. „ rs te With respect to the settlement itself, this ig a situation in which following. the conversion .of the case to a chapter 7, an experienced trugtee was appointed who probably in his discretion could have settled this case rather quickly. (p12) Instead, to his credit, he chose to hire outside counsel to. independently go, over the case, make recommendations for settle- ment, and pursue. negotiations to resolve the case, This took place over. a period A59 of months. All the information was brought to the attention of the trustee and the trustee did what he felt was in the best interest of the entire estate. As the court has noted, not a single person has objected to the settlement, not a single creditor, other than the debtors who would be expected to object. As the court further pointed out, the court has been more than fair and patient and lenient with the debtors. The court could have approved the settlement in chambers by issuing an order. It didn't do that. It noticed it out. It again heard argument not only on July 10 but again on (August 7) and again today. The court didn't need to do that but the court did that to be fair to the debtors. I don't want to take the time to go through all the points brought up in the motion. But we think it's well within the court's experience that it is not A60 customary to make the trustee take the stand and be subject to cross-examina- tion, which in this case, your Honor, I can assure you, the intent by Mr Turner would have been to grill John Porter for hours about why he did this or why he did that. We don't think that the bank- ruptcy court is designed to put a trustee through that type of grilling in order to get a simple settlement approved. We (pl3) think that would have been improper. We think that what is going on here is an attempt to try to reliti- gate the whole adversary proceeding under the guise of a motion to approve the settlement. We think that's impro- per. So for these reasons, your Honor, we would ask that the motion be denied. This is the third time I've been over from Lansing on this matter and I am hopeful that at this point this will be the last hearing the court will ever A61 have on this adversary proceeding. And that the relief, if any, for the debtors will come from the Appellate court. This being the third time we have been over on this, your Honor, we would ask for sanctions under Rule 11. We would ask for $1,000 assessed against Mr Fishell, Roger Fishell, not against the estate. The estate does not deserve that. But we have an attorney here, actually two attorneys who are putting the court and the party through a lot of nonsense is what we believe it is and we think it ought to stop. And we would ask that the motion be denied and that sanctions in the amount of $1,000 be assessed. The Court: Mr Nelson. Mr Nelson: Thank you, your Honor. For the most part, I agree with Mr Bush. I think that this indeed is the third time we have covered the ground concerning the merits of the case and how it was A62 evaluated. Quite frankly, I have never spent as much time in my career trying to evaluate the merits (pl4) of a claim and counterclaim as I have in this case. My file in this matter is a foot thick. And for all intents and purposes, it's been solely--my services have been con- fined to attempting to evaluate and ultimately resolve this one adversary proceeding. We went so far as to conduct a lengthy Rule 2004 examination of Richard Fishell before we ever made our final determination as to what should be done with this adversary proceeding. Suffice it to say, we have a different view of the merits than do the debtors. The only new issue that I believe has been raised by the debtors in this motion for reconsideration is essentially the question of whether the settlement agree- ment whereby this adversary proceeding was resolved somehow releases the Fraser A63 law firm from a pending malpractice case in the Ingham County Circuit Court. I can state unequivocally that it was not the trustee's intention to release anyone from any other litigation. The intention of the trustee was to simply resolve the Soltow adversary proceeding, not to resolve in any manner the pending malpractice claim against the debtors--against the Fraser firm. I believe that Mr Bush shares that interpretation of the settlement agreement that indeed it does not release, or somehow resolve, or discharge the mal- practice action. For the record I should state, however, that the Trustee has not made a determination whether the estate intends to pursue that action or not. Quite frankly, we have not even begun to evaluate the (p15) merits of that case. And I guess that's something that's left for the trustee and counsel to do on another day. But, to clarify, I guess A64 the impact of this settlement agreement on that other litigation, I would ask that Mr Bush indicate to the court the interpretation of his law firm with res- pect to whether or not it is somehow re- leased from any potential liability under that Ingham County Circuit Court action. Mr Bush: I agree with Mr Nelson, your Honor. The intent of this settlement was to have nothing to do with the malpractice case. We studiously attempted to keep them separate, primarily for the benefit of our client, Mr Soltow. There may be some issues that are related, obviously if you look at the complaint and the two cases, they all say about the same thing. That Mr Fishell didn't understand these documents and so forth when he entered into them. There may be some questions interms of res judicata of the decision that Judge Eveland made back in Ingham County Circuit court back in 1990 but, as far as this A65 settlement agreement, we do not view that as releasing ourselves from that Ingham County malpractice litigation. The Court: Anything further, Mr Fishell? Mr Fishell: Just briefly to reiterate, your Honor. I think that it's unfortunate. Personally, I believe this--this whole thing should have been resolved otherwise. But, aside from that, forgetting that for a minute, in order for (p16) the court to appropriately determine a proposed settlement, the court must do something more than rely upon essentially what are little more than general representations made by the proponents of the settlement. In order for the court to validly deter- mine the reasonableness of a settlement, it must make some independent examination of the facts and the circumstances sur- rounding the case and what the trustee went through in arriving at his conclusion. That wasn't done in this case. That's the A66 reason for the motion. That's the reason that this matter should be set aside and reheard. Thank you, your Honor. The Court: This case comes before the court for a hearing on a motion by Richard L. Fishell and Dorothy M. Fishell for a rehearing or a reconsideration of the pre- vious order of this court approving a settlement of adversary proceedings between the debtors and Robert Soltow and Rosalie Soltow. The underlying proceedings in this case commenced sometimes prior to the filing date of this case. There was a case pend- ing in the state court, as I recall, and had been pending for some time at the time that this voluntary Chapter 11 proceedings was filed by the Fishells with this court. That adversary proceeding was brought over from the state court to this court as an adversary proceeding and has been pending A67 ever since until the attempt to settle the proceedings after the Chapter 11 case had been converted to a case under Chapter 7. (p17) The original case, as I recall, and it's been so long now I may be a little hazy on the facts, but it involved a mortgage or land contract, I don't remember which, between the Soltows and the debtors. There had been nonpayment on the mortgage--or it's a land contract--for some time and finally there had been a foreclosure pro- ceedings commenced. And, as a settlement of that foreclosure proceedings, there was worked out a proceedings where the Soltows executed a dicharge of the mort- gage in question. I guess it must have been a mortgage now because I think it was a discharge of the mortgage, or may- be it was a quitclaim deed, I can't remember which, but one of the two. And also the debtors executed a deed to the property in question. These documents A68 were turned over to Transamerica Title Company, as I recall, a completely dis- interested party. And the agreement was that if a payment was not made on the-- or if the mortgage was not paid, the American Title Company would turn over the deed to Mr Soltow. If the money were paid, then the title company would turn over a full discharge to the Fishells. The money was not paid and the American Title Company did turn the deed over to Soltows. 