Fleet National Bank v. H&D Entertainment, Inc.

October 11, 1996 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 96-1218
No. 96-1523

FLEET NATIONAL BANK,

Plaintiff, Appellee,

v.

H&D ENTERTAINMENT, INC.,
(f/k/a DOVER BROADCASTING, INC.),
and H&D MANAGEMENT, INC.,
as general partner of each of
H&D BROADCASTING LIMITED PARTNERSHIP,
H&D MEDIA LIMITED PARTNERSHIP,
H&D RADIO LIMITED PARTNERSHIP, and
H&D WIRELESS LIMITED PARTNERSHIP,

Defendants, Appellants,

v.

PNC BANK, OHIO, N.A.,
CHARLES E. GIDDENS, individually, as receiver
and as general partner of MEDIA VENTURE PARTNERS,

Additional Counterclaim Defendants, Appellees.

ERRATA SHEET

The opinion of this Court, issued on September 24, 1996, is
amended as follows:

On page 8, 2nd line of footnote 2, add comma after "cert.

denied".

On page 15, 1st line of indented quote, replace "there" with
"[T]here".

On page 16, 1st full paragraph, line 10, replace "(1990);" with
"(1990)." and delete "Restatement (Second) of Contracts.".

On page 19, 2nd full paragraph, line 2, replace "trustee" with
"trustees".

On page 22, line 1, replace "F. Suppp." with "F. Supp.".

On page 22, lines 7-8 of 2nd paragraph, delete "The borrowers
apparently did not even cross-examine Zitelman on this issue."

On Page 23, line 6 of 1st full paragraph, underline "Code of
Conduct for United States Judges" and delete comma after "Judges".

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 96-1218
No. 96-1523

FLEET NATIONAL BANK,

Plaintiff, Appellee,

v.

H&D ENTERTAINMENT, INC.,
(f/k/a DOVER BROADCASTING, INC.),
and H&D MANAGEMENT, INC.,
as general partner of each of
H&D BROADCASTING LIMITED PARTNERSHIP,
H&D MEDIA LIMITED PARTNERSHIP,
H&D RADIO LIMITED PARTNERSHIP, and
H&D WIRELESS LIMITED PARTNERSHIP,

Defendants, Appellants,

v.

PNC BANK, OHIO, N.A.,
CHARLES E. GIDDENS, individually, as receiver
and as general partner of MEDIA VENTURE PARTNERS,

Additional Counterclaim Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nancy Gertner, U.S. District Judge]

Before

Torruella, Chief Judge,

Boudin, Circuit Judge,

and Barbadoro,* District Judge.

*Of the District of New Hampshire, sitting by designation.

Stephen F. Gordon with whom Stanley W. Wheatley and Gordon & Wise

were on briefs for defendants, appellants H&D Entertainment, Inc. and
H&D Management, Inc., and claimants, appellants, Joel M. Hartstone,
Barry J. Dickstein, Hartstone and Dickstein, Inc., Barry Dickstein &
Co., Inc. and Joan Rory Hartstone.
John D. Hanify and Charles L. Glerum with whom Harold B. Murphy,

Matthew P. McCue, Hanify & King, P.C., Paul E. Morton, Morton &

McCrevan, Sara A. Walker, Joseph H. Zwicker, Terri L. Ross and Choate,

Hall & Stewart were on briefs for appellees.

September 24, 1996

BOUDIN, Circuit Judge. At issue in this case are two

different appeals, which we have consolidated, whose source

is a lawsuit over unpaid bank loans. In one appeal, the

borrowers contest the grant of summary judgment in favor of

the lending bank; in the other appeal, the borrowers

challenge the district court's approval of a sale by the

receiver of borrower assets that secured the loans. In both

instances, we affirm.

The background facts are largely undisputed. Between

1983 and 1988, Fleet National Bank ("Fleet") provided various

interrelated loans and lines of credit to H&D Entertainment,

Inc., and other associated corporations and partnerships

(collectively, "the borrowers"); the borrowers were licensees

or had other ownership interests in radio stations in various

cities, and those assets secured the loans. In early 1994,

Fleet concluded that the borrowers were in default and

brought suit in two different federal district courts to

collect upon different notes made or guaranteed by the

borrowers.

