  MEMORANDUM DECISION ON MOTIONS FOR ABANDONMENT AND TO APPROVE SETTLEMENT- 5  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  On February 17, 2017, the Trustee filed the Motion to Approve Settlement with the Bank  regarding an agreed formula for a carve-out from the sale of the Properties. Under the  proposed Settlement, the Estate will receive 25% of the net proceeds from the sale of each  property or $15,000 from the proceeds, whichever is greater, with the remaining proceeds to  go to the Bank. In the case of the Residence, the Settlement may also require that the Debtor  receive a portion of the funds for his homestead exemption.4 See Settlement Agreement and  Release, attached to Budsberg Decl., ECF No. 49-1. In calculating the Estate’s possible  recovery, the Trustee uses property values higher than those set forth by the Debtor, based  on apparent discussions with a real estate broker. The Trustee did not provide a declaration in  regard to such value. From the Trustee’s asserted values, he deducts only the mortgage  balances in order to arrive at the Estate’s estimated recovery. The Trustee represents that  there would be no tax consequences for the sale of the Residence, and as to the other two  properties, the Trustee stated he has yet to receive tax information from the Debtor or Ms.  Eutenier. The Trustee also calculates the Estate’s estimated recovery based on both  ownership scenarios: community property or only 50% ownership. Utilizing the test to approve  compromises set forth in In re A & C Props., 784 F.2d 1377, 1381 (9th Cir. 1986), the Trustee  argues that under either ownership scenario, the Agreement with the Bank would be in the  best interest of the unsecured creditors and the Estate.  In his response, the Debtor does not oppose the carve-out generally but instead  disputes the Trustee’s math. The Debtor notes that the Trustee fails to deduct the costs of sale,  the homestead for the Residence, and capital gains for the investment properties. The Debtor   4 The Trustee has objected to Debtor’s claimed exemptions but this Order does not address any issues concerning distribution of the proceeds other than as between the Trustee and the Bank.  Case 16-43505-MJH Doc 58 Filed 03/24/17 Ent. 03/24/17 14:33:04 Pg. 5 of 15

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