UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
__________________
No. 96-30985
__________________
THE CAJUN ELECTRIC POWER COOPERATIVE, INC.,
Debtor.
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS,
Appellant,
versus
CAJUN ELECTRIC POWER COOPERATIVE, INC., BY AND THROUGH ITS
CHAPTER 11 TRUSTEE, RALPH R. MABEY; ENTERGY GULF STATES, INC.;
ENTERGY CORPORATION; UNITED STATES DEPARTMENT OF AGRICULTURE, ON
BEHALF OF RURAL UTILITIES SERVICE,
Appellees.
______________________________________________
Appeal from the United States District Court for the
Middle District of Louisiana
______________________________________________
August 5, 1997
Before SMITH, BARKSDALE, and BENAVIDES, Circuit Judges.
BENAVIDES, Circuit Judge:
Cajun Electric Power Cooperative, Inc. (“Cajun”) is a non-
profit rural electrical power cooperative that made an imprudent
investment in a nuclear power plant and is now a Chapter 11 debtor.
In this bankruptcy appeal, a committee representing more than 500
unsecured trade creditors asserting claims of approximately $7
million objects to the settlement of litigation between Cajun and
its two largest creditors. The district court, having withdrawn
the reference to the bankruptcy court in order to superintend the
case directly, approved the settlement.
Cajun’s largest creditor is the federal government’s Rural
Utilities Service (“RUS”) (formerly the Rural Electrification
Administration), which provided Cajun with loans and loan
guarantees for its investment in the River Bend nuclear plant. RUS
asserts that it has secured claims against Cajun of $4.2 billion.
Cajun’s second-largest creditor is the nuclear plant’s builder and
principal owner, Gulf States Utilities Co. (“Gulf States”), which
through its corporate successor, Entergy Gulf States, Inc.,
asserts unsecured claims of $400 million. The settlement was
agreed to by Cajun’s Chapter 11 trustee, Ralph R. Mabey.
The settlement approved by the district court would end the
litigation between Cajun, RUS, and Gulf States relating to the
River Bend plant. It also would resolve several other claims. In
the view of the district court, the settlement would clear the way
for approval of a plan of reorganization for the debtor, Cajun.
In the instant appeal, the trade creditors disavow any
intention of preventing a settlement of the underlying litigation.
They claim, however, that the settlement is flawed and should be
“modified.” They ask this court to order that the settlement be
made contingent upon approval of a reorganization plan, or,
alternatively, to equitably subordinate the claims of Gulf States
and RUS.
In support of these requests, appellants advance two distinct
2
legal theories. First, they contend that the settlement approved
by the district court is an impermissible sub rosa reorganization
plan. Alternatively, they contend that the settlement is not fair
and equitable.
We affirm the district court order approving the settlement.
Consequently, we need not address whether the unusual relief sought
by the Committee is appropriately addressed to this court.1
FACTUAL AND PROCEDURAL BACKGROUND
Cajun and Gulf States were bitter rivals who in 1980 united in
a common endeavor: construction of the River Bend nuclear reactor.
Cajun invested $588 million in River Bend in exchange for a 30
percent ownership stake. RUS lent Cajun a substantial amount of
capital for its investment in River Bend and guaranteed the
remainder of Cajun’s River Bend loans.
When River Bend turned out to be a financial drain, Cajun
attempted to remain solvent by raising its rates. This course was
disallowed by the Louisiana Public Service Commission on the ground
that River Bend was an imprudent investment. On December 21, 1994,
Cajun filed for protection from its creditors under Chapter 11.
1
As discussed below, this court has the authority to set aside
the order approving the settlement if we find that it was an abuse
of the district court’s discretion. That is not the relief sought
by the Committee, however. The Committee asks this court to order
that up to $7 million in unsecured trade creditors’ claims be paid
in full as part of any reorganization plan incorporating the
settlement.
Appellees contend that this relief is unauthorized by the
Bankruptcy Code, and if granted, would amount to a sub rosa
reorganization plan. They further contend that such a ruling would
amount to an order equitably subordinating the claims of Gulf
States and RUS, without the benefit of a trial in district court.
3
It is unnecessary to recount the entire history of Cajun’s
Chapter 11 proceedings. We need only provide a brief summary of
the settlement agreement approved by the district court.