80 there was a deed on record from the Fishells to the Soltows and this was duly recorded. And then this proceed- ings, the adversary proceedings was then brought in the state court to set aside the deed and to indicate that it was actually a mortgage. The case ig gered for a long time in the state courts and then was (pl8) brought into this court. There was delay, after delay, after delay. A69 The court did everything possible to try to move this case along but everytime that the court would take some action, there would be counteraction by the Fishells and their attorney to delay the matter further. Finally we had a pretrial on the proceedings. One of the things that came up at the time of the pretrial was a matter of a jury trial. And here again the court felt that there was no right to a jury trial under these-- under the provisions, and the court held that we would proceed and a trial date was set, we would proceed with a speedy trial. However, before the trial date came, there was an appeal taken to the District Court, as the Fishells had the right to do, on the matter of the jury trial. That matter lingered for some time before the District court and eventually the District Court affirmed the bank- ruptcy court and returned the matter to A70 the bankruptcy court. And then I can't remember just what happened after that but somewhere along the line there was a transfer of the case to case under Chapter 7. And I believe that when Mr Porter got into the matter, for the first time there was progress made and for the first time the matter was brought to a settlement. Mr Porter felt that under the circumstances he should obtain an expert bankruptcy attorney. He retained Mr Nelson's firm. Mr Nelson did agree to handle the case. As Mr Nelson (pl9) has indicated here today, he spent a lot of time investi- gating into whether or not there should be a settlement and there were a lot of reasons for the settlement. And the court felt that the settlement was reasonable and the court approved the settlement. Since then, we have had--the Fishells A71 have objected to the settlement. They're the only ones that have objected, the debtors themselves. And not one creditor objected. The whole purpose of the right to settle proceedings especially in the bank- ruptcy court is to prevent what has hap- pened here, untold amount of fees that have been generated because of the tremendous number of delays that have taken place in this court and not only in the adversary proceedings but in other ways. So this court is satisfied that there is no basis for the objection. The court feels that the only thing that this hearing today has caused is more expenses, more reason why the creditors of the Fishells would not receive any funds on hand. Not only has the estate had more fees run up by reason of the attorney, the appearance of the attor- A72 ney and the appearance of the trustee in this--at this hearing, but also Mr Soltow, he's had ample expenses. He's had to pay the taxes on this property over all this time. I have not heard that the Fishells ever claimed that they were the persons that should pay the taxes. I don't think they have paid them. I (p20) think, as I recall, the testimony was that Mr Soltow has paid all the taxes, all the expenses on the property. Not one cent has been paid by the Fishells, at least there's been no testimony in that court--in this court to that effect. So the court would hold that the motion for recon- sideration is dismissed and denied. Now the question comes up as to sanctions. Mr Bush has asked for Sanctions. Certainly the estate should not have to pay more money of the creditors for the expense that has A73 been incurred in getting ready for this hearing and for the holding of the hearing itself. The only thing here is of course Mr Nelson didn't have to come from Lansing as did Mr Bush. So I guess now, Mr Fishell, the court would ask you, is there any reason why sanctions should not be imposed under Bankruptcy rule 9011, Rules of Civil Procedure 11? Mr Fishell: Well, your Honor, as I understand that rule, that requires something to be done that is unneces- sarily--unnecessary and basically frivolous. None of the arguments that I have advanced either today or the last time that I was here should be categorized in that nature. The Court: We're not talking about any sanctions for any hearing except the one today. You had the perfect right to make the hearings the last A74 time but this time we are re-- as far as the court can determine, we are just going right over the same materials, the same matters that we had before. (p21) Mr Fishell: I understand that, your Honor. But one of the purposes of a motion for rehearing is to offer you an opportunity to correct something that you may have made a mistake about the first time, even if it's not some- thing new and completely different. I mean, why would you have a rehearing if you had to dredge up something new that you didn't argue the first time? That wouldn't --That wouldn't make any sense. You might--could--You might be faced with the argument if you didn't raise it before, it was waived. So one of the purposes of a rehearing, to my way of thinking, is to point out to the court where they made a mistake A75 the first time. That's perfectly proper. It's perfectly reasonable. Now I agree that when I was here the prior time on the objection to claim, that matter was set by the court and I appeared. I came from Florida. I came from Florida again today. This hearing today is perfectly proper. It's provided for by the rules. If nothing else, we have addressed an issue in the - in the settlement agree- ment that we didn't cover before. Mr Bush and Mr Nelson have both acknow- ledged that that point on that point that there was no intent to abandon or compromise the malpractice claim. That was the basis of my argument on that point. And I still--I stand by the arguments that I have made today. I have made them in good faith. I believe the law supports the positions I have taken. This (p22) is not some- A76 thing that I have come here merely for the purpose of delay or expense because I have had to be put to some expense of my own. And that’s why I don't think that any--anything in the nature of sanctions are appropriate. The Court: Mr Nelson. Mr Nelson: Well, your honor, as I indicated in my prior remarks, the only thing that I saw that was new in the motion for reconsideration was this, I guess, request or issue raised as to how does this settlement attempt to affect the malpractice case? Bu’. I don't think that vas necessary because I mean there was no- that wzs not an issue as between the trustwe and Mr Soltow’s counsel. We understood how it affected that case. It didn't affect that case. It was never intended to affect that case. It seems that this was an issue or a A77 question only in the minds of the Fishells; it certainly wasn't a question in our mind. Nothing has really been clarified that--except perhaps to the debtors. It was al- ready clear, there was a clear under- standing between us and the Soltows and the counsel. Mr Fishell: Your Honor, if I could respond to that. As I mentioned earlier it was Mr Gates who is the attorney who was hired by the Fishells to prosecute that malpractice claim who when he received this sometime after it was approved raised this issue with me. I | made that a part of my motion because of his concerns. Now, if for some reason the (p23) trustee were to aban- don that case to the Fishells, then cetainly the Fishells would have an interest in knowing and having it clarified, because how--what would be- A78 — what would prevent the Fraser firm from raising that issue as a defense in the circuit court case if it ever came to that? Now it's fine that the trustee and Mr Bush recognize between themselves the meaning of it. Mr Gates was concerned, that's the reason it was raised. And if there is something that can be made a part of the order today that clarifies that point, I think that would serve the interest of all in the end. The Court: I'm not clear. Is the malpractice suit, is that an asset of this estate? That--Isn't that for things that happened after the filing of the original petition back in 19-- Let's see.