Citibank, N.A. v. Kipperman (In re Commercial Money Center, Inc.)
Docket: No. 06-55251
Court: Court of Appeals for the Ninth Circuit; November 13, 2007; Federal Appellate Court
Citibank appeals the bankruptcy court's approval of a settlement agreement between Kipperman and ACE American Insurance Company and Illinois Union Insurance Company (collectively "ACE"). The district court upheld this approval, and the appellate court affirms. The court rejects ACE's request to dismiss the appeal as moot, stating that meaningful relief is still possible despite the settlement's completion. Citibank contends that the settlement impacts its interests in the Citibank Policy. However, the court clarifies that the settlement only affects the interests of the debtors and does not alter Citibank's rights. The bankruptcy court had jurisdiction over the debtors' estates and was within its rights to approve the settlement regarding the dispute between the debtors and ACE. Citibank's concern about the potential rescission of its policy is addressed by noting that the agreement explicitly applies to the debtors' interests. As such, Citibank is not legally prejudiced by the settlement. Furthermore, the possibility of ACE using the settlement to rescind the Citibank Policy is deemed remote, especially since CMC is not a party to this policy. Citibank also argues that the bankruptcy court improperly allowed the trustee to utilize the Citibank Policy in negotiations to secure a better settlement with ACE, which could be seen as using non-debtor assets to satisfy debtor debts. The court finds that the bankruptcy court carefully reviewed all relevant documents and conducted a hearing before approving the settlement, confirming that it only affects the interests of CMC. Finally, the bankruptcy court's decision not to include additional protective language for Citibank in the settlement agreement is upheld. The court concludes that the existing terms adequately protect Citibank's interests. The appellate ruling is affirmed, and the disposition is not intended for publication or to serve as precedent, except as allowed under 9th Cir. R. 36-3.