Doc962 freeman group motion compromise & settlement_ a walk-away
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Doc962 freeman group motion compromise & settlement_ a walk-away Document Transcript

  • 1. Case 09-33918-hdh11 Doc 962 Filed 07/24/12 Entered 07/24/12 11:11:30 Desc Main Document Page 1 of 6Peter Franklin Jeffrey M. Tillotson, P.C.State Bar No. 07378000 State Bar No. 20039200Doug Skierski Eric W. Pinker, P.C.State Bar No. 24008046 State Bar No. 16016550FRANKLIN SKIERSKI LOVALL HAYWARD, LLP John Volney10501 N. Central Expressway, Suite 106 State Bar No. 24003118Dallas, Texas 75231 Nicholas J. ChapleauTelephone: (972) 755-7100 State Bar No. 24069494Facsimile: (972) 755-7110 LYNN TILLOTSON PINKER & COX, L.L.P.Counsel for Matthew D. Orwig, 2100 Ross Avenue, Suite 2700Chapter 11 Trustee and Liquidating Trustee Dallas, Texas 75201 Telephone: (214) 981-3800 Facsimile: (214) 981-3839 Counsel for Matthew D. Orwig, Chapter 11 Trustee and Liquidating Trustee IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISIONIn re: § §FIRSTPLUS FINANCIAL GROUP, INC., § Case No. 09-33918-hdh-11 Debtor, § Chapter 11 §______________________________________________________________________________ MOTION FOR ORDER APPROVING COMPROMISE AND SETTLEMENT AGREEMENT BETWEEN THE TRUSTEE AND THE FREEMAN PARTIES______________________________________________________________________________ NO HEARING WILL BE CONDUCTED ON THIS MOTION UNLESS A WRITTEN RESPONSE IS FILED WITH THE CLERK OF THE UNITED STATES BANKRUPTCY COURT AT 1100 COMMERCE, ROOM 1254, DALLAS, TEXAS 75242-1496, BEFORE THE CLOSE OF BUSINESS ON AUGUST 20, 2012, WHICH IS MORE THAN TWENTY-FOUR (24) DAYS FROM THE DATE OF THIS MOTION’S SERVICE. ANY RESPONSE MUST BE IN WRITING AND FILED WITH THE CLERK, AND A COPY MUST BE SERVED UPON COUNSEL FOR THE TRUSTEE PRIOR TO THE CLOSE OF BUSINESS ON AUGUST 20, 2012. IF A RESPONSE IS FILED, A HEARING WILL BE HELD WITH NOTICE ONLY TO THE OBJECTING PARTY. IF NO HEARING ON THIS MOTION IS TIMELY REQUESTED, THE RELIEF REQUESTED SHALL BE DEEMED TO BE UNOPPOSED, AND THE COURT MAY ENTER AN ORDER GRANTING THE RELIEF SOUGHT OR PERMITTING THE NOTICED ACTION TO BE TAKEN._____________________________________________________________________________________________MOTION FOR ORDER APPROVING COMPROMISE AND SETTLEMENT AGREEMENTBETWEEN THE TRUSTEE AND THE FREEMAN PARTIES PAGE 1 OF 6#4824-3643-6751
  • 2. Case 09-33918-hdh11 Doc 962 Filed 07/24/12 Entered 07/24/12 11:11:30 Desc Main Document Page 2 of 6TO THE HONORABLE HARLIN D. HALE,UNITED STATES BANKRUPTCY JUDGE: COMES NOW Matthew D. Orwig, the duly-appointed Chapter 11 Trustee andLiquidating Trustee of the FirstPlus Financial Group, Inc. bankruptcy estate (the “Trustee”)seeking this Court’s approval for the settlement and compromise of controversies betweenMatthew D. Orwig, the duly-appointed Chapter 11 Trustee (the “Trustee”) of both the FirstPlusFinancial Group, Inc. (the “Debtor”) bankruptcy estate (the “Estate”) and of the FPFGLiquidating Trust (the “Trust”) (collectively, the “Trustee Parties”), and (i) Robert Freeman(“RF”), (ii) David Ward (“DW”), James Roundtree (“JR”), and John Fitzgerald (“JF”)(collectively, the “Freeman Parties”). The Trustee would show the Court the following: JURISDICTION AND VENUE 1. This Court has jurisdiction over the subject matter of this Motion pursuant to 28U.S.C. §1334(b) and the standing order of reference of the District Court. This matter is a coreproceeding. 28 U.S.C. §157(b)(1), (b)(2)(O). 2. Venue in this Court is proper under 28 U.S.C. §1408 and 1409. BACKGROUND FACTS 3. The Debtor filed for relief under Chapter 11 of the United States BankruptcyCode on June 23, 2009. The Trustee was appointed on July 24, 2009. 