If the settlement is affirmed, Cajun first and foremost would
be freed of any future involvement in River Bend. Cajun would be
obligated, however, to pay $107 million toward its share of the
reactor’s decommissioning trust fund. Cajun would be absolved of
any further liability for the plant’s decommissioning, but would be
barred from recovering any excess if the decommissioning fund
proves to be overfunded.
Cajun, unshackled from its River Bend investment, would drop
its suit against Gulf States seeking (1) rescission of the River
Bend agreement on grounds of fraud and error; or, in the
alternative, (2) damages for breach of contract, breach of
fiduciary duty, and mismanagement. A four-month trial was held in
district court on the fraud suit; it ended with the district court
ruling in Gulf States’ favor, although a final written opinion has
not issued. The breach of contract suit has not yet gone to trial;
the trustee has estimated that Cajun might recover $200 million in
damages.
The parties would relinquish several additional claims against
one another, including:
! Claims and counter-claims relating to Gulf States’
transmission of Cajun power (the “Transmission Services” suit).
Based on a ruling favoring Gulf States by the Federal Energy
Regulatory Commission (“FERC”), the settling parties estimate that
4
Cajun could be required to pay $55 million in counter-claim damages
if this suit runs its course.
! A dispute over Cajun’s unilateral decision to cease payments
to Gulf States on certain River Bend expenses (the “Service Water”
suit). Gulf States has obtained a preliminary injunction allowing
it to deduct the money withheld by Cajun, $58 million, from Gulf
States’ payments to Cajun for electricity generated by Cajun’s
coal-burning plant. The $58 million has been deposited in district
court; under the settlement, Gulf States would keep it.
! Cajun’s claim against Gulf States and RUS for equitable
subordination.2
! Claims between Cajun and RUS arising from River Bend,
including Cajun’s claims for lender liability and waiver of
deficiency judgment. Cajun retains the right to claim that RUS did
not perfect its security interest.
! Cajun transfers two transmission lines worth $20 million to
Gulf States, which agrees to transmit Cajun power through its
lines.
Also under the settlement, RUS succeeds to Cajun’s interest in
River Bend. RUS can keep this “asset,” sell it, or force Gulf
States to take it. In the unlikely event that the plant is sold to
a third party, Cajun will deduct the sale price from its debt to
2
A trustee in bankruptcy has standing to bring an equitable
subordination claim on behalf of the bankrupt estate’s creditors.
See Fruehauf Corp. v. T.E. Mercer Trucking Co. (In re T.E. Mercer
Trucking Co.), 16 B.R. 176, 187 (Bankr. N.D. Tex. 1981); First Bank
Billings v. Feterl Mfg. Co. (In re Parker Montana Co.) 47 B.R. 419,
421 (D. Mont. 1985).
5
RUS. The eventual owner of Cajun’s interest in River Bend would
receive any proceeds from litigation over design defects, estimated
by the trustee to be about $10 million.
The Committee representing the trade creditors did not ask the
district court to reject the Agreement. Instead, the Committee
requested that the court defer approval until confirmation of a
bankruptcy plan, or, in the alternative, approve the settlement
conditionally, pending confirmation of a plan. The district court
denied these requests and approved the settlement on August 27,
1996. The Committee appeals.
DISCUSSION
I. JURISDICTION
Because the district court did not sit as a bankruptcy appeals
court but heard the case itself as a court of bankruptcy, 28 U.S.C.
158(d) does not confer appellate jurisdiction on this court.
Instead, our jurisdiction is governed by 28 U.S.C. § 1291. Cajun
Elec. Power Coop., Inc. v. Central Louisiana Elec. Co. (In re Cajun
Elec. Power Coop., Inc.), 69 F.3d 746 (5th Cir. 1995), modified on
other grounds on reh’g, 74 F.3d 599 (5th Cir.) (per
curiam)(authorizing appointment of trustee in the instant case),
cert. denied, ---U.S.---, 117 S.Ct. 51, 136 L.Ed.2d 15 (1996).
Section 1291 vests the federal courts of appeals with
“jurisdiction of appeals from all final decisions of the district
courts . . . .” Appellate jurisdiction under this statute
ordinarily “depends on the existence of a decision by the District
Court that ‘ends the litigation on the merits and leaves nothing
6
for the court to do but execute the judgment.’” Coopers & Lybrand
v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457, 57 L.Ed.2d 351
(1978) (quoting Catlin v. United States, 324 U.S. 229, 233, 65
S.Ct. 631, 633, 89 L.Ed. 911 (1945)). However, it is settled in
this circuit that in the bankruptcy context, the liberalized final
judgment rule of 28 U.S.C. § 158(d) applies, even when appellate
jurisdiction is based on section 1291. Cajun, 69 F.3d at 748.