On March 31, 1994, Fleet and the borrowers entered into

a written settlement agreement. In exchange for Fleet's

forbearance on the loans and dismissal of its law suits, the

borrowers agreed to a repayment plan based on the sale of the

radio stations. The settlement agreement provided that if

the borrowers failed to comply with the plan's terms, this

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failure would end Fleet's forbearance obligation and also

constitute the borrower's consent to the appointment of a

receiver who would muster the assets and pay the debts.

Fleet claims that on November 30, 1994, the borrowers

missed the first deadline established under the settlement

agreement. As Fleet reads the agreement, the borrowers were

required by that date either to have made a down payment of

$6.4 million or to have in force purchase agreements with

third parties obligating the latter to buy stations from the

borrowers for that amount or more. The borrowers dispute

this reading. The precise terms of the settlement agreement

and other pertinent facts are set forth below.

On December 2, 1994, Fleet brought the present action in

the federal district court in Massachusetts against the

borrowers seeking over $12.9 million plus interest based on

the notes and guarantees. Later, the borrowers

counterclaimed. In the meantime, Fleet moved for the

appointment of Charles Giddens as receiver for the stations.

Giddens had an extensive background in appraising and selling

radio stations and was a partner in a brokerage firm, Media

Venture Partners, experienced in this field. In the past,

Giddens had been appointed by courts to serve as receiver for

radio stations and his firm had acted as broker in their

sale.

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The district court designated Giddens as receiver and

thereafter approved his retention of Media Venture Partners

to act as broker in the sale of the stations, comprising four

principal properties in Connecticut, Illinois, Massachusetts

and New Jersey. Giddens also retained The Zitelman Group,

Inc., to prepare monthly financial statements for the

stations and certain tax filings. The Zitelman Group was one

of the few firms known to Giddens as experienced in radio

station accounting and prepared to do such work on a

temporary basis.

In March 1995, Media Venture Partners solicited bids

from several hundred possible purchasers, widely publicizing

the proposed sale. The largest bid, offering to buy all four

station properties for approximately $15.3 million, was made

by Spring Broadcasting, L.L.C. ("Spring"), which is

associated in ownership and management with The Zitelman

Group. The bid was subject to further examination by the

bidder and further negotiations. At Giddens' request, The

Zitelman Group resigned its bookkeeping tasks in June 1995,

so that Giddens could freely negotiate a definitive purchase

agreement with Spring.

Throughout the period, the borrowers made constant

objections to the receiver, the proposed sale, and many other

details. It appears that the prospective sale price being

negotiated would not even cover in full the borrowers' debts

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to Fleet plus interest, let alone leave any equity for the

borrowers. Thus, the borrowers had little incentive to

cooperate in the receiver sale. Still, as the district court

pointed out, the prospective deficiency did give Fleet reason

to obtain as much as possible for the stations.

During the spring of 1995, Fleet and the borrowers filed

cross motions for partial or complete summary judgment, the

central issue being whether the borrowers had breached the

settlement agreement. The cross motions were heard by a

magistrate judge in June 1995. In early July 1995, the

magistrate judge wrote a lengthy report and recommendation,

concluding that Fleet's motion should be granted and the

borrowers' motion should be denied. Ultimately, the district

court approved the report and recommendations of the

magistrate judge. This resolution would have disposed of

most but not all of the claims on each side.

Giddens and Spring negotiated a final purchase price of

just under $14 million during the summer of 1995, the lower

price reflecting some deterioration of the stations and other

adjustments. The magistrate judge held hearings, heard

objections, and ultimately approved Giddens' proposal as to

the procedures for completing the sale. This involved a

second round of bidding, effectively inviting others to

exceed the Spring offer. Information was furnished to

prospective bidders, but no such bids were made. During this

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period the borrowers conduct discovery. In October and

November 1995 the district court held hearings on the

proposed sale.

During the fall, Giddens and Spring modified the

proposed sale in certain respects. When the borrowers asked

for a new round of competitive bidding because of the

changes, Giddens conducted a third round of bidding ending in

January 1996. No better bids were made. Further discovery

was allowed to the borrowers. In January 1996 the district

court held a further evidentiary hearing and then approved

the sale from the bench. In April 1996, the district court

issued a lengthy decision explaining its decision to approve

the sale to Spring. Fleet National Bank v. H&D

Entertainment, Inc., 926 F. Supp. 226 (D. Mass. 1996).