--1990? Mr Bush: Your Honor, what has been alleged is arises out of the same nucleus of operative fact as does the adversary proceeding. In other words, A79 the allegation is that when these docu- ments were drawn in 88, the escrow agreement that the attorney for my firm who did that, Mr Austin, did so impro- perly and in a way the Fishells contend was malpractice. The Court: Does this go back to 887 Mr Bush: Yes The Court: Longer than I thought. Four years. Mr Bush: Your Honor, we think that case is probably more frivolous than this case, given that Judge Eveland (p24) in the state court has already entered a three page opinion after hundreds of pages of testimony finding no improprieties on the part of our firm. The Court: But that was before the filing so it would be an asset of this estate. Mr Bush: Interestingly, your Honor, that that case was filed prior to the A80 bankruptcy filing, was not disclosed, was concealed from this court at the time of the bankruptcy filing and only came up upon further discovery and ‘is amended schedule. So this is also some- thing that bears on this. Mr Fishell: Your, honor, there is-- there was never--That's been an allega- tion all along that was willfully con- cealed. That's not the case. But the suit was-- The Court: Well, it was put in the schedules then? Mr Fishell: It was omitted from the original schedules, that's correct, your Honor. He is correct on that point. The Court: Well, it was concealed then. The schedules were signed under penalty of perjury. Mr Fishell: That's correct, your Honor. But there is--I deem a difference bet- A81 ween inadvertence and concealment. That's the point I was trying to make. But this suit was commenced prior to the petition being filed. The Court: It shows they didn't think much of, their suit to start with.(p25) Well, the court is of the opinion that sanctions should be imposed upon counsel and sanctions will be allowed in the sum of 81,000 for the payment of the fees and expenses of Mr Soltow. And the court, as the court has stated, certainly the creditors should not have to pay for this unnecessary proceeding. And so the court would indicate that there shall be paid to the estate the sum of 8500 to cover preparation and the attendance of this proceeding by Mr Nelson. Mr Nelson, would you prepare the orders for the Court? Mr Nelson: I will, your Honor. Am I A82 ... CC w correct on the sanctions are on the debtors’ counsel? The Court: On Mr Fishell. Roger Fishell. Mr Nelson: Okay. I will prepare the order, your Honor. The Court: I assume that he's the one that signed the motion. Mr Turner did not sign the motion. Mr Bush: That's correct, your Honor. Mr Fishell: That's correct, your Honor. Mr Bush: Thank you, your Honor. The Clerk: How about the other one, Judge? The Court: Pardon? The Clerk: The other Fishell matter. The Court: oh, we have another Fishell. Well, that matter is moot now. That was for a stay pending the (p26) court's determination of the reconsideration. Since the court has already done that A8 3 and disposed of that matter, that matter is moot. Mr Bush: Thank you, your Honor. Mr Fishell: Thank you, your Honor. Mr Nelson: Thank you, your Honor. * * * REPORTER'S CERTIFICATE I, Gail L. Beach, do hereby certify that the foregoing is a true and accurate transcript of the hearing held on Friday, August 21, 1992, at Grand Rapids, Michigan, before the HONORABLE DAVID E. NIMS, Jr., U. 8. Bankruptcy Judge, consisting of 26 pages. „ Gail L. Beach, CSR257 4 Certified Shorthand Reporter 6863 Mildred SE Grand Rapids, MI 49508 A84 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF MICHIGAN In Re: Richard L. Fishel l and Dorothy M. Fishell Case No NG90-85144 Debtors Richard L. Fishell and Dorothy M. Fishell Plaintiffs vs Adv Proc No 91-8015 Robert Soltow and Rosalee Soltow Defendants Harold E. Nelson P27974 Attorney for John A. Porter, Trustee of the Estate of Richard L. and Dorothy M. Fishell, Debtors 500 Calder Plaza Grand Rapids, MI 49503 (616) 459-9487 Mark A. Bush P35775 Attorney for Soltows A85 1000 Michigan National Tower Lansing, MI 48933 (517) 482-5800 ORDER At a session of said Court, held in the City of Grand Rapids, Michi- gan, this 24th day of July 1992. PRESENT: HONORABLE DAVID E. NIMS JR. U.S. BANKRUPTCY JUDGE The Debtors, Richard L. Fishell and Doro- thy M. Fishell, having filed a document on June 22, 1992 entitled Objection to Claim, the same pertaining to a certain slander of title claim raised by Robert Soltow in the above referenced adversary proceeding, said Debtors’ Objection having come on for hear- ing before the court on July 22, 1992, the court having heard oral argument and having otherwise been fully advised in the premises; IT IS HEREBY ORDERED AND ADJUDGED that the aforementioned claim by Debtors is moot because of the court's July 10, 1992 appro- val of settlement of the adversary proceed- A8 6 ing, said settlement including disposition of the slander of title claim made by Rob- ert Soltow. The. request for sanctions made by counsel of Robert Soltow is hereby ordered held in abeyance pending hearing on a motion for 8 filed on behalf of the Debtors. /s/ David E. Nims, Jr. U.S. Bankruptcy Judge A87 UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF MICHIGAN IN RE | RICHARD L. FISHELL and Case No 90-85144 DOROTHY M. FISHELL Debtors / RICHARD L. FISHELL and DOROTHY M. FISHELL Adv Pro No 91-8015 Plaintiff/Appellants V. ROBERT SOLTOW and ROSALEE SOLTOW Defendants/Appellees / Harold E. Nelson Attorney for Trustee, John Porter 500 Calder Plaza Grand Rapids, Michigan 49503 (616)459-9487 Mark A. Bush Attorney for Defendants 1000 Michigan National Tower Lansing, Michigan 48933 (517) 482-5800 A8 8 7 FER ee mR eT ta ae ba Sen a a 3 * fs AMENDED MOTION FOR REHEARING AND/OR RECONSIDERATION OF ORDER APPROVING SETTLEMENT Pursuant to Rule 9023 of the Bank- ruptcy Rules of Procedure the Debtors move the court for rehearing and/or reconsideration of the order of this court entered on the 14th day of July 1992 wherein the court approved the settlement of the above styled adversary proceeding and the Debtors show as grounds: 1. The court failed to conduct even the most rudimentary evidentiary inquiry into the merits of the Trustee's motion or the legal issues raised by the com- plaint and counterclaim. 2. The court failed to require any support, by way of citation of legal auth- ority, for the position adopted by the A8&9 Trustee on any legal issue raised by the complaint or counterclaim. The failed entirely to consider the legal argument presented by the attorney for the debtors when offered at the hearing. 3. The court failed to consider signi- ficant legal issues raised by the complaint such as usury, the circumstances surround- ing the execution of the documents on 25 August 1988 and the role of the Soltows'/ Fishells‘ common attorney in procuring same; the law regard.ag the construction of deed as mortgage when given under cir- cumstances of this case; misinformation and misrepresentation concerning the docu- ments and their legal effect and the issue of fraud. Further, the court failed to consider the substantial absence of merit associated with the counterclaim for slander of title in that neither the Trustee nor Soltows presented any legal authority for the proposition that the A90 filing of a lis pendens vould serve as any basis for such a claim. Further, the Trustee and Soltows failed to note any statutory basis for such a cause of action. 4. The arguments advanced by the Trustee and Sdoltows were couched in gener- alities and were speculative in nature. Insufficient evidence was offered to support any of the reasons advanced in support of approval of the settlement. 5. The court's ruling, announced orally at the conclusion of the argument, conceded the possibility of error in recollection and focused primarily on the origin of the Fishell/Soltow dis- pute in 1988. The court focused only on its having originated as an agreement and did not consider the circumstances alleged in the complaint which would have vitiated any such agreement. 6. The court failed to require any A91 concrete showing from the moving parties which would have been sufficient to meet the test of reasonableness required for such compromises and the court failed to adequately apprise itself of suffi- cient facts upon which to render an in- formed decision as to any aspect of the complaint or counterclaim. In particu- lar, the court was provided with no sup- port for the purported slander of title claim nor how Soltows' damages, if any, might be estimated. 7. The court misapprehended the purpose and effect of the lis pendens, failed to consider how Sol tous might have mitigated any damages“ suffered and failed to note how any such damages are limited by the applicable statute. 8. The slander of title claim was not adequately considered by the court or the moving parties and its lack of merit was of particular significance. A92 1... »A B— T ̃²— v Without a slander of title claim, the estate was not at any arguable risk should the litigation continue. The court should have given greater 1 tion to this issue particularly where an objection specifically directed to that claim was noticed for hearing before the court. 