Assadi v. Osherow ( 2022 )

Case: 22-50452 Document: 00516584612 Page: 1 Date Filed: 12/20/2022
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
No. 22-50452
Summary Calendar FILED
December 20, 2022
Lyle W. Cayce
In the Matter of Mohammed Reza Assadi, Clerk
Debtor,
Mohammad Reza Assadi, Debtor,
Appellant,
versus
Randolph N. Osherow, Trustee; Amir Batoei, Creditor,
Appellees.
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:21-CV-489
Before Jones, Haynes, and Oldham, Circuit Judges.
Per Curiam:*
Debtor Mohammed Assadi, proceeding pro se, appeals from the
district court’s review of several final orders of the bankruptcy court.
*
This opinion is not designated for publication. See 5th Cir. R. 47.5.
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Namely, Assadi argues the bankruptcy court (1) violated his due process
rights, (2) erred in granting Trustee Randolph Osherow’s motion to
compromise and settle claims with Creditor Amir Batoei, (3) erred in denying
Assadi’s motion to disqualify the bankruptcy judge, and (4) erred in
sustaining in part and denying in part Assadi’s objections to Batoei’s claims.
We have jurisdiction under 28 U.S.C. § 158(d). “When reviewing a
district court order that itself reviews a bankruptcy court order, an appellate
court applies the same standard of review as did the district court.” In re
Bodenheimer, Jones, Szwak, & Winchell LLP, 592 F.3d 664, 668 (5th Cir.
2009). So like the district court, we review the bankruptcy court’s denial of
Assadi’s recusal motion and grant of Osherow’s motion to compromise for
abuse of discretion. United States v. Anderson, 160 F.3d 231, 233 (5th Cir.
1998) (recusal motion); In re Emerald Oil Co., 807 F.2d 1234, 1239 (5th Cir.
1987) (motion to compromise). Further, we review legal conclusions de novo,
while findings of fact are reviewed for clear error. In re San Patricio Cnty.
Cmty. Action Agency, 575 F.3d 553, 557 (5th Cir. 2009).
Assadi’s first and second arguments stem from the bankruptcy court’s
order approving Osherow’s motion to compromise with Batoei pursuant to
Federal Rule of Bankruptcy Procedure 9019. Assadi claims the bankruptcy
court violated his due process rights when considering the Rule 9019 motion.
Assadi, however, had adequate notice of the Rule 9019 hearing, filed
evidence and arguments in response to Osherow’s motion, and had the
opportunity to present his arguments at the hearing. That is more than
sufficient. See In re Reagor-Dykes Motors, LP, 613 B.R. 878, 885–86 (Bankr.
N.D. Tex. 2020) (“Generally, for a party to be bound to orders issued by the
bankruptcy court, the party must receive adequate notice of the proceedings
for due process reasons. The Code provides for due process protection for
settlements under Rule 9019(a) by requiring that a debtor in possession give
creditors and parties in interest ‘adequate notice and opportunity to be heard
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before their interests may be adversely affected.’” (quotation omitted)).
Assadi also claims the bankruptcy court abused its discretion in
granting Osherow’s Rule 9019 motion instead of requiring Osherow to appeal
the state court judgment in favor of Creditor Batoei. Although the bankruptcy
judge has broad discretion to approve a settlement agreement, the agreement
must be “fair, equitable[,] and in the best interest of the estate.” In re Jackson
Brewing Co., 624 F.2d 605, 608 (5th Cir. 1980).
Five factors inform the “fair and equitable” analysis: (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, including the difficulties, if any, to
be encountered in the matter of collection; (3) the paramount
interest of the creditors and a proper deference to their
respective views; (4) the extent to which the settlement is truly
the product of arm’s-length bargaining and not fraud or
collusion; and (5) all other factors bearing on the wisdom of the
compromise.
In re Moore, 608 F.3d 253, 263 (5th Cir. 2010).
Here, the bankruptcy court’s evaluation of Assadi’s probability of
success on appeal was reasonable in light of the state’s courts consideration
of the issue, the evidence in the record, and the exacting standard of review
that would apply on appeal. The bankruptcy court also reasonably concluded
that litigation would take considerable time and effort and might result in an
increase in Batoei’s claims against the estate. Finally, the bankruptcy court
was within its discretion to conclude that the arm’s-length settlement was in
the best interest of the creditors because it “would allow the Trustee to pay
all claims against the estate in full.”
Next, Assadi claims the bankruptcy court abused its discretion when
it denied Assadi’s motion to recuse the bankruptcy judge. “Any justice,
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judge, or magistrate judge of the United States shall disqualify himself in any
proceeding in which his impartiality might reasonably be questioned.” 28
U.S.C. § 455(a); see Fed. R. Bankr. P. 5004(a) (“A bankruptcy judge
shall be governed by 28 U.S.C. § 455, and disqualified from presiding over
the proceeding or contested matter in which the disqualifying circumstances
arises[.]”). Although the bankruptcy court ruled against many of Assadi’s
motions, that by itself is insufficient to trigger § 455. Liteky v. United States,
510 U.S. 540, 555 (1994) (“Opinions formed by the judge on the basis of facts
introduced or events occurring in the course of the current proceedings, or
of prior proceedings, do not constitute a basis for a bias or partiality motion
unless they display a deep-seated favoritism or antagonism that would make
fair judgment impossible.”). Moreover, nothing in the record suggests that
the bankruptcy court treated Assadi unfairly.
Finally, Assadi argues that the bankruptcy court erred in sustaining in
part and denying in part Assadi’s objections to claims filed by Baroei. But as
the district court correctly held, Assadi abandoned this issue by inadequately
briefing it before the district court. Ramirez v. Escajeda, 921 F.3d 497, 500
(5th Cir. 2019).
AFFIRMED.
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