1. The borrowers have now appealed both from the order

resolving the summary judgment motions and from the order

approving the receiver's sale of the stations to Spring. At

the outset, the borrowers argue that the summary judgment

order is not properly before us, because it did not dispose

fully of all of the claims or all of the counterclaims.1 For

this reason, the district court directed, on approving the

1On Fleet's claims, seven of the eight counts involved
computation of damages and at least the interest component
remained to be resolved. As for the borrowers'
counterclaims, the claims against Fleet were fully resolved
but two other claims directed by the borrowers against the
receiver were not.

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magistrate judge's report and recommendation, "that final

judgment be entered, pursuant to [Fed. R. Civ. P.] 54(b) and

28 U.S.C. 1291."

The borrowers do not argue that the district court

failed to make or support the finding required by Rule 54(b)

for a separate judgment on less than all claims or parties,

namely, that there is "no just reason for delay." Rather,

they simply assert that there is case law forbidding the use

of Rule 54(b) as to any claim that has been adjudicated as to

liability but not damages. E.g., Liberty Mut. Ins. Co. v.

Wetzel, 424 U.S. 737, 744 (1976). This is the status of most

of Fleet's claims against the borrowers, although Fleet says,

citing Herzog Contracting Corp. v. McGowen Corp., 976 F.2d

1062, 1064 (7th Cir. 1992), that the mere calculation of

interest due is ministerial and should not impair finality as

to those claims.

The borrowers' objection to their own appeal is an ill-

advised attempt to throw sand in the wheels. The district

court's order approving the sale of the stations to Spring is

properly before us--because by judicial gloss, such an order

is treated as a final decision under 28 U.S.C., 1291,

because of its importance and irrevocable character.2 And in

2SEC v. American Bd. of Trade, Inc., 829 F.2d 341, 344

(2d Cir. 1987), cert. denied, 486 U.S. 1034 (1988); Citibank,

N.A. v. Data Lease Fin. Corp., 645 F.2d 333, 337 (5th Cir.

1981). See generally Forgay v. Conrad, 47 U.S. (6 How.) 201,

203-04 (1848); 15A Wright, Miller, Cooper & Gressman, Federal

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reviewing the sale order, the borrowers are free to challenge

any other ruling of the district court that underpins the

sale order. E.g., Avery v. Secretary of Health & Human

Servs., 762 F.2d 158, 161 (1st Cir. 1985); 16 Wright, Miller,

Cooper & Gressman, Federal Practice and Procedure 3921

(1977).

Here, the decision that the borrowers violated the

settlement agreement does underpin the sale. The borrowers'

violation is the central premise for the appointment of the

receiver and the authorization permitting the receiver to

sell the security. In short, the borrowers are free, in

challenging the sale order, to make their central claim that

they did not violate the settlement agreement. This would be

so even if Rule 54(b) had never been invoked as to the

summary judgment order, and even if the summary judgment

order were not before us except as a premise of the sale

order.

Conversely, the borrowers are mistaken in thinking that

if they successfully challenged the Rule 54(a) designation,

they could undo or invalidate the district court's decision

on summary judgment. At best, they might limit this court's

review to those aspects of the summary judgment decision that

directly underpin the order approving the sale. But, so far

as we can ascertain, the only attack made by the borrowers is

Practice and Procedure 3910 (2d ed. 1991 & Supp. 1996).

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on just such an aspect of the summary judgment decision,

namely, the ruling that the borrowers breached the settlement

agreement.

Thus, we have jurisdiction both over the order approving

the sale and, incident to review of that order, over the only

attack made on the summary judgment decision, regardless of

Herzog Contracting. Further, the district court's order

directed to the summary judgment motions is properly before

us under Rule 54(b) at least insofar as that order completely

disposes of most of the borrowers' individual counterclaims.

Since we have plenary jurisdiction over the summary judgment

order at least as to those claims, we are free to review--and

affirm--both orders against the only attack made upon them.

2. We turn now to the merits of that attack, namely,

the district court's ruling that the borrowers breached the

settlement agreement by failing either to make a $6.4 million

initial payment by November 30, 1994, or alternatively to

make sales agreements by that time in a comparable amount.

Summary judgment is proper if there are no genuine issues of

material fact and the law otherwise warrants judgment for the

moving party; inferences and credibility are taken in favor

of the opposing party; and review on appeal is de novo. Roy

v. Inhabitants of the City of Lewiston, 42 F.3d 691, 694 (1st

Cir. 1994).