3 The court, in its oral ruling, focused also on what it considered delays and speculated about future delays. This was not warranted given that the trial was set for August 1992. The reference to delay attending the appeal of the jury issue was also un- warranted because it was a meritorious issue which the debtors raised. 10. The settlement requires clari- fication to the extent that it may have any effect on the legal malpractice claim pending in the Ingham County Circuit Court. To the extent that the settlement and the A93 order approving it m4. be construed as relieving the Fraser law firm of liability on such claim, the settlement and court approval was entirely in error, was with- out consideration, was without appropriate notice and was without explicit factual or legal basis. Wherefore, the Debtors pray the court to grant any and all relief appropriate with respect to the order of 14 July 1992, including but not limited to vacating the same in its entirety, and to grant any and all relief appropriate under Rule 9023. /s/ Roger L. Fishell 1900 Main Street, Suite 214 Sarasota, Florida 34236 (813) 351-2883 Attorney for Debtors (Certificate of Service Omitted) A94 a Seba 3 FFC TINS ERAN ARIF TD UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF MICHIGAN IN RE RICHARD L. FISHELL and Case No N90-85144 HON DAVID E. NIMS JR DOROTHY M. FISHELL Chapter 11 Debtors / 8 on PERS: EGFR CLONE RIE e eren Fe RICHARD L. FISHELL and DOROTHY M. FISHELL Plaintiffs V. ROBERT SOLTOW and ROSALEE SOLTOW Defendants Harold E. Nelson Attorney for John Porter, Trustee of the Estate of Richard L. Fishell and Dorothy M. Fishell, Debtors 500 Calder Plaza Grand Rapids, Michigan 49503 (616)459-9487 Mark A. Bush Attorney for Defendants 1000 Michigan National Tower Lansing, Michigan 48933 (517) 482-5800 A95 Adversary No 91-8015 STIPULATION AND ORDER OF DISMISSAL AND CANCELLATION OF LIS PENDENS The parties 3 stipulate and agree that the above-referenced adversary pro- ceeding having been amicably resolved pursuant to Release and Settlement Agree- ment of June 12, 1992, thesame being in- corporated herein by reference, the same shall be dismissed with prejudice and without costs to any party. The parties further hereby stipulate and agree that a certain Notice of Lis Pendens, des- cribed in the aforementioned Release and Settlement Agreement and recorded in Liber 795, Page 409 with the Eaton County Register of Deeds on May 1, 1989 with respect to certain real property described in the aforementioned Release and Settlement Agreement is hereby can- A96 celled. _/s/ /s/ Harold E. Nelson Mark A. Bush Attorney for Attorney for Soltows Trustee of Fishells Dated: 7/14/92 Dated: July 13,1992 ORDER At a session of said Court, held in the City of Grand Rapids, State of Michigan this 20th day of July, 1992. PRESENT: HONORABLE DAVID E. NIMS JR., U. S. Bankruptcy Judge Upon reading and filing the Stipulation of the parties hrein and the Court being fully advised in the same: IT IS HEREBY ORDERED that the above- referenced advesary proceeding having been amicably resolved pursuant to Release and Settlement Agreement of June 12, 1992, the same being incorporated herein by refer- ence, the same shall be and are hereby dismissed with prejudice and without costs to any party. A97 IT IS FURTHER ORDERED that the Notice of Lis Pendens recorded in Liber 795, Page 409 Eaton County register of Deeds on May l, 1989 is hereby cancelled. /s/ DAVID E. NIMS JR. U. S. Bankruptcy Judge A98 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF MICHIGAN IN RE RICHARD L. FISHELL and Case No N90-85144 HON DAVID E. NIMS JR DOROTHY M. FISHELL& ö Chapter 11 Debtors / RICHARD L. FISHELL and DOROTHY M. FISHELL Adversary No 91-8015 Plaintiffs V. ROBERT SOLTOW and ROSALEE SOLTOW Defendants Harold E. Nelson Attorney for John Porter,- Trustee of the Estate of Richard L. Fishel] and Dorothy M. Fishell, Debtors 500 Calder Plaza Grand Rapids, Michigan 49503 (616) 459-9487 Mark A. Bush Attorney for Defendants 1000 Michigan National Tower Lansing, Michigan 48933 (517) 482-5800 A99 STIPULATION AND ORDER OF DISMISSAL OF COUNTER-CLAIM | Now come the parties hereto, by and through their attorneys, and hereby stipulate and agree that the above- referenced adversary proceeding having been amicably resolved, the counter- claim brought by Defendants Robert Sol- tow and Rosalee Soltow against Debtors Richard L. Fishell and Dorothy M. Fishell shall be dismissed with pre- judice and without costs to any party. /s/ /s/ Harold E. Nelson Mark A. Bush Attorney for Attorney for Soltows Trustee of Fishells Dated: 7/14/92 Dated: July 13,1992 ORDER At a session of said Court, held in the City of Grand Rapids, State of Michigan this 17th day of July, A100 a ee 1992. PRESENT: HONORABLE DAVID E. NIMS JR., U. 8. Bankruptcy Judge Upon reading and filing the Stipulation of the parties herein and the Court being fully advised in the premises: IT IS HEREBY ORDERED that the above- referenced advesary proceeding having been amicably resolved, the counter-claim brought by Defendants Robert Soltow and Rosalee Soltow against Debtors Richard L. Fishel] and Dorothy M. Fishel] shall be dismissed with prejudice and without costs to any party. /s/ DAVID E. NIMS JR. U. 8. Bankruptcy Judge A101 UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF MICHIGAN In Re: Chapter 7 RICHARD L. FISHELL AND DOROTHY M. FISHELL Debtors Hon David E. Nims Jr. Case No NG90-85144 ORDER GRANTING TRUSTEE'S MOTION TO APPROVE SETTLEMENT At a session of said Court held in the U.S. Bankruptcy Court, for the Western District of Michigan, this 14th day of July 1992. PRESENT: HON DAVID E. NIMS, JR. U.S. Bankruptcy Judge The Trustee's Motion to Approve Set- tlement, filed June 12, 1992, having come before the court for hearing on July 10, 1992, and the court being familiar with the pleadings and other matters of record appearing in the court's file in this case and in the adversary proceeding which is A102 the subject matter of the Trustee's Motion, the court having heard argument of counsel, and the court being otherwise fully advised in the premises; NOW, THEREFORE, for the reasons stated on the record at the hearing, IT IS HEREBY ORDERED that the proposed settlement between the Trustee and Robert and Rosalee Soltow, which is more fully set forth in the Release and Settlement Agreement dated June 12, 1992 between said parties, be and hereby is appro- ved and authorized, nunc pro tunc to the date of the hearing, July 10, 1992. IT IS FURTHER ORDERED that a copy of this Order be served by ordinary mail upon the following: Gary C. Rowers, Prager Trebilcock, Davis & Foster, P. C. 1000 Michigan National Tower, Lansing, MI 48933; Robert and Rosalee Soltow, 13665 Tallman Road, Eagle, MI 48822; Lester N. Turner, Esq., 1005 Timber Pass, Harbor Springs, MI 49740; John A. Porter, Esq., 622 Commerce Building, Grand Rapids, A103 MI 49503; Richard L. and Dorothy M. Fishell, 13625 Tallman Road, Eagle, MI 48822; and US Trustee, 190 Monroe Avenue, NW, Suite 200, Grand Rapids, MI 49503 /s/ Hon David E. Nims, Jr. U. S. Bankruptcy Judge Return Service Copies to: Harold E. Nelson, Esq. 500 Calder Plaza Building 250 Monroe Avenue, NW Grand Rapids, MI 49503 A104 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF MICHIGAN In Re: Richard and Dorothy Fishel] Case No NG90-85144 Debtors Richard and Dorothy Fishell Plaintiffs vs Adv Proc No 91-8015 Robert and Rosalie Seiten Defendants Hearing on the Trustee's Motion to Approve Settlement in the above-entitled matter taken on the 10th day of July 1992, at the Federal Building, Grand Rapids, Michigan, before the Honorable David E. Nims, Jr., U. 8. Bankruptcy Judge. A105 APPEARANCES On Behalf of Plaintiffs: Lester N. Turner Attorney at Law 1005 Timber Pass Harbor Springs, Michigan 49740 On Behalf of Defendants: Fraser, Trebilcock, Davis & Foster Attorneys at Law By: Mark A. Bush By: Gary C. Rogers 1000 Michigan National Tower Lansing, Michigan 48933 On Behalf of the U. S. Trustee Clary, Nantz, Wood, Hoffius, Rankin and Cooper Attorneys at Law By: Harold E. Nelson 500 Calder Plaza Grand Rapids, Michigan 49503 Also Present: John A. Porter, Trustee 622 Commerce Building Grand Rapids, Michigan 49503 Robert Soltow A106 Grand Rapids, Michigan (p.) 3 July 10, 1992 * * * The Clerk: Richard and Dorothy Fishell The Court: This case is before the court for a hearing on the trustee's motion for the approval of proposed settlement be- tween the trustee and Robert Soltow and Rosalie Soltow. The record may indicate the appearance of Mr Harold E Nelson repre- senting the trustee. We have mr Mark A Bush the attorney for the Soltows, and is Mr Roger Fishell here? Mr Turner: He's not here to argue today, Your Honor. The Court: Pardon? Mr Turner: He's not here to argue today, no. The Court: Is there