4. No creditors’ committee was appointed in this case by the United States Trustee. 5. RF filed proof of claim number 7 against the Estate in the amount of$92,500.00 (the “RF Claim”) in which RF asserted that he was owed that amount for unpaidcompensation and indemnification._____________________________________________________________________________________________MOTION FOR ORDER APPROVING COMPROMISE AND SETTLEMENT AGREEMENTBETWEEN THE TRUSTEE AND THE FREEMAN PARTIES PAGE 2 OF 6#4824-3643-6751
  • 3. Case 09-33918-hdh11 Doc 962 Filed 07/24/12 Entered 07/24/12 11:11:30 Desc Main Document Page 3 of 6 6. DW filed proof of claim number 5 against the Estate in the amount of$92,500.00 (the “DW Claim”) in which DW asserted that he was owed that amount forunpaid compensation and indemnification. 7. On June 21, 2011, the Trustee filed a complaint (the “Trustee’s Complaint”)asserting, inter alia, certain causes of action against the Freeman Parties and objecting to theRF Claim and the DW Claim in the adversary proceeding styled Matthew D. Orwig, asChapter 11 Trustee of Firstplus Financial Group, Inc. vs. Freeman, et al., Adversary No.11-3397 (the “Adversary Proceeding”). 8. On February 6, 2012, the Court entered its Order Confirming Trustee’sAmended Plan of Liquidation for the Debtor in the Bankruptcy Case [Docket No. 770],which formed the Liquidating Trust and appointed the Trustee as the Trustee for theLiquidating Trust. 9. On March 22, 2012, the Court entered an order in the Adversary Proceedinggranting the motion to dismiss filed by the Freeman Parties and dismissing the Trustee’sComplaint as to the Freeman Parties (the “Dismissal Order”). 10. On April 23, 2012, the Trustee filed an amended complaint in the AdversaryProceeding in which he again objected to RF Claim and the DW Claim. The FreemanParties contend that the Trustee’s objections to the RF Claim and the DW Claim are barredby the Dismissal Order and the doctrine of res judicata.  11. The Trustee and the Freeman Parties have agreed upon terms for settlement of theClaim and the Adversary Proceeding. A copy of the Compromise and Settlement Agreement(the “Agreement”) is attached to this motion as Exhibit A, and is incorporated herein byreference. The Agreement is a walk-away providing that RF and GW will withdraw their_____________________________________________________________________________________________MOTION FOR ORDER APPROVING COMPROMISE AND SETTLEMENT AGREEMENTBETWEEN THE TRUSTEE AND THE FREEMAN PARTIES PAGE 3 OF 6#4824-3643-6751
  • 4. Case 09-33918-hdh11 Doc 962 Filed 07/24/12 Entered 07/24/12 11:11:30 Desc Main Document Page 4 of 6respective proofs of claim with prejudice and that the Trustee will dismiss each of the FreemanParties from the Adversary Proceeding. The Agreement provides for a full release of any and allpre- and post-petition claims and causes of action between the Parties. 12. Because the controversies between the Parties involve issues that would likelytake substantial time and money to resolve, the Trustee has concluded that the interests of theestate and creditors are best served by entering into the attached Agreement. The Trusteerequests approval to enter into the Agreement as follows. BASIS FOR RELIEF REQUESTED 13. In deciding whether to approve a proposed settlement agreement or compromiseof controversy, a bankruptcy court should consider the following factors: a. the probability of success on the merits and the resolution of the dispute; b. the complexity of the litigation being settled; c. the expense, inconvenience and delay associated with litigating the dispute; and d. the paramount interests of creditors. Texas Extrusion Corp. v. Lockheed Corp. (In re Texas Extrusion Corp.), 844 F.2d 1142,1158-59 (5th Cir. 1988), cert denied, 105 S. Ct. 31 (1989); United States v. Aweco, Inc. (In reAweco, Inc.), 752 F.2d 293, 298 (5th Cir. 1984), cert. denied, 469 U.S. 880 (1984). 