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The settlement agreement (in section 5(a)) required the

borrowers either to have paid Fleet $6.4 million by November

30, 1994--which did not occur--or to meet an alternative

condition stated as follows:

On or prior to November 30, 1994, members of the
Borrower Group shall have . . . entered into
binding [purchase and sale] agreements . . . which
shall have become fully effective as contemplated
below, providing for the sale, to one or more
purchasers, of two or more Station Combinations
providing for aggregate Net Sales Proceeds of not
less that $6,400,000 . . . .

Later dates were provided by which two further specified

payments (or sales contracts in like amounts) were to be

made. In addition, the settlement agreement provided (in

section 5(e)) a trio of corresponding dates by which

contracted-for station sales had to be completed. Thus, the

first sale--contracted for by November 30, 1994, for not less

than $6.4 million--had to be consummated by March 31, 1995.

The five-month lag time was set to permit the necessary

approval of license transfers by the Federal Communications

Commission. This provision also required the borrowers to

use their best efforts to obtain FCC approval, but it

provided for reasonable extensions of time if, despite the

borrowers' diligence, FCC approval were delayed past March

31, 1995 (or comparable dates for the other two

installments).

In this court, both sides agree that by November 30,

1994, the borrowers had paid only $1,050,000 toward their

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debt. But, on summary judgment, the borrowers said that they

satisfied the alternative obligation under section 5(a)--

quoted above--by entering into an agreement to sell stations

for enough money to generate the balance of the $6.4 million

first payment. The facts as to what happened are largely

undisputed; the disagreement before us turns on an issue of

contract interpretation.

On June 23, 1994, well in advance of November 30, 1994,

deadline, the borrowers contracted to sell two of the

stations to a third party for amounts that, taken together

with the prior $1 million payment, would have satisfied the

November 30, 1994, obligation. This June 1994 sales contract

conditioned the buyer's obligation on one of the radio

stations attaining a listenership ranking of number 1 or 2 in

the demographic category of adults age 25-54, as determined

by the Arbitron ratings service. In July 1994, before

consummation, new Arbitron ratings placed the station in

seventh place and, in September 1994, the buyer terminated

the sales contract.

On summary judgment and on appeal, the borrowers'

central position has been that they complied with the literal

terms of the settlement agreement because, in the words of

section 5(a) quoted above, they "entered into" the required

"binding" and "fully effective" contract "[o]n or prior to"

November 30, 1994. The borrowers say that it is no part of

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their problem that their June 1994 contract to sell the

stations lapsed well before November 30, 1994, and that no

such sales contract was in effect on that date. We join the

magistrate judge and the district court in rejecting the

borrowers' reading of the settlement agreement.

By its own terms, the settlement agreement is to be read

in accordance with Massachusetts law. Under the precedents,

ably parsed by the magistrate judge in his report adopted by

the district court, a contract governed by Massachusetts law

must be construed in accord with common sense, the likely

intent of the parties and (in commercial cases) "as a

business transaction entered into by practical [people] to

accomplish an honest and straightforward end." Shapiro v.

Grinspoon, 541 N.E.2d 359, 363 (Mass. App. Ct. 1989). In

short, words matter; but the words are to be read as elements

in a practical working document and not as a crossword

puzzle.

In all likelihood, the phrase "fully effective" in the

settlement agreement refers to the satisfaction of certain

conditions precedent specified in the settlement agreement

itself (e.g., the borrowers' filing of FCC applications for

license transfer within 20 days). The magistrate judge--

whose report the district court adopted--reasoned that the

term "binding," to avoid superfluity, should be read to

exclude "contingent purchase obligations which lapsed before

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ever ripening into absolute ones." Thus, he concluded that

even on the most literal reading, the borrowers failed to

meet the requirement.

In our view, it is uncertain whether the parties to the

settlement agreement entertained any very precise notion of

the meaning of "binding." The term is often used--

redundantly in most contexts--to mean legally enforceable,

Black's Law Dictionary 168-69 (6th ed. 1990), and lawyers

typically overwrite documents in this fashion. Further, at

least one condition subsequent--that of FCC approval--was

likely to remain unresolved until after November 30. But we

think that even if the term "binding" is given no special

meaning, the result is the same based upon a common-sense

appraisal, elsewhere stressed by the magistrate judge.