anyone-- Mr Turner: I'm appearing. The Court: Is Richard L. Fishell present? Mr Turner: My name is Lester N. Turner. I'm appearing on behalf of the Fishells, Your A107 Honor. The Court: Oh, Roger Fishell, apparently, signed as attorney in the filing of an ob- jection. So, Mr Turner, you are represent- ing the Fishells now? } Mr Turner: I'm here representing them (p.) 4 today for the purposes of arguing this motion, Your Honor. The Court: You're here representing them? Mr Turner: Yes, that's correct. The Court: Okay, Mr Turner. Are there any other appearances? Apprently not. Mr. Nel- son. Mr Nelson: Thank you, Your Honor. As a preliminary matter, I should point out to the court-- The Court: By the way, can this matter be disposed of within an hour? Mr Nelson: Certainly my portion of it can, Your Honor. I can't speak for the other counsel. ~~ A108 The Court: Mr Bush. Mr Bush: Certainly, Your Honor. The Court: Mr Turner. Mr Turner: Depends on how much they--time they take, Your Honor, but I would think we can do it within an hour. The Court: I'm going to have to spread it out. Now, how many do we have to hear? Three? Mr Nelson: I believe so, Your Honor. The Court: It will be 20 minutes a piece. Mr Turner: Actually, we have two from one side, Your Honor, and one from the other, so I presume they can split their 30 minutes, and I can have my (p. 5) 30 minutes? The Court: Each of you have 20 minutes. Mr Turner: Okay. The Court: All right. Mr Nelson. Mr Nelson: Thank you, Your Honor. As a preliminary matter, I should point out to the Court that the underlying release and settlement agreement entered into between A109 the trustee and the Soltows, which is before the court for approval today, had a couple of legal descriptions attached to it as Exhibit A and Exhibit B. It's come ee the parties attention that Exhibit A and Ex- hibit B, when they were attached to the agreement, were, in fact, reversed, and the parties understand that and agree that that, in fact, for purposes of accepting the release and settlement agreement, those exhibits will be, in fact, reversed. And I don't think that presents a problem for the court here today. Your Honor, with respect to the motion to approve the settlement under Bankruptcy Rule 9019, I would like to state that both the trustee, in his own right and through cur office as his counsel, has spent a great deal of time and effort investigat- ing the background and the merits of both the claim and the counterclaim that are pending with reference to the (p. 6) A110 adversary proceeding that we're trying to settle here today. That adversary proceed- ing, I think, was commenced originally in the State Court, was--when the Fishells filed for Chapter 11, was removed to this Court and was prosecuted and defended by the various parties during the Chapter 11 phase of this case, which lasted for a little over a year, the case having con- verted to Chapter 7 several months ago. Based on that relatively exhaustive investigation, the trustee has determined that this settlement is in the best interest of the creditors and bases that determination on the fact that there is a significant litigation risk from the estate's perspective in pursuing the adversary proceeding. This--I believe, that the court is relatively aware of the facts of the adversary proceeding litigation, and there are complicated facts, and also fairly complicated legal Alll issues are raised. Your Honor, just reading the various briefs that had been filed during the course of this adversary proceeding con- sumed many hours. As the Court may appre- ciate, those briefs are voluminous. That alone indicates the complexity of the factual and legal issues. Our belief is this Court has denied motions (p.7) for summary judgment brought by the parties, which also indi- cates that there are certainly disputed issues of fact that have to be resolved here. It's difficult to assess, with any degree of precision, the exact litigation risk, because the case is so factually intensive. It ultimately depends on which set of witnesses the tryer of fact ulti- mately believes. However, if the estate were unsuccess- ful in pursuing this litigation, a very large claim by the Soltows would end up All2 being--would result against the estate, and it's quite possible that the bulk of that claim would be administrative in nature, because of the fact that the slander of title counterclaim that the Soltows have brought, many of the time-- much of the time, when that title was allegedly slandered, occurred while the Debtors were official possessors in the Chapter 11. In the risk of additional litigation, the trustee has taken into account the inevitable delay in litiga- tion. Although the adversary proceeding, I believe, is scheduled for trial in August, I think this court has observed on the record in the past in this case that an appeal is virtually certain. In fact, I think there's been one or more appeals in connection with this adver- sary proceeding already. 80 we would be measuring the time frame for resolving this case (p.8) probably in years, rather A113 than months or weeks. The cost of the litigation is another factor that the trustee relies on. This is clearly going to be a hotly contested adversary proceeding, and as I mentioned before, both the legal and factual issues are very complicated and numerous. It will be a very expensive lawsuit to try, win, lose or draw. Another factor that the trustee is taking into account, as he is required to take into account as the standards that have been developed by the courts under the Rule 9019, is the paramount interest of the creditors of the estate. The posture of this case is such, Your Honor, that the claim on file against the estate by the Soltows will be completely eliminated by this settlement. That represents the single largest claim against the estate, Your Honor. The other assets of the estate, outside the adversary proceedings, should All4 be sufficient, once we eliminate the Sol- tous claim, to return a substantial divi- dend to the remainder of the creditors. And not having to go through the time con- suming process and cross-legged process of litigating the adversary proceeding, that substantial dividends should be able to be returned to the creditors relatively promptly, and, Your Honor, for all of those reasons, the trustee asks that the(p.9) settlement be approved. The Court: You only used up five minutes of your time. All right. Mr Bush, can you do as well? Mr Bush: Thank you, Your Honor. For the record, Mark Bush on behalf of Robert and Rosalie Soltow. Mr Soltow's in the court with us today. Bankruptcy Counsel Gary Rogers is also with me today. I'm trial counsel on the adversary proceeding. Your Honor, my perspective on this matter is, having lived with this case longer than A115 anyone else has, since April of 1989 when it was filed, we strongly support the posi- tion taken by the trustee in this matter, both as defendants in the adversary pro- ceeding and, as indicated, the largest creditor. We should point out that the settlement arrangement has an important contingency, and that contingency is that it is subject to approval today by the court. In other words, if the court were not to approve the settlement today, there is no agreement for this settlement to otherwise proceed. One of the reasons for that, Your Honor, is we are faced with an August trial date which is going to require substantial pre- paration, and we need to get a determina- tion from the trustee and the court-- The Court: How many days are set for the(p.10) trial? Mr Bush: Well, I believe, approximately a week, give or take a few days. A116 The Court: One week. Mr Bush: So it's very important that we get a resolution today, if possible. The trustee has studied this matter through counsel ex- tensively, like he has indicated. Counsel has taken copious information from our side of the case and, I presume, from the other side of the case, as well. So it's a very knowledgeable type of decision that the trustee and counsel has made. I'd like to make five principle points in terms of why, from the standpoint of Mr Soltow, and for everybody else for that matter, the settlement is a good idea for the estate, for the creditors and for all concerned. The first was alluded to briefly, and that is additional delay that would be en- gendered by allowing the litigation to pro- ceed. As I've indicated, this case has been around since April of 1989. It has been before three different judges, Judges Eve- All? land, Stevenson, and Your Honor. We've had hearings in four different courtrooms in Charlotte, Hastings, Lansing and Grand Rapids. It was scheduled for trial, the(pll) court may recall, originally last August. We now have a trial date