Under this rule, jurisdiction exists if there is an order finally
disposing of some, but not necessarily all, of the claims.
The district court’s approval of the settlement order brings
to an end the protracted litigation over the River Bend nuclear
project and various other claims among Cajun, Gulf States, and RUS.
It is “final” as the term is understood in bankruptcy.
Accordingly, we have jurisdiction under 28 U.S.C. § 1291.
II. SUB ROSA REORGANIZATION
We review de novo the district court’s legal conclusion that
the settlement does not effect a sub rosa plan of reorganization.
See Richmond Leasing Co. v. Capital Bank, N.A., 762 F.2d 1303, 1307
(5th Cir. 1985). Related factual findings are reviewed for clear
error. See id. at 1308.
A bankruptcy trustee is authorized by statute to “use, sell,
or lease, other than in the ordinary course of business, property
of the estate.” 11 U.S.C. § 363(b). Under the Bankruptcy Rules,
a trustee is permitted to settle lawsuits pursuant to section
363(b). FED. BANKR. R. 9019(a). However, section 363(b) does not
authorize the trustee to enter a settlement if the result amounts
7
to a sub rosa plan of reorganization. As we have stated:
The debtor and the Bankruptcy Court should not be able to
short circuit the requirements of Chapter 11 for
confirmation of a reorganization plan by establishing the
terms of a plan sub rosa in connection with a sale of
assets.
Pension Benefit Guar. Corp. v. Braniff Airways, Inc. (In re Braniff
Airways, Inc.), 700 F.2d 935, 940 (5th Cir. 1983). On the other
hand, “compromises are a normal part of the process of
reorganization, oftentimes desirable and wise methods of bringing
to a close proceedings otherwise lengthy, complicated and costly.”
Rivercity v. Herpel (In re Jackson Brewing Co.), 624 F.2d 599, 602
(5th Cir. 1980) (internal quotation marks and citations omitted).
The Committee asserts that the instant settlement effectively
gutted the assets of the estate without affording the unsecured
trade creditors the procedural protections of the reorganization
process. Specifically, the Committee contends that the settlement,
by removing more than $100 million from the estate and by
eliminating the estate’s equitable subordination claims against RUS
and Gulf States, effectively dictates the terms of any future
reorganization plan--an outcome proscribed by our cases. Appellees
counter that far from being a sub rosa reorganization plan, the
settlement removes a major obstacle to reorganization by ridding
Cajun of its involvement in River Bend. They point out that the
nuclear plant and related litigation had clouded title to Cajun’s
other assets, precluding any sale of those assets prior to a
settlement.
Appellees make a strong argument that the Committee failed to
8
preserve this issue for appeal by stating precisely the Chapter 11
protections that they would lose under the settlement. However,
even assuming that the Committee preserved the issue, we reject its
claim on the merits.3
The legal standard for deciding whether a transaction under
section 363(b) amounts to a sub rosa reorganization emerges from
our case law. In the Braniff case, this court reversed the
district court’s approval of a transaction that would have
transferred the bankrupt airline’s cash, aircraft and equipment,
and terminal leases to another airline (the purchaser) in exchange
for scrip for travel on the purchaser.
We found the transaction deficient on three grounds. First,
the agreement “had the practical effect of dictating some of the
terms of any future reorganization plan.” Braniff, 700 F.2d at
940. That is because, had a reorganization plan failed to restrict
the use of the travel scrip as specified in the agreement, the
scrip would have been forfeited. Id. Second, the agreement
required Braniff’s secured creditors to vote “in favor of any
future reorganization plan approved by a majority of the unsecured
creditors committee.” Id. The secured creditors’ voting rights
were thus infringed. Finally, the transaction “provided for the
release of claims by all parties against Braniff, its secured
3
In its reply brief, the Committee cites portions of the
district court record in which it listed various procedural
protections afforded by Chapter 11, such as the right to a
disclosure statement providing adequate information about any
proposed plan. Missing from this recitation is any indication of
how the Committee might lose these protections if the settlement is
approved.
9
creditors, and its officers and directors.” Id. (emphasis added).