A self-evident aim of the settlement agreement was to

make certain, by November 30, 1994, that future payment to

Fleet of the $6.4 million was reasonably assured, assuming

that actual payment had not already occurred. By law, the

intended assurance would still be subject to the specific

condition of FCC approval of the license transfers; and, of

course, bankruptcy of the buyer or other intervening events

might otherwise have frustrated the sale. But a sales

contract that lapsed by its own terms prior to November 30

simply does not satisfy the obvious basic objective of

providing reasonable assurance to Fleet.

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To adopt this view does not require that we suppose that

the parties had an exact and identical view of how every

contingency or condition might satisfy or violate the

settlement agreement. It is enough that reasonable parties

would not have believed that this settlement agreement would

be satisfied where the seller and buyer built into the sales

contract a significant condition subsequent that defeated the

obligation to buy and led to the lapsing of the contract

prior to November 30. See generally Cooke v. Lynn Sand &

Stone Co., 70 F.3d 201, 204-05 (1st Cir. 1995). Other

variations might present more difficulties.

The borrowers have a fall-back position. They argue

that the settlement agreement is at worst ambiguous and that,

given the ambiguity, they are entitled to a trial to present

evidence. Further, they point to the affidavit of Joel

Hartstone, a leading figure in the management of the

borrowers, that in the course of negotiating the settlement

agreement,

[T]here were specific discussions regarding the
understanding that, if the Borrower Group fulfilled
its good faith efforts obligations by entering into
purchase and sale agreements, and if those
agreements then terminated, the Borrower Group
still would have until the principal payment
deadline to consummate a transaction with a
substitute purchaser.

Hartstone's gloss is highly unlikely as a statement of

the parties' actual intent in section 5(a) but not quite

impossible. It is highly unlikely because it is so serious a

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departure from the words and structure of the settlement

agreement. Nothing in section 5(a) suggests that the

contract signing was merely a "good faith efforts" hurdle; if

that was the intention, it could easily have been expressed.

Further, there is a lucid "best efforts" clause in section

5(e), pertaining to the borrowers' duty to seek FCC approval,

but none in section 5(a).

Still, this would be a more difficult case if there were

solid extrinsic proof--that is, evidence independent of the

words of the settlement agreement--that the parties mutually

intended section 5(a) to have the meaning claimed by

Hartstone. The contract could rationally have been drafted

as Hartstone urges, and sometimes parties fail to express

themselves clearly in their drafting. This looks, at first

glance, like a classic problem as to when extrinsic evidence

may be offered to assist in contract interpretation, an issue

largely governed by the parol evidence rule.

Somewhat simplified, the traditional version of the

parol evidence rule is that a contract provision is either

clear or ambiguous and that, in the former case, extrinsic

evidence of negotiations is prohibited (if the contract was

intended to be a complete integration). The modern approach,

embodied in the Restatement (Second) of Contracts (1981),

allows extrinsic evidence to "interpret" even a seemingly

unambiguous contract, but not to vary or contradict its

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terms. Id. 212(1) and comment b, and 214(c) (1981).

See Farnsworth, Contracts 7.12 (1990). Massachusetts

courts may tend toward the older view but not unequivocally

so. Compare ITT Corp. v. LTX Corp., 926 F.2d 1258, 1261-62

(1st Cir. 1991), with Robert Indus. Inc. v. Spence, 291

N.E.2d 407 (Mass. 1973).

In this case, the elaborate settlement agreement was

plainly intended as a complete integration and contains a

clause to this effect. Thus, if the Hartstone affidavit were

sufficient, it would pose nice questions as to whether

Massachusetts law requires an ambiguity before permitting

extrinsic evidence, (if so) whether the agreement is

ambiguous on the point at issue, and (above all) whether the

Hartstone gloss can be said to explain--rather than

contradict--the terms of the agreement. A factfinder might

also have to decide whether Hartstone's affidavit correctly

and fully described what was said at the negotiations.

But Hartstone's affidavit is not sufficient to raise a

genuine issue of material fact. The affidavit contains only

the conclusory assertion that in the negotiations there were

"specific discussions" adopting his best-efforts

interpretation. No dates, names or actual statements are

supplied; not a single "specific" is set forth to

demonstrate, or even illustrate, the content of the alleged

"specific discussions." There is only some lawyer-like

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argument in a further paragraph as to why Hartstone's "best

efforts" gloss conformed to the general tenor of the

agreement.

Thus, the quoted passage in Hartstone's affidavit did

not create a genuine issue of fact as to what happened at the

negotiations. Nor did it supply specific facts that, if

uncontested, might have affected the district court's own

reading of the settlement agreement. Cf. Lumpkin v.