of this August. If, for some reason, the case continued and couldn't be tried at that time, I presume, given the court's retirement, Your Honor's retirement, we would have a fourth judge in this case. This piece of property has been tied up now for over three years, and no one has been able to do anything useful with it. This case has had more adjournments than any case I've ever handled. It seems like anytime we get to a depositive point in the case, someone wants an adjournment. We believe that if the case were conti- nued, these delays would go on. There cer- tainly would be an appeal. There have al- ready been appeals all the way through the A118 Michigan State decision, on a decision made by Judge Eveland. There's been an appeal on the Federal System on a Court's decision that a jury trial may, as been requested by the debtor, would not be improper, and we just think that that pattern would continue for years and years and years, based upon the attitude of the parties and the attorneys who have handled it. We don't think that's in any- one‘s best interest to string this case out to 1993, 1994, 1995. We believe that the delay, alone, which would prevent the administration of the estate, is reason enough for the Court to approve (p. 12) the settlement, apart from everything else that's been mentioned. Reason number two, Your Honor, the estate. The expense in litigating this case for everyone has been overwhelming. No doubt they would continue. The largest single expense would be the trial, and preparation for the A119 trial, by both sides, and the appeal. That could run into six figures for the estate, for everyone else. We think that given the circumstances presented, the expense, alone, for the litigation to continue, and the burden that that would place upon the credi- tors in the estate is sufficient reason alone for the court to approve this parti- cular settlement. The third reason, Your Honor, is the ex- posure which the case presents to the court--I‘'m sorry, to the estate and to the creditors. In State court, we filed, at the time that the lis pendens was filed in the property, a counterclaim for slander of title. The court, using the court's own language from an earlier hearing in this case, has recognized, and I quote the Court, “And this is the matter that has been mentioned by counsel for Mr Soltow that has been holding up any disposition of any property and is probably causing A120 very much damages to Mr Soltow and--(pl3) if he prevails eventually, and will mean a lot of expenses and a large claim to be decided in this case." That's from the hearing of January 31 of this year, which is absolutely true. Should Mr Soltow pre- vail in the adversary proceeding, he in- tends to vigorously and fully prosecute that slander of title claim. This piece of property has been dormant, as I've indicated, for over three years. It will remain dormant until the case is tried, if it needs to be tried. He's lost any opportunity to develop it for three years. He's lost any opportunity to use it himself. No one will touch this piece of property as long as this adversary pro- ceeding continues. His legal expenses have been enormous, and we can guarantee the court that that slander of title counter- claim would not only be in the six-figure range, probably would be over a half-of-a- Al21 million dollars worth of exposure to the estate. We don't think it's necesssary that the estate bears that risk and that exposure if the case can be resolved in terms that the trustee and we believe to be reasonable and favorable, and that's what we're presenting to the court today. The fourth reason, Your Honor, is that the settlement which has been proposed requires a cash payment by Mr Soltow to the estate in the amount of (p.14) $2,000. Now, in a case of this magnitude, that may not strike the court as enormous. However, Mr Soltow feels very strongly that given the lack of merit in the pri- mary case presented against him, that, in fact, constitutes quite a fair amount of consideration for a claim that we believe is as specious as it is. We believe tiat that amount of consideration, alone, would warrant the trustee recommending approval to the court. Al22 Definitely, Your Honor, it's important for all of us to remember that even if the Fishells were somehow to prevail in the adversary proceeding, which we think is fairly unlikely, this would mean that Mr Soltow would still have to have a mortgage on this piece of property. There has been some dispute and debate in terms of how much that mortgage would be, and it would depend on how the interest is calculated. The mortgage specifically reserves attor- neys fees and collection costs. We believe that if the Fishells were to prevail in this matter, the amount of the mortgage would be over $1 million. We think it's highly questionable whether the value of that property in today's depressed real estate market would exceed that, it at all, and possibly would not exceed that number. We think that this is a very important factor to take into account. In other words, (p 15) the case could be fully A123 litigated, and there would still be no benefit to the Fishells. Finally, Your Honor, we do have a ques- tion of standing, and I've pointed this out in my brief in support of the motion. The case law has indicated it's highly questonable whether, in circumstances such as this, the debtors even have standing to question the wisdom of the trustee, who has exclusive control and authority over the course of the adversary proceeding, and standing to object to a motion of this type. The case law is not totally clear, but it scene to depend upon whether the debtor is insolvent. So, we think, for all the foregoing reasons, the settlement is very appropriate, and should be approved today. To the extent the other side would even have standing, that being the debtors, to object, there's been no formal objection filed. There has been an objection filed to Mr Soltow's A124 claim, which has been noticed on for a week or two from now. We think that the court's ruling today will moot that objec- tion, and we can get this case wrapped up and get this estate administered properly. Thank you very much, Your Honor. The Court: Okay. Mr Turner. Hr Turner: Your Honor, on behalf of the (p16) Fishells, I might want to point out to the court that Mr Fishell is not here today because he had unscheduled surgery on Tues- day, and I guess to show the proper atti- tude of counsel on the other side, we've requested to adjourn this until Mr Fishell is out of the hospital, and that was refused. And the reason given for the refusal was there was a drop dead date on the settlement as of today. I can appre- ciate Mr Soltow's attorneys wanting a drop dead date as of today, because the court has set the objection of their claim for July 22nd, and I would assume they want to A125 try to avoid that project, not because of the time, but because of the likely result. I think that it appears from both pre- vious counsel that the real guts to this thing as to why they want this settlement approved is because of this horrendously large claim that they're going to have in their counterclaim for slander of title. It's interesting that neither counsel have cited any case authority to support this great recommendation as made to the court on settling this alleged counterclaim. I think if the trustee in bankruptcy was concerned with this counterclaim, he should have brought a motion for summary disposition, and maybe he would have been relieved of any fears that he had (p 17) concerning the counterclaim. I think that two things are evident. One is that the law, generally, in the United States is that filing a lis pen- dens privilege so you can't slander the A126 title. Michigan has not looked at that issue in that light at this time. Michigan does have some case, though, that are very interesting on that issue. One of them is Kauffman v Shefman, which is 169 Mich Appeal 829, which is a 1988 case, where there was a malicious prosecution claimed because a lis pendens was filed. The court held that an action could not be maintained for mali- cious prosecution by the filing of a lis pendens, and the court went on to say, "Notice of lis pendens serves an important public purpose by protecting the right to litigation involving real property and pro- tecting prospective purchasers by apprising them of disputes regarding rights in the land. These policies should not be thwarted while allowing the filing of a notice of lis pendens by an ultimately unsuccessful liti- gant to constitute grounds for a malicious prosecution action. Such a result would be contrary to the policy announced by our A127 Supreme Court in Friedman: to refrain from intimidating