Had the sale of Braniff’s assets been approved, we concluded,
“little would remain” in the estate and there would be “little
prospect or occasion for further reorganization.” Id.
The instant settlement is not a sub rosa reorganization of the
type disapproved in Braniff. It does not dispose of all claims
against Cajun, nor does it restrict creditors’ right to vote as
they deem fit on a proposed reorganization plan. Finally, the
settlement does not dispose of virtually all of Cajun’s assets,
leaving “little prospect or occasion for further reorganization.”
Cf. Braniff, 700 F.2d at 940. Instead it disposes of one
particular “asset,” River Bend, which is not so much the crown
jewel of Cajun’s estate but its white elephant. Cf. Richmond
Leasing Co. v. Capital Bank, N.A., 762 F.2d 1303 (5th Cir. 1985)
(recognizing that the disposal of a crown jewel asset might, in
some circumstances, amount to a sub rosa plan). The removal of
River Bend from the estate will facilitate Cajun’s reorganization,
and will do so without denigrating the rights of the unsecured
trade creditors.
Undeniably, the settlement removes $107 million in cash and
transmission lines worth $20 million from the debtor’s estate; it
also precludes Cajun from pursuing litigation--an uncertain
prospect at best--against Gulf States and RUS.4 However, Cajun
retains as much as $1.1 billion in non-River Bend assets. In sum,
4
As noted above, Cajun retains the right to pursue certain
claims against RUS, including the claim that its security interest
was not perfected.
10
the settlement does not “alter creditors’ rights, dispose of
assets, and release claims to the extent proposed in the wide-
ranging transaction disapproved in” Braniff. Richmond Leasing, 762
F.2d at 1303. The cases are entirely distinguishable, and the
settlement at issue does not effect a sub rosa plan.
III. FAIR AND EQUITABLE SETTLEMENT
The Committee argues in the alternative that the settlement
violates the “fair and equitable” standard and that the district
court erred by approving it without conditioning the settlement on
approval of a reorganization plan.
We review the district court’s decision to approve the
settlement for an abuse of discretion. Connecticut Gen. Life Ins.
Co. v. United Cos. Fin. Corp. (In re Foster Mortgage Corp.), 68
F.3d 914, 917 (5th Cir. 1995) (internal citations omitted).
Subsidiary factual findings are reviewed for clear error. Id.
As noted above, the courts are empowered to approve a
compromise settlement of a debtor’s claim under Bankruptcy Rule
9019(a). See id. Approval should only be given if the settlement
is “fair and equitable and in the best interest of the estate.”
Id. (citing In re Jackson Brewing Co., 624 F.2d at 602 (additional
citations omitted)). The “fair and equitable standard” is not as
vague as it might appear to be. “The words ‘fair and equitable’
are terms of art--they mean that senior interests are entitled to
full priority over junior ones.” United States v. AWECO, Inc. (In
re AWECO, Inc.), 725 F.2d 293, 298 (5th Cir.) (internal quotation
marks and citations omitted), cert. denied, 469 U.S. 880, 105 S.Ct.
11
244, 83 L.Ed.2d 182 (1984).
In deciding whether a settlement of litigation is fair and
equitable, a judge in bankruptcy must make a well-informed
decision, “compar[ing] the terms of the compromise with the likely
rewards of litigation.” Jackson Brewing Co., 624 F.2d at 602
(internal quotation marks and citation omitted). In particular:
[The judge] must evaluate and set forth in a
comprehensible fashion:
(1) The probability of success in the litigation, with
due consideration for the uncertainty in fact and law,
(2) The complexity and likely duration of the litigation
and any attendant expense, inconvenience and delay, and
(3) All other factors bearing on the wisdom of the
compromise.
Id. (internal citation omitted).
With respect to the first factor, it is unnecessary to conduct
a mini-trial to determine the probable outcome of any claims waived
in the settlement. “The judge need only apprise himself of the
relevant facts and law so that he can make an informed and
intelligent decision . . . .” La Salle Nat’l Bank v. Holland (In
re American Reserve Corp.), 841 F.2d 159, 163 (7th Cir. 1987).5
Under the rubric of the third, catch-all provision, we have
specified two additional factors that bear on the decision to
approve a proposed settlement. First, the court should consider
the best interests of the creditors, “with proper deference to
their reasonable views.” Foster Mortgage Corp., 68 F.3d at 917.
