Case No. 97-11104-RS.United States Bankruptcy Court, D. Massachusetts.
July 26, 2007
MEMORANDUM OF DECISION ON PRINCIPALS’ MOTION FOR RECONSIDERATION AND TO ALTER COURT’S ORDER APPROVING SETTLEMENT AGREEMENT
ROBERT SOMMA, Bankruptcy Judge
The debtor partnership, its two partners, and a related individual who was trustee of the trust of which the partnership was sole beneficiary (collectively, the “Principals”) have moved for reconsideration of this Court’s order of June 19, 2007, allowing the motion of the Chapter 7 Trustee to approve a settlement agreement with Goffe, Inc. and certain of its principals and for related relief. The motion states four arguments for reconsideration, none of which the Court deems availing.
The first, that the parties have not truly come to a meeting of the minds, lacks merit because the settlement agreement has definite content; it says what it says, and to that the parties are bound. Moreover, this argument could have been raised earlier and therefore is not an appropriate subject for reconsideration.
The second is that the agreement is unworkable because the trustee cannot unilaterally dismiss a state court civil action that the agreement settles. This argument fails for four reasons. (a) This argument, too, could have been made earlier and therefore is inappropriate for reconsideration. (b) The agreement does not require that the trustee unilaterally dismiss the civil action. Rather, it requires that he and the defendants execute (and presumably file) a stipulation of dismissal. The Principals have articulated no reason why the Trustee and defendants cannot do this. (c) Even if the agreement requires actual dismissal, it is hardly clear that the Trustee
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cannot succeed in dismissing his claims against the defendants, even if a motion may be required to do so. Courts do not typically compel a plaintiff to prosecute an action the plaintiff has settled and no longer wants to prosecute, especially where the plaintiff is a trustee in bankruptcy and that agreement has been approved by the bankruptcy court. (d) If a requirement of a contract turns out to be impossible, contract law includes provisions for dealing with that eventuality; the possibility of impossibility in not cause not to enter into an agreement in the first place.
The third argument for reconsideration is that the agreement requires dismissal of the bankruptcy case upon the trustee’s certification that estate funds have been disbursed to creditors, but the Court cannot dismiss the case until the partners’ adversary proceeding against Goffe (No. 07-1222) for monetary sanctions remains pending. The Court disagrees. The partners’ rights (including any rights of the 110 Beaver Street Trust) to relief in the adversary proceeding are subject to the terms of the settlement, which was approved before the filing of the adversary proceeding. Moreover, the demands for relief in the adversary proceeding are predicated entirely on rights of the debtor and of the bankruptcy estate, which rights have now been settled by the agreement. Therefore, the adversary proceeding too must be dismissed.
The fourth argument is merely a reiteration of arguments advanced earlier and rejected.
For all these reasons, separate orders will enter denying the motion for reconsideration and dismissing the adversary proceeding.
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