those seeking to adjudicate their claims in the courts. Accordingly, we hold that the filing of a (p. 18) notice of lis pendens in this case is not equivalent to a seizure of property for purposes of a malicious prosection claim." And it's not like filing a claim. And the only case that I could see that counsel may glean some hope from is the Sullvan case, which is an 88 Michigan Appeal case 77, where they said that the-- that filing the claim could be grounds for slander of title. The filing of a claim, not notice of lis pendens. Notice of lis pendens is going to be privileged filing of a claim. But even in a filing of a claim situation, it's incumbent upon the person claiming slander of title to show malici- ousness and intent, and the court requires a true showing of maliciousness, not just the filing of--the filing of an improper A128 document is not maliciousness, and it's-- I think this court has sat through enough hearings on this case. We had a very substantial motion for summary disposition, as did defendants, and this court was not able to grant motions for summary dispositions on either side. I : think in coming to that conclusion, the court has to recognize that Mr Fishell's claim against Mr Soltow is a legitimate claim, and if Mr Fishell's claim against Mr Soltow is a legitimate claim, whether he's successful or not, (p 19) that viti- ates any possible claim that his lis pen- dens was filed maliciously, or with the intention of due harm to Mr Soltow, rather than the purpose of lis pendens, to put everybody on notice that he is claiming and interest in this property. So I think that if the court--and we have a memorandum that we'll submit to the court today on just that issue, not A129 the issue of the counterclaim, because the counterclaim we've always looked at as hot air. There's no question under Michigan law that you're allowed to file a lis pendens, and Mr Fishell properly filed a lis pendens, and the counterclaim is an intimidation or scare tactic. We never filed a motion. At least I didn't. There was a motion filed for summary judg- ment counterclaim in Circuit Court before I was in it. We didn't pursue it. In all honesty, we didn't care if they tried to bring that up in a trial. Particularly, if this court remembers, we've claimed all along, until you and Judge Gibson wrote to the contrary, that we were entitled to a jury trial, and we would have-- The Court: We didn't hold that, the State Supreme Court did--not the Supreme Court. The Sixth Circuit Court of Appeals did. Mr Turner: Not in my case. In my case you (p. 20) and Judge Gibson did, but once A130 it was ruled that we were not entitled to a jury trial, up to that point, we were anxious to see counsel and Mr Soltow try to manufacture or try to persuade a jury that there was a slander of title issue in the matter. We think that we have made their credi- bility on the main suit even less likely, and let's get to the main suit, because I think the court ought to look at that for just a moment, too. Counsel talks about--counsel for the trustee talks about these evaluations that they have made concerning their recommen- dation to this court. And my recollection is the first one that he pointed out was that there are very voluminous factual and legal issues that will be hotly contested. That may be the case, but I think that there are some very significant issues, factual and legal, that this court has to recognize are definitely in Mr Fishell's favor, some A131 that are not testimony, some that are just documents that we have offered in support-- that we had offered in support of our motion for summary disposition. There is no dispute that the dollars owed to Mr Soltow originally started out as a mortgage, no question about that. 80 I think that gives rise to the (p. 21) legal theory that we have about equitable mortgage, once there was a deed that taken out of escrow and filed. There is no doubt about the fact that Mr Soltow has exhibited an interest in owning this property and not just getting his money back. He's so testified in his depo- sition that he decided that once Mr Fishell signed the documents on August the 25th, 1988 that gave rise to the pre- sent litigation. There is no question that Mr Soltow, within six days after he loaned Mr Fishell the last $55,000 to complete making his property marketable A132 commenced the wheels to demand payment from Mr Fishell in all the millions that he had signed to Mr Soltow. There is no question that that very note, that Mr Soltow was usurious. That's why counsel-- The Court: Mr Soltow did what? Mr Turner: Every promissory note that Mr Fishell signed of indebtedness to Mr Soltow had usurious interest rates, and we've given the court all the documenta- tion on that. They haven't--there's no documents-- they haven't denied it was usurious, and I think that's why counsel hedges when he says that one of the-- one of the things involved in this is what value, or the amount of money that Mr Fishell would (p 22) eventually owe to Mr Soltow if Mr Soltow would be suc- cessful in this adversary proceeding, and he has a hard time putting a handle on it. I can understand because there's been about $450,000 in principal, and, A133 of course, it's our position that there is no interest, because it was all usurious, and if you take away the usurious interest--and I don't be- lieve that there's any way that counsel is going to be able to col- lect any attorney's fees on a case that the court determines was equi- table mortgage, or was brought about by fraud. So Mr Fishell looks at owing Mr Soltow $450,000, not a mil- lion dollars. The record shows that when this liti- gation was commenced, the property was worth a million three, and Mr Soltow had some exhibit that we got in a depo- sition that shows he put the value at a million five, and so we're probably talking about property that's worth, at least, a million five, and there's indebtedness of about 8450, 000. I can understand why Mr Soltow would like to A134 buy it for only another $2,000. And don't let counsel for Mr Soltow kid you. Mr Soltow desperately wants this property. I think the depositions we've taken shows that he wants this property. I think his conduct before this court (P 23) shows that he des- parately wants this property. If this court recalls, there was the Andre pro- perty which is adjacent to this property, and Mr Soltow was attempting to buy both of them from Mr Fishell, and Mr Fishel] wouldn't do it, so counsel and Mr Sol- tow came up with the documents that led to this litigation. When Mr Fishell filed Chapter 11, this court removed its injunctive order on the Andre property, and it went through fore- closure. Now, who bought it at foreclosure? Mr Soltow. When Mr Fishell sold his right of redemp- tion to a third party, and they redeemed A135 the property timely, who came to this court to try to have this transaction set aside? Mr Soltow. | Mr Soltow knows, as Mr Fishell, the values of both these properties. Mr Sol- tow would like to get this property that's involved in this litigation for the $450,000 that he's paid, plus another $2,000. I think $2,000 to settle this case is ludicrous. I think that all that he's doing is this property at a bargain sale. I think that there is no exposure to the estate and to the creditors, because the counterclaim is useless. I think if the court waited until it resolves that issue on the objection of the (p 24) counterclaim, that will be very abundant to the court. I think that the court has--I'll get back to Mr Nelson's list. Litigation risk was the first one. What the court has seen A136 the motions for summary judgment, the court couldn't grant any. Obviously, I feel that the defense has no merit. We've been pur- suing this litigation for almost three years now. Mr Fishell spent a lot of time and effort, as have I, and I don't think we would do it unless we thought that they were-- We expected to get at least partial summary judgments granted on our motion for summary judgment on usury or, at least, on fraud or innocent misrepresentation. And I think the court ought to recall, when its going through this mental analy- sis, that there's very strong evidence of misconduct and misrepresentation by the Fraser firm and their dealings with Mr Soltow and Mr Fishell in this matter. And, of course, the court knows that there is presently a malpractice case pending by Mr Fishell against the Fraser firm, and the trustee has not decided how it's A137 going to proceed with that particular asset of the estate. But litigation risk, there is always risk in litigation. I guess, I don't think there's, what I (p 25) call, any substan- tial risk or real risk in the counterclaim by the Soltows. I don't think any large