In re Raejean S. Bonham dba World Plus
Bankruptcy No. F95-00897
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The Trustee seeks blanket settlement authority for the cases that have not yet been resolved. His application follows.
Cabot Christianson, Esq.
BUNDY & CHRISTIANSON
911 W. 8th Avenue, Suite 302
Anchorage, AK 99501
Attorneys for Trustee
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF ALASKA
|In re RAEJEAN BONHAM, aka Jean Bonham, aka Jeannie Bonham, dba World Plus; WORLD PLUS, INC., an Alaska corporation; and ATLANTIC PACIFIC FUNDING CORP., a Nevada corporation,
|Case No. F95-00897-HAR
TRUSTEES APPLICATION FOR
BLANKET DISCRETIONARY SETTLEMENT AUTHORITY
Larry D. Compton, Trustee, through undersigned counsel, applies to this court for blanket authority to settle the Bonham Recovery Actions at his discretion, on such terms and conditions as in his judgment are in the best interests of the estate.
The Bonham Recovery Actions are approximately 600 adversary actions filed in this court against debtors Ponzi scheme investors. Many of those cases were removed to federal district court. All of the cases that remained in bankruptcy court have either settled or been taken to final judgment. Approximately 75 cases remain pending in federal district court, although many of them are in various stages of settlement discussions.
Shortly after the trustee filed his first batch of Bonham Recovery Actions, it became clear to the trustee that he needed blanket settlement authority to settle those cases, as opposed to filing a motion to approve each and every individual settlement. Accordingly, in docket #659, filed November 20, 1996, this court entered an order which authorized the trustee to settle for the total of preference payments, plus interest received within a year of the petition. The order provided that this formula was a floor for settlement authority, not a directive that a case be settled on any particular terms. Docket #659 also called for the trustee to give notice, by 5-day fax, of each settlement, to any attorney who was counsel of record in at least ten different adversary cases. A copy of docket #659 is attached hereto.
In practice, the trustees approach to settlement in a typical case has resulted in a settlement far above the minimum levels set forth in docket #659. However, in a number of cases, either that are still pending or have had final judgments entered, the financial situation of the defendants requires that the settlement amount be lower than those minimums. One approach, to the issue of trustee authority to settle such cases for amounts lower than called for in docket #659, is for the trustee to file individual motions. However, such motions by necessity lack much useful information, since the only information that is truly germane to the settlement is the settling defendants financial condition, and the trustee is treating such information as confidential. Accordingly, the trustees application to this court doesnt say much beyond the fact that the trustee and defendant X have agreed to settle for $Y, and the trustee has agreed to $Y only because of the Xs financial condition.
In the instant application, the trustee seeks authority to settle with the remaining defendant Xs for whatever amount the trustee believes, in the exercise of his discretion, is in the best interests of the estate. Since a case-by-case motion does not include any sufficient information to meaningfully second-guess the trustee, there will not be any prejudice if the trustee is simply entrusted to utilize his own best judgment.
Attached hereto is a form of order approving this motion.
Dated this 29th day of January , 2001.
|BUNDY & CHRISTIANSON
Attorneys for Trustee
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