Second, the court should consider “the extent to which the
5
In this case, the district court had already tried a four-
month trial on the rescission claim and was more than familiar with
the applicable facts and law.
12
settlement is truly the product of arms-length bargaining, and not
of fraud or collusion. Id. at 918 (internal citations omitted).
Applying this standard to the facts of the instant case, we
conclude that the district court did not abuse its discretion by
approving the settlement. We consider each factor in turn.
Probability of Success in Litigation. The settlement requires
Cajun to abandon several claims against Gulf States and RUS. None
of these actions look particularly promising from our vantage
point, and more important, none impressed the district court.
Under the agreement, Cajun would drop its suit against Gulf
States for rescission of the River Bend joint ownership agreement.
The probability of Cajun’s succeeding in this action is close to
nil, inasmuch as Cajun has already lost after a four-month trial in
district court. Moreover, the district court, which is
excruciatingly familiar with the details of this case, found that
Cajun had little chance of succeeding in the companion action
seeking damages for breach of contract and breach of fiduciary
duty.
The settlement also would require Cajun to drop the
Transmission Services suit. This action has boomeranged against
Cajun, resulting in a judgment of $55 million against it on Gulf
States’ counter-claim.
Cajun would be forced to drop the Service Water suit as well.
In that action, Gulf States has obtained an injunction effectively
denying Cajun the right to withhold payment for various River Bend
expenses. Cajun does not seem to be giving up anything of value by
13
waiving its right to pursue these actions.
Perhaps most important to the Committee, Cajun would be
required to surrender any claim of equitable subordination against
Gulf States and RUS. These claims too are unlikely to succeed, for
the reasons that follow.
The Bankruptcy Code provides that “after notice and a hearing,
the court may--(1) under principles of equitable subordination,
subordinate for purposes of distribution all or part of an allowed
claim to all or part of another allowed claim . . . .” 11 U.S.C.
§ 510(c). Equitable subordination is remedial in nature and is
only rarely granted. United States Abatement Corp. v. Mobil
Exploration & Producing U.S., Inc. (In re United States Abatement
Corp.), 39 F.3d 556, 561 (5th Cir. 1994).
The Bankruptcy Code does not specify the circumstances in
which equitable subordination is appropriate. Instead, drawing on
common law principles, this circuit has crafted a widely followed
standard authorizing equitable subordination if three preconditions
are satisfied. Under this test, equitable subordination is
permitted when (1) the claimant engaged in inequitable conduct; (2)
the conduct resulted in harm to the creditors or conferred an
unfair advantage upon the claimant; and (3) equitable subordination
is not inconsistent with the Bankruptcy Code. United States
Abatement Corp., 39 F.3d at 561 (citing Fabricators, Inc. v.
Technical Fabricators, Inc. (In re Fabricators, Inc.), 926 F.2d
1458, 1464 (5th Cir. 1991)); see also Benjamin v. Diamond (In re
Mobile Steel Co.), 563 F.2d 692, 699-700 (5th Cir. 1977)
14
(additional citations omitted). As a practical matter, we
generally have found equitable subordination in only three typical
cases: “(1) when a fiduciary of the debtor misuses his position to
the disadvantage of other creditors; (2) when a third party
controls the debtor to the disadvantage of other creditors; and (3)
when a third party actually defrauds other creditors.” United
States Abatement Corp., 39 F.3d at 561 (internal citations
omitted).
The settlement would force Cajun to relinquish claims of
equitable subordination against Gulf States and RUS. The only
conceivable bases for these claims are (1) that Gulf States
breached a fiduciary duty to Cajun, and (2) that RUS controlled
Cajun to the trade creditors’ disadvantage. However, Cajun has
failed to present a persuasive argument as to why Gulf States owed
it a fiduciary duty, let alone as to how Gulf States breached that
duty. Moreover, the theory that Cajun was controlled by RUS is
far-fetched.
The typical case of equitable subordination based on creditor
control of the debtor involves a corporate insider. See, e.g.,
Fabricators, 926 F.2d at 1465-66. On occasion, bankruptcy courts
have found that a creditor exerted such dominance over the debtor
as to warrant subordination of the creditor’s claims. However, the
degree of control in such cases far exceeds the influence of RUS
over Cajun, and is typically related to some egregious misconduct
by the creditor. See, e.g., In re American Lumber Co., 5 B.R. 470,
478-79 (D. Minn. 1980) (creditor deprived borrower of its sole
15
source of cash, forced it to adopt austerity measures, decided
which creditors would be paid, and required debtor to provide
secured interest in all remaining assets); Slefco v. First Nat’l
Bank of Stuttgart (In re Slefco), 107 B.R. 628 (Bankr. E.D. Ark.