claims could possibly result against the estate, because of this counterclaim. I don't know what inevitable delay is. If that--if Mr Bush is telling us that if we're successful in the trial in August, we're going to appeal it, I don't think that’s any justification for giving away the claim. Cost of litigation. This is, this is almost humerous, if it wasn't so serious. When the trustee was considering pursuing this lawsuit, I advised him that I thought that Mr Fishell had really taken the abuse from the Fraser firm and Mr Soltow, and that I had worked without receiving pay- A138 ment for my time up to that point, other than just keeping track of it, an I would continue to do so through the trial of this issue, if that was going to be a concern to the trustee, that he had to pay attor- ney fees to pursue this claim, because I felt very strongly about the claim. Evidently, that trustee has decided that he's got a greater cost risk, because he's decided he'd rather get something than represent Mr Fishell. In the past, I think, that along that line, Mr Bush made (p 26) the comment that the trustee had copious meetings with Mr Soltow in coming to this settlement, in reaching this--a conclusion, and assumed the trustee had done the same with PFishell. I want the court to understand that isn't true. We had one meeting with Mr--I'm sorry, with the trustee, not the attorney, with the trustee, who--one time, right after he became the trustee. We gave him copies A139 of the brief and appendix that we filed in our motion for summary disposition. We soli- cited additonal meetings, we were refused. We particularly solicited additional meet- ings when we knew that they were meeting with Soltow and his attorney. We were re- fused. I don't know what copious work has been done to evaluate this from Mr Fishell's side, other than reading our brief in sup- port of our motion for summary disposition and our exhibits, which are attached to it. I think it's really unfortunate that Mr Fishell sought the protection of the bank- ruptcy court, as counsel for the trustee pointed out, to see if we can wipe out the Soltow claim. There's sufficient money to give substantial payments to al] the creditors. I don't doubt that when Mr Fishell filed (p 27) for protection in this court, it was the cash flow situation that was the real problem, and the fact that the Andre A140 property was going to be sold at foreclo- sure, and the only business assets that Mr Fishell, that he was using in the busi- ness fashion, were the Soltow property litigation and the Andre property litiga- tion. He had a home and a farm free and | clear of this, probably worth a couple hundred thousand dollars, and he had a condo in Florida that was probably worth a couple hundred thousand. Immediately upon being in Chapter 11, this court came to the conclusion that there was no equity in the Andre property and released that to proceed to foreclo- sure, so Mr Fishell was out of luck as far as that property was concerned in getting any plan organized to develop that property and make any money off that property. Then the trustee, the federal trustee, moved to have this, with the assistance of Mr Soltow and his attorneys, moved to have this matter converted to a 9141 Chapter 7. To avoid that, Mr Fishell tried to get this court to let him keep it in Chapter 11, either borrow or sell the property in Florida, to do something with the Andre property. The court dec- lined that request to borrow money, because the court had determined that there was no equity in the Andre (p 28) property. The next thing that occurs to Mr Fishell is that he, because the court won't let him borrow against that money, he sells that right of redemption for $1.00. The next thing this trustee, the new trustee, then does for him is he files a complaint before this court denying him a discharge in bankruptcy, because he has sold this valuable, according to this court valueless, right of redemption for a dollar. So everything that has come up since Mr Fishell has filed for protection of this bankruptcy court has buried him a little Al42 deeper. If they do this, if they get rid of this asset that's worth a million-and- a-half for indebtedness of $450,000, that just buries him a little deeper, I suppose, and it's really frustrating to come to get protection under bankruptcy court and end up having the trustee in bankruptcy sel] the property in Florida to pay off credi- tors and to settle the Soltow litigation, which is the biggest asset that Mr Fishel] had, settle that for $2,000. And I don't know what he's going to do with the malpractice claim against the Fraser firm, and I don't know what he's going to do considering the farm, but it's no wonder that they can repreent to this(p29) court if they dispose of this groundless counterclaim for $2,000, they can make sub- stantial payments to other creditors. I would think so. Mr Fishell, when he filed this petition in bankruptcy, other than ridiculous claim by Mr Soltow that he pro- A143 bably owed less than $200,000 in indebted- ness and had $400,000, so it does not sur- prise me they can do that. It does surprise me that they yr" represent to this court that the counter- claim by Mr Soltow has any merit at all, and they have any fear of any large claim against the estate based upon the counter- claim. And we would respectfully request that the court, to not approve this settlement, particularly at this time. Let it get on for hearing on the objection to Mr Sol- tow’'s claim. Let that be disposed of. Let us go to trial in August and conclude the Soltow matter, probably without any coun- terclaim, and maybe that gets some of the protection that Mr Fishell came to this court to receive in the first place. And I would file with this court our memorandum in opposition to the trustee's motion to settle the Soltow adversary pro- Al44 ceeding, and that memorandum just goes to the issue of the counterclaim, Your Honor. (p 30) The court is well aware of the claims and the factual situations and the legal issues involved in the initial adversary suit by Mr Fishell against the Soltows. The Court: You understand, Mr Turner, that I have not had an opportunity to read this. I have read every one of the other briefs that have been filed timely, but I can't read a brief--how many pages is this, at the time of the trial with all the other cases we have, with all the other people that are in this courtroom that have matters to be heard. There's no way -that I can read this brief and hold them up. Mr Turner: That's why I tried to argue what's in the brief, Your Honor, but, in addition to that, you had an advantage that I haven't had, because I haven't seen any brief that was filed in this 4145 thing, but I have seen a motion. The Court: Well, I surprised when you were here. I understood that the Fishells were being represented by their son. Mr Turner: Well, as this court is aware, I've been the attorney-- The court: He did file a brief, and I did read that brief. Mr Turner: As the court is aware, Ive (p 31) been the attorney ff record for the Fishells in the adversary proceeding since day one in this-- in the bankruptcy court, and I would assume that if a brief was filed, either by Mr Nelson or by Mr Bush, that a copy of it would have been sent either to Mr Fishell, Richard Fishel! or Dorothy Fishell, and/or to Roger Fishell, and I have seen no brief. I've seen a motion. I wondered if they didn't have to file a motion to--brief to support their motion, and I wondered if they would have to take testimony so that we could cross-examine A146 them as to how they arrived at the conclu- sion they presented to this court. The court: Okay. Your time is up now. Mr Nelson, any rebuttal--or I iat oak. do you desire to present any evidence? Mr Nelson: No, we don't desire to present any evidence. I believe that the case law in Rule 9019 indicates that the court can take judicial notice of the matters that are in the court's file, which are volumi- nous enough, without taking any more of the court's time by presenting evidence which would merely attempt to summarize all that. The Court: Okay. Mr Bush, did you want to take--put on any evidence? Mr Bush: No, Your Honor. (p 32) The Court: Okay. Go ahead, then, Mr Nelson. Mr Nelson: I'm not going to get into any detailed debate or analysis as to the merits of this case. Mr Turner suggests that the counterclaim is clearly without A147 merit, and that his--the plaintiff's case in chief appears to be pretty much a sure thing. If that were the case, if we weren if our office were to agree with that, per- haps we wouldn't be here today bringing this motion. Suffi [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_2029%3A2. Public record. Not legal advice.