GENERAL54304

• Permit No: M1977376
• IBM Index Class Name: General Documents
• Doc Name: JOINT MOTION 06/04/97 FOR ORDER APPROVING SETTLEMENT AGREEMENT & MUTUAL RELEASE WITH RESPECT TO ADVE
• Media Type: D
• Archive: No

r
effect and the pa rc iee will 11[igate their rams ining claims in
the Advereery Proceeding;
d. Upon Bankruptcy Court approval of the
Settlement Agreement and the relea ee of all Eunde in Che escrow
account, the pa rt iee shall file an Acknowledgment Of Setiefactlon
OE Judgment Sn the Advereery Proceeding, shall dismiss all
pending li[ige[lon and the mutual releases contained Sn the
Settlement Agreement shall be of full force and effect. Included
in the mutual raise see will be [he release by Equitable and CCLIC
of the claim against CF61 Steel Corporation's estate Lor unpaid
life insurance pcamiume in the approximate amount of 5791,000;
e. Bankruptcy Court approval le to be Sn the form
of an order aubetent lolly in the Corm attached se Exhibit a to
the Settlement Agreement attached hereto ae Exhibit 1. Paragraph
5 of the proposed Order provides:
5. The retlreee, on whose behalf the
adversary proceeding was commenced by
Reorganl zed CF6I and that ere [he eubj act of
the Settlement Agreement Md Mutual Releeee,
are hereby bound by Chia Order end [he
Settlement Agreement Md Mu[uel Releeee end
ere therefore precluded from bring! ng any
action Sn the Bankruptcy Court concerning the
recovery of the Reserves (ae defined in [he
Settlement Agreement Md Mutual Releeee) from
The Equitable Life Assurance Soc Sety Of The
United States.
Points Md Authorities
In Amezl can Emoloveze' Ina Co. v. K!na Reeourcee Co .
556 F.2d 471, 475 (10th Cir. 1977), the Tenth (:l rcuit Court of
Appeals approved a ten factor teat enumeret ed by the trial court
1n connection with the eettlement of litigation under the
Bankruptcy Act.' In Relea v. Haamann, aBl F.2d 890, 593 (loth
Cir. 1989), a caee under the Bankruptcy Code, r.he Tenth Circuit
acknowledged the ten factor teat of the Kina Reeourcee Co. caee
ee controlling in connection with the approval of a eettlement
and compromise under the Bankruptcy Code; however, the Tenth
Circuit in flelee v. Haamann Eocueed pa rt SCUlarly on the issues of
'Because the caee was a very large, complex caee involving a
sett lemon[ [hat was put together over a period Sn excess of two
years end involved come forty (90) distinct representative groups
or parties holding sharp, entegonlet is and conflicting into rests,
eevere2 of the ten (10) factors enumerated are not applicable to
many eettlemente, Including the eettlement Sn [hie caee.
the likelihood of success and the expected expense and delay
caused by litigation. Ocher of the ten factors enunciated Ln the
Klno Reeourcee Co caee that would arguably apply to the
eettlement among Reorganized CF6I, Equitable, CCLIC end the USWA
include the number of part iee [het object to the eettlement, the
competency end experience of counsel who support the eettlement
and the extent to which the eettlement ie truly thQ product of
arms-length bargaining. A bankruptcy court's approval of a
compromise may be disturbed only when it achieves nn unjust
result amounting to a clear abuse of discretion, provided,
however, the bankruptcy court's decision Co approve Che
eettlement must be an informed one based upon an object the
evaluation of developed facie. ~Reiee v. Haamann at pp. B90 and
891. See also 1).S. v. Hardaae, 982 P.2d 1491 (10th Clr. 1997).
Ae was evident throughout the Adversary Proceeding,
Reorganized CF6I was acting in a fiduciary capacity on behalf of
the Retirees. The Court recognized Chia fact in !te Find Inge Of
Fact Md Conclusions Of Law Denying The Equitable Life Assurance
Society Of The United States' Motion For Summary Judgment (Dated
October 16, 1995), Md Cranting Reorganized CF6I 6tee1
Corporation's Motion For Pertfal Summary Judgment (Dated
September 1, 1995) at page 16 where St stated that "CFBI Steel
can collect the Reserves only ae a trustee or fiduciary on behalf
of its Retirees, not in its own name or own right".
Although Che Advereery Proceeding was no[ a class
action within Cha provisions of Rule 7027 of Che Federal Rules of
Bankruptcy Procedure, because Reorganl zed CF6I prosecuted the
wdvereary Proceeding ae a fiduciary for the benaflt of
! approximately 1,541 F,etlzeee who, assuming Court approval, will
enjoy the benefits of. the Settlement Agreement, the standards !or
binding [he Retirees, by analogy, should be similar to the
standards binding a class.
In Gottlieb v. Wiles, 11 P.3d 1004, 1013 (10th Cir.
1993), the Tenth CS rcult Court of Appeals discussed the
requirements of due process end Rule 2J (e) with respect to
binding members of a rises. The Court determined Chet Che
standard for the eettlement notice under Rule ~37(e) Se that it
must •fei rly appri ee" the class members of Che terms of the
proposed eettlement and of their options.
In conjunction with seeking approval of [he Settlement
Agreement, Reorganl zed CFbI !e seeking prior Court approval of
the form and manner of notice. Direct notice Se being given to
all known Retirees end additional notice ie being given by
publication. All parties Ln interest ere being fel rly appri aed
of the Cerme of Che proposed sett lemon[ and [ha lr right to
object. Therefore, 1f after such notice and opportunity [o
object the Court, applying applicable standards Eor a eet[lemen[