BANKRUPTCY BULLETIN
Contributing Author:
Gemma (Yoon Jeung) Jo
University of Minnesota Law School
Juris Doctor Candidate, 2024
Judicial Extern to U.S. Bankruptcy Judge Kesha Tanabe
In United States v. Kelley, 70 F.4th 482 (8th Cir. 2023), the Eighth Circuit affirmed a district court’s order granting a receiver’s motion to wind up a receivership, including approval of its fees, a final accounting, and record-retention policies. The Eighth Circuit held that a creditor had waived its ability to object to the receiver’s motion under a prior settlement agreement. It further held that the district court did not abuse its discretion by approving the receiver’s final accounting and record-retention policies.
A creditor entered into a settlement agreement with the receiver and the government in 2019. The district court approved this settlement. The settlement was accompanied by a ‘bar order’ that prohibited the creditor from asserting related claims in any other cases. Under the terms of the agreement, the receiver and the government agreed not to oppose the creditor’s motion for stay relief. In exchange, the creditor agreed not to file any additional motions, make any additional requests, or take any other action against the receiver or in the receivership’s case. The Eighth Circuit held that objecting to the receiver’s final accounting was an action against the receivership and was thus barred by the 2019 settlement agreement.
On appeal, the creditor argued that the district court abused its discretion by approving record-retention policies that allow the receiver to charge parties for access to certain records. The creditor also argued that the final accounting was particularly deficient for not identifying each entity in the receivership. The Eighth Circuit rejected both claims, stating that the creditor failed to identify any legal support for such positions, thus ruling that the district court had not abused its discretion by approving the receiver’s motion.
To read the Eighth Circuit’s opinion, click here.
Editors-in-Chief:
C.J. Harayda, Stinson LLP
David M. Tanabe, Winthrop & Weinstine, P.A.