Chapter 19, A. Settlement

• Jurisdiction: United States

A. Settlement

Compromise and settlement are highly favored in bankruptcy, as they allow parties to "avoid the expense, burden, and uncertainty associated with litigation."⁴⁹³ A bankruptcy court can approve a settlement under Bankruptcy Rule 9019 if it is supported by adequate consideration, is fair and equitable and is in the best interests of the estate.⁴⁹⁴ Other parties-in-interest may object to the terms of the settlement; however, the standards for approval are often very deferential to the debtor's business judgment. "A court's role in evaluating a proposed settlement under Rule 9019 is to determine if the...