Envirodyne Indus., Inc., 933 F.2d 449, 456 (7th Cir. 1991)

(court may construe document if facts undisputed). It is

just the kind of conclusory affidavit statement that is

regularly disregarded by courts. Wynne v. Tufts Univ. Sch.

of Medicine, 932 F.2d 19, 27-28 (1st Cir. 1991); Posadas de

Puerto Rico, Inc. v. Radin, 856 F.2d 399, 401-02 (1st Cir.

1988).

3. The remaining issue is whether the district court

erred in approving the receiver's agreement to sell the

stations to Spring. The district court has wide discretion

in judging whether a receiver's sale is fair in terms and

result and serves the best interests of the estate. E.g.,

United States v. Peters, 777 F.2d 1294, 1298 n.6 (7th Cir.

1985). On review, an abuse of discretion standard governs

such judgments, although subsidiary findings of fact are

reviewed under a clearly erroneous standard and propositions

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of law are subject to de novo review. Pye v. Teamsters Local

Union No. 122, 61 F.3d 1013, 1018 (1st Cir. 1995).

In this case, the borrowers make almost a dozen

different attacks on the sale, but only a few require

discussion. The first attack, and the one most vigorously

argued, arises from the fact that the winning bidder-buyer

(Spring) was closely associated with the company (The

Zitelman Group) that until June 1994 performed specified

accounting services for the seller-receiver (Giddens). For

present purposes, we omit the details of the association and

(arguendo) treat the case as if Spring and The Zitelman Group

were one entity.

Exceptions aside, a full-fledged fiduciary, such as

trustees or a court-appointed receiver like Giddens, may not

normally sell estate property to himself even if the terms

are fair. Restatement (Second) of Trusts 170 comment b

(1959); Bogert, The Law of Trusts and Trustees 543, at 248

(rev. 2d ed. 1993); Scott & Fratcher, The Law of Trusts

170.1 (4th ed. 1987); see, e.g., Attorney General v. Flynn,

120 N.E.2d 296, 302 (Mass. 1954). The central reason is

obvious: despite the safeguard of court oversight, the main

assurance that the estate will be maximized is the zeal of

the seller to secure the best price, and that zeal is likely

to be tempered if the seller is selling to himself. Bogert,

supra. The benefits of the general ban outweigh the risk

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that, in an individual case, the receiver might otherwise be

the highest bidder.

The borrowers in this case urge that The Zitelman Group

ought to be viewed as a fiduciary. While the label is not an

exact term, see SEC v. Chenery, 318 U.S. 80, 85-86 (1943);

Restatement (Second) Torts 874 comment a (1979), we agree

with the district court that the specific accounting tasks

allotted to The Zitelman Group were narrow, mechanical, and

unrelated to the sale. The district court's findings to this

effect, 926 F. Supp. at 242-43, have not been impeached. If

The Zitelman Group had been engaged as the receiver's

financial advisor on the sale, our view might be different.

In the alternative, the borrowers urge that the general

ban on trustee buying trust property ought to extend with the

same force to anyone who is employed or engaged by the

fiduciary, as The Zitelman Group was in performing accounting

services. This is an arguable position (we ignore the

possible significance of the June resignation), and there are

a few cases that purport to support such a general ban on

those who assist a fiduciary. E.g., Donovan & Schuenke v.

Sampsell, 226 F.2d 804, 811 (9th Cir.), cert. denied, 350

U.S. 895 (1955); In re Q.P.S., Inc., 99 B.R. 843, 845 (Bankr.

W.D. Tenn. 1989).

But, as the district court showed, it is not clear that

the ban is uniformly followed even in those few jurisdictions

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that purport to adopt it. 926 F. Supp. at 244 n.64. And the

greater weight of authority is that any judgments as to

disqualification of a non-fiduciary purchaser should be made

on a case by case basis, taking account of all of the

surrounding circumstances. Id. at 244; Restatement (Second)

of Trusts 170 comment e; Bogert, supra, 543, at 254;

Scott & Fratcher, supra, 170.6; see, e.g., Burlingham v.

Worcester, 218 N.E.2d 123, 126 (Mass. 1966); Gunther v. Gove,

175 N.E. 464, 467 (Mass. 1931).

The central reason for disqualifying the fiduciary as a

buyer is that there is no one else who can similarly protect

the estate's interest. See Bogert, supra, 543, at 227-28.