14. While it is necessary for the proponent of a compromise to set forth the factualand legal basis for the compromise so the court can make an intelligent and informed evaluationof the proposed settlement, it is not incumbent upon the proponent to present a mini-trial or a fullevidentiary hearing. Texas Extrusion, 844 F.2d at 1158-59; Aweco, 725 F.2d at 298. 15. The Agreement is in the best interests of the Debtor’s bankruptcy estate and itscreditors and should be approved. The Settlement provides for RF and GW to withdraw their_____________________________________________________________________________________________MOTION FOR ORDER APPROVING COMPROMISE AND SETTLEMENT AGREEMENTBETWEEN THE TRUSTEE AND THE FREEMAN PARTIES PAGE 4 OF 6#4824-3643-6751
  • 5. Case 09-33918-hdh11 Doc 962 Filed 07/24/12 Entered 07/24/12 11:11:30 Desc Main Document Page 5 of 6respective proofs of claim for $185,000.00 with prejudice while the Trustee withdraws hisobjections to said claims. While the Trustee believes that he has good objections to their claims,the Freeman Parties contend that they have strong factual and legal defenses to the Trustee’sobjections, based in part upon the Court’s previous dismissal order. Given the cost ofprosecuting the Trustee’s objections, the Trustee believes that the Freeman Parties’ agreement towithdraw their claims with prejudice in exchange for the Trustee doing the same is in the bestinterests of the estate. Accordingly, the Trustee requests that the Court grant this motion andauthorize the Trustee and the Freeman Parties to enter into the Agreement. WHEREFORE, the Trustee respectfully requests that this Court (i) find that service onthe attached service list is proper, (ii) find that the Agreement incorporated as Exhibit A is in thebest interest of the Debtor’s estate, and (iii) approve of the Agreement between the Trustee andthe Freeman Parties.Dated: July 24, 2012. Respectfully submitted, /s/ Doug Skierski Peter Franklin State Bar No. 07378000 Doug Skierski State Bar No. 24008046 FRANKLIN SKIERSKI LOVALL HAYWARD, LLP 10501 N. Central Expressway, Suite 106 Dallas, Texas 75231 Telephone: (972) 755-7100 Facsimile: (972) 755-7110 and Jeffrey M. Tillotson, P.C. State Bar No. 20039200 Eric W. Pinker, P.C._____________________________________________________________________________________________MOTION FOR ORDER APPROVING COMPROMISE AND SETTLEMENT AGREEMENTBETWEEN THE TRUSTEE AND THE FREEMAN PARTIES PAGE 5 OF 6#4824-3643-6751
  • 6. Case 09-33918-hdh11 Doc 962 Filed 07/24/12 Entered 07/24/12 11:11:30 Desc Main Document Page 6 of 6 State Bar No. 16016550 John Volney State Bar No. 24003118 Nicholas J. Chapleau State Bar No. 24069494 LYNN TILLOTSON PINKER & COX, L.L.P. 2100 Ross Avenue, Suite 2700 Dallas, Texas 75201 Telephone: (214) 981-3800 Facsimile: (214) 981-3839 COUNSEL FOR MATTHEW D. ORWIG, CHAPTER 11 TRUSTEE AND LIQUIDATING TRUSTEE CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document was sent via ECFand/or first class mail on this 24th day of July, 2012, to the persons on the attached service list. /s/ Doug Skierski Doug Skierski_____________________________________________________________________________________________MOTION FOR ORDER APPROVING COMPROMISE AND SETTLEMENT AGREEMENTBETWEEN THE TRUSTEE AND THE FREEMAN PARTIES PAGE 6 OF 6#4824-3643-6751