1989) (bank made false representations to debtor about amount of
loan and ability to borrow in the future, leading debtor to pledge
all its assets to the bank); Bank of New Richmond v. Production
Credit Ass’n of River Falls (In re Osborne), 42 B.R. 988 (W.D. Wis.
1984) (affirming subordination based on affirmative
misrepresentation to another creditor). In this case, by contrast,
Cajun does not even bother to allege that RUS engaged in
inequitable conduct. Nor does Cajun explain how RUS, an arm of the
government with no authority to actually take over and run the
company, can rationally be viewed as its alter ego.
In sum, Cajun’s prospects in the courtroom, on the equitable
subordination claims as in its other lawsuits, are iffy at best.
More likely, they are dismal. Our review of Cajun’s likelihood of
success in litigation does not support the Committee’s assertion
that the settlement should be modified.
Complexity and Expense of Litigation. We need not belabor
this factor. According to the trustee, the litigation has cost
Cajun $37 million to date, and continuing the litigation would cost
“millions of dollars and years of delay.” The district court has
repeatedly commented upon the complexity of the legal issues
raised. The fraud trial in district court took four months; the
breach of contract trial would consume an estimated seven to
16
fourteen months. Moreover, the district court found that
continuing the litigation would waste the estate’s resources and
chill efforts to acquire Cajun’s non-nuclear assets. These
findings were not clearly erroneous.
Given the complexity and cost of the litigation, settlement is
advisable.
The Best Interests and Wishes of the Creditors. The trustee
testified, and the district court found, that Cajun’s ownership
interest in River Bend was a major impediment to reorganization.
The district court also determined that the settlement would remove
this obstacle without altering the creditors’ rights under the
Code. The court thus concluded that the settlement was in the
creditors’ interests. None of these findings were clear error.
The issue is complicated somewhat by the requirement that the
court, in considering whether a settlement is fair and equitable,
consider the reasonable views of a majority of the creditors. In
re Foster Mortgage Corp., 68 F.3d at 917. In this case, the vast
numerical majority of creditors is represented by the Committee,
which opposes the settlement as approved by the district court.6
The appellees point out, however, that the trade creditors’
aggregate claim against Cajun is only a drop in the bucket--by some
estimates less than one percent of Cajun’s total debt.
Even if we were to count heads and declare that a majority
opposes the settlement, it is established that the “desires of the
6
The Committee contends that it would not oppose the
settlement, if only it were conditioned on approval of a plan that
protected their interests.
17
creditors are not binding.” In re Foster, 68 F.3d at 917. The
test is not the desires of the majority as such, but the best
interests of the creditors, taking into account their reasonable
views. In this case there is room to argue about who speaks for
the “majority.” But given the salutary effects of a settlement on
the prospects for reorganization, and given also the relatively
small amount of the trade creditors’ claims, the district court did
not clearly err by finding the settlement in the creditors’
interests. In any event, given that all of the other factors in
the equation overwhelmingly favor the settlement, the wishes of the
trade creditors do not compel us to reject the settlement.
Arms-Length Negotiations. The Committee does not contest the
district court’s determination that the settlement was the result
of arms-length bargaining, and not the result of fraud or
collusion.
Based on the foregoing factors, we hold that the district
court did not abuse its discretion by finding that the settlement
was fair and equitable.7 Cajun’s prospects in the litigation are
dubious; the cost and complexity of the litigation are staggering.
The settlement was the result of arms-length bargaining. And
although a numerical majority of creditors opposes the settlement,
7
The district court cited public safety as one more factor
favoring the settlement. We do not doubt that the public interest
will be served by a settlement that resolves a dispute over River
Bend’s decommissioning trust fund, thus assuring the availability
of funds for the safe decommissioning of the nuclear plant.
However, we do not rely on this factor and need not decide whether
public safety is an appropriate consideration in determining
whether a settlement is fair and equitable.
18
the overall interests of the creditors, giving due regard to the
views of the two largest creditors as well the many smaller ones,
will be well served by the settlement.
CONCLUSION
The order of the district court approving the settlement is
AFFIRMED.
19