But where the purchaser is merely hired by the fiduciary to

perform a discrete and narrow function unrelated to the sale,

the fiduciary's guardian role is not automatically impaired.

On the contrary, the fiduciary should still have every

incentive to refuse to sell unless the purchaser is making

the most attractive available offer. Thus, there is often

little risk that the estate will be disserved by allowing the

bid.

The general rule, by disqualifying the fiduciary as a

bidder, might in some rare case foreclose the highest bidder,

but only one such bidder is lost. If courts extend that

circle of automatic disqualification, the risk becomes

greater of harming the estate by limiting those who might

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offer the highest price. This is especially so in cases

where the universe of serious buyers is likely to be small,

as may well be the case here. And, of course, even without a

rigid rule disqualification, an objecting party is free to

argue on particular facts against a proposed sale to someone

employed by the fiduciary.

Here, the borrowers do argue that The Zitelman Group's

access to inside information did give Spring an advantage in

framing its bid. If Spring had thereby bid less than it

otherwise would have, interesting problems of remedy might

arise--for it still might not help the estate to throw out

the highest bid made to it. In all events, the district

court specifically found that the information available to

The Zitelman Group was not "confidential information or even

raw financial data," 926 F. Supp. at 243, and was effectively

available to other bidders. Id. at 233 n.22.

On appeal, the borrowers make no effort to show that the

monthly financial statements or any other information

available to The Zitelman Group gave Spring any unique

advantage over the information available to all bidders. On

the contrary, the prospective bidders were supplied with more

detailed and pertinent information than the limited data

available to The Zitelman Group for accounting purposes. 926

F. Supp. at 233 & n.23. The borrowers' brief gives us no

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reason even to suspect error on this finding, let alone clear

error.

We turn now to a quite different attack made by the

borrowers on the sale. The borrowers assert that the

receiver or his associated brokerage company, Media Venture

Partners, accepted a "bribe" from Spring by agreeing to act

as Spring's broker to buy another radio station in the

Atlantic City area. Apparently, in April 1995, at virtually

the same time that Spring submitted the winning bid in the

first round, Spring offered Media Venture Partners a

commission to secure Spring a second station in the same

city.

To describe this offer as a proven bribe is a dramatic

overstatement. Zitelman (who headed The Zitelman Group)

himself testified at a hearing that the offer of a commission

to Spring to procure a second station in Atlantic City was an

arm's length agreement unrelated (except by Spring's desire

for a duopoly) to the receiver's sale of the borrowers'

stations. The district court did not discuss the episode,

perhaps because the borrowers developed very little evidence

about it in the district court. The borrowers apparently did

not even cross-examine Zitelman on this issue.

In this court, the borrowers simply repeat their charge

that the commission was a bribe. If it were, the matter

would be very serious. But the borrowers have adduced no

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evidence that the commission was intended by Spring as a

bribe, regarded by Giddens or Media Venture Partners in that

light, or that it had any effect on the sale of the

borrowers' station. Out of an abundance of caution we have

read what can be found in the record on the subject, and it

does not alter our conclusion.

The borrowers might have argued that, as a prophylactic

matter, a receiver who is selling property should be barred

from any other dealing with the buyer in the same time frame.

A federal judge, for example, could not normally accept a

gift from a lawyer litigating a case before that judge. 5

U.S.C. 7353(a)(1) (1994); Code of Conduct for United States

Judges Canon 5(4). But the borrowers have made no effort to

offer citations or arguments for such a prophylactic rule

here; and it is certainly not self-evident that so broad a

rule would make sense in the context of ordinary business

transactions.

Finally, the borrowers offer a motley of other attacks

on the sale. These include charges that Media Venture

Partners helped Spring in "crafting" its bid by providing it

help not afforded to other bidders; that the receiver

concealed information from the court regarding bids submitted

by other bidders; that adjustments in the sales contract

between the receiver and Spring were unwarranted; that the

second and third rounds of bidding were too hasty; and that

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the sale price ultimately fixed for the stations was too low

in light of earlier appraisals.

These objections are answered in the district court's

lengthy opinion approving the sale. The objections turn on

the specific facts and the district court's opinion is

reported. In each case, we think that the district court's

discussion is sufficient and that no error occurred. In our

view, the district court and the magistrate judge have done a

very able job in handling this complex and contentious case.

Affirmed.

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