Order Approving Settlement Agreement

Summary

This template proposed order is for use by a Chapter 11 debtor in possession filing a motion to approve a settlement and can be modified for use by other parties. This template includes practical guidance, drafting notes, and alternate and optional clauses. This template proposed order may be filed with a Bankruptcy Rule 9019 motion. The local bankruptcy rules in some jurisdictions require that a proposed order be filed and served with the motion. Bankruptcy Rule 9019 provides that the court, after notice and a hearing, may approve a compromise or settlement. Counsel should check the case law and local rules/practices in the debtor's jurisdiction to determine which statutes should be referenced in the order with Bankruptcy Rule 9019 (or whether the rule alone should be cited). Note that some settlements may be straightforward settlements of claims, whether brought by or against the estate. Others may involve complex settlements, particularly if multiple defendants or significant transactions are involved, such as settlements concerning sale transactions. Regardless of the complexity, the order should be as clear and unambiguous as possible. This template contains typical provisions that may be found in most orders approving settlements. The template also includes several optional and alternate paragraphs that contain sample language that is only appropriate when settling specific matters (such as claim objections). When using these optional and alternate paragraphs, remember additional provisions may be necessary or appropriate to implement the settlement. Settlement approval orders should be tailored to the facts and circumstances of the case and the matters being resolved. Counsel should carefully review the settlement agreement when preparing the proposed order. If possible, counsel should endeavor to use the same defined terms that are in the settlement agreement. If this template defines something differently than the settlement agreement, conform this template to the term as defined in the settlement agreement. Counsel should check to see whether the settlement agreement requires that the proposed order (or the entered order) contain certain provisions or if some provisions are as a legal or practical matter needed. Further, the settlement may require the settling party to agree to the proposed order. For example, the proposed form of order may be an exhibit to the settlement agreement or the settlement may be conditioned on the proposed order being satisfactory to the settling party. For a full listing of key content that provides an overview of important topics when litigating disputes in bankruptcy cases, see Bankruptcy Litigation Resource Kit For related content for government attorneys who practice in bankruptcy, see Government Attorneys Bankruptcy Resource Kit. For more information on settlements in bankruptcy, see Rule 9019 Settlement Agreements and Settlement Agreements in Bankruptcy. For a template motion to approve a settlement agreement, see Rule 9019 Motion to Approve Settlement.