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Don Smith v. Sonya Slott
23-12522
11th Cir.
Jun 24, 2025
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Background

  • No Rust Rebar, Inc. contracted to buy a property for manufacturing, paid a non-refundable deposit, but couldn't close on the purchase.
  • No Rust assigned its purchase rights to Green Tech Development, LLC, who purchased the property, but No Rust remained in possession.
  • Litigation between No Rust and Green Tech ensued when Green Tech refused to sell the property back to No Rust; the case was later removed to bankruptcy court after No Rust filed for Chapter 11 and then converted to Chapter 7.
  • A Chapter 7 trustee, Sonya Slott, negotiated a settlement with Green Tech to resolve all disputes, including mutual releases and a procedure for selling the property and sharing proceeds.
  • The Smith Entities (Don Smith and related business entities) objected to the settlement and presented a counterproposal, but both bankruptcy and district courts approved the trustee's settlement over their objections.
  • Smith Entities appealed the approval, arguing legal and procedural errors by the bankruptcy court.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Violation of distribution scheme and sale procedures Settlement violated Bankruptcy Code provisions governing priority and sale Settlement followed proper bankruptcy processes; no specific violations shown Smith Entities forfeited argument by not explaining violation; argument rejected
Lack of full disclosure and premature approval Settlement terms weren't fully disclosed; approved before discovery completed Settlement disclosed sufficient terms; Code doesn't require discovery completed Argument abandoned due to lack of authority and inadequate briefing
Sale of property not owned by estate Bankruptcy court authorized sale of property in which estate had no interest Estate had a cognizable interest under § 541; Smith Entities previously claimed interest Argument forfeited; district court's logic accepted
Failure to approve counterproposal Bankruptcy court should have approved Smith Entities' sure-thing offer Court correctly applied "range of reasonableness" standard to approve settlement Argument abandoned; no showing of error in court’s approval

Key Cases Cited

  • In re Hoffman, 22 F.4th 1341 (11th Cir. 2022) (sets standard for appellate review in bankruptcy appeals)
  • In re Chira, 567 F.3d 1307 (11th Cir. 2009) (sets abuse of discretion standard for approving settlements in bankruptcy)
  • In re Martin, 490 F.3d 1272 (11th Cir. 2007) ("lowest point in the range of reasonableness" test for settlements)
  • In re Justice Oaks II, Ltd., 898 F.2d 1544 (11th Cir. 1990) (lists factors courts must consider in settlement approval)
  • Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678 (11th Cir. 2014) (appellate abandonment of poorly developed arguments)
  • Singh v. U.S. Att'y Gen., 561 F.3d 1275 (11th Cir. 2009) (requirements for adequate appellate briefing)
  • In re Globe Mfg. Corp., 567 F.3d 1291 (11th Cir. 2009) (further clarification on briefing and abandonment)
Read the full case

Case Details

Case Name: Don Smith v. Sonya Slott
Court Name: Court of Appeals for the Eleventh Circuit
Date Published: Jun 24, 2025
Docket Number: 23-12522
Court Abbreviation: 11th Cir.