Local Rule 9019-1: SETTLEMENTS

RULE 9019-1. SETTLEMENTS

(a) Motion Requirement. Motions to approve a settlement or compromise pursuant to Fed. R. Bankr. P. 9019 and motions for leave to dismiss a complaint objecting to discharge must— (1) be filed in the bankruptcy case rather than a pending adversary proceeding; (2) identify any pending adversary proceeding being settled (in the body of the motion, not the caption); (3) state the nature of the controversy and the terms of the compromise; (4) set forth why the proposed compromise or dismissal is fair, equitable, and in the best interests of the estate; and (5) be accompanied by a proposed order granting the proposed settlement or compromise or authorizing the dismissal and approved by the movant for entry in the bankruptcy case.

(b) Service. Except as provided in the next sentence, the motion must contain a certificate evidencing service of the motion and proposed order (along with the Notice of Hearing if a hearing is set) on the debtor (or the trustee if the debtor is filing the motion), all creditors, and parties in interest, including the United States Trustee. Unless the Chapter 13 plan provides for the insurance proceeds to be paid to unsecured creditors, a motion in a Chapter 13 case to approve a compromise and settlement of a motor vehicle casualty insurance claim need be served only on the Chapter 13 trustee and creditors claiming security interests in the motor vehicle, if any.

(c) Disposition of Adversary Proceeding. On approval of the motion, the movant must either— (1) tender a separate agreed order for entry in the adversary proceeding (approved for entry by the parties to the adversary proceeding) disposing of the proceeding in accordance with the settlement; or (2) file in the adversary proceeding a notice of dismissal, stipulation of dismissal, or motion to dismiss as appropriate under Fed. R. Bankr. P. 7041 and Fed. R. Civ. P. 41.

(d) Restricting Public Access to Certain Settlements. In order to restrict confidential settlement documents from public access, the trustee or debtor must file a motion to seal in accordance with E.D. Tenn. LBR 5005-4(m) contemporaneously with the filing of the motion to approve compromise and settlement under subdivision (a) of this rule. Both motions must be set for hearing in accordance with E.D. Tenn. LBR 9013-1(f). The motion to seal must identify all documents the movant seeks to restrict from public access and set forth good cause why the extraordinary relief of restricting public access should be granted. In addition to uploading the documents sought to be sealed using the restricted access event, the movant must also upload a statement under the restricted access event specifying— (1) the full amount of the settlement; (2) any fees and expenses to be deducted from the settlement including attorney fees and costs; (3) administrative expenses proposed to be paid from the settlement including trustee fees, if any; and (4) the amount and dividend to be paid to unsecured creditors from the settlement. Unless the movant establishes at the hearing that compelling circumstances exist for protection under 11 U.S.C. § 107(b), the motion to seal will be denied. If the motion to seal is granted, public access to the sealed documents will be restricted to all parties other than the United States Trustee.