If the Plan Proponents present evidence that substantive consolidation is appropriate under applicable law, this would permit confirmation of the Plan under either view of § 1129(a)(10). See, e.g., In re Woodbridge Grp. of Cos., LLC, 592 B.R. 761, 775-76, 778 (Bankr. D. Del. 2018). If the evidence at confirmation does not support a finding that substantive consolidation would be appropriate under applicable law outside of the confirmation process, with some reservation and subject to the evidence presented, I will apply the "per plan" approach to evaluate compliance with § 1129(a)(10).
See, e.g. , Gardner v. New Jersey , 329 U.S. 565, 581, 67 S.Ct. 467, 91 L.Ed. 504 (1947) (Douglas, J.) (observing that "one useful and fitting function of a reorganization court was the compromise or settlement of claims, so that interminable litigation might be ended and the interests of expedition in promulgating a plan of reorganization served"); Grp. of Inst. Invs. v. Chicago, M., St. P. & P. R. Co. , 318 U.S. 523, 565, 63 S.Ct. 727, 87 L.Ed. 959 (1943) (Douglas, J.) ("[C]ompromises, settlements, and concessions are a normal part of the reorganization process.").See, e.g. , NCA Inv'rs Liquidating Trust v. Berkowitz, Trager & Trager, LLC (In re Seaboard Hotel Mbr. Assocs., LLC) , 2021 Bankr. LEXIS 1564, at *9-11 (Bankr. D. Del. June 10, 2021); In re Woodbridge Grp. of Cos., LLC , 592 B.R. 761, 771-73 (Bankr. D. Del. 2018) ; In re Idearc, Inc. , 423 B.R. 138, 150-52 (Bankr. N.D. Tex. 2009). Finally, and in contrast to the ends discussed above, the bankruptcy plan process remains subject to abuse.
Thus, chapter 11 plans can propose settlements that should be evaluated using the same factors applicable to any proposed settlement in bankruptcy.See, e.g. , In re Woodbridge Grp. of Cos., LLC , 592 B.R. 761, 772 (Bankr. D. Del. 2018) ("A bankruptcy court may approve settlements under Bankruptcy Rule 9019 or as part of a debtor's plan. The standards for approving settlements under Rule 9019 or as part of a plan are the same.
Lack of sufficient funding is a rational basis to decline to pursue claims or to pursue settlement of claims in lieu of litigation. See generally, Hyundai Translead, Inc. v. Jackson Truck & Trailer Repair, Inc. (In re Trailer Source, Inc.), 555 F.3d 231, 244 (6th Cir. 2009); In re Woodbridge Grp. of Cos., LLC, 592 B.R. 761, 774 (Bankr. D. Del. 2018). Thus, rather than further Aviva's allegations of bad faith, the fact that the Liquidators lack the funding to pursue the Claims instead indicates that there may be a rational basis to pursue settlement.
S.D.N.Y. 2015) ("Courts analyze settlements under section 1123 by applying the same standard applied under Rule 9019 of the Bankruptcy Rules, which permits a court to ‘approve a compromise or settlement.’ ") (citation omitted); In re Woodbridge Grp. of Cos. , 592 B.R. 761, 772 (Bankr. D. Del. 2018) (noting bankruptcy courts may approve settlements under Bankruptcy Rule 9019 or as part of a debtor's plan and that the standards are the same) (citing inter alia sections 1123(b)(3)(A) and 1123(b)(6) ); In re G-I Holdings Inc. , 420 B.R. 216, 256 (D.N.J. 2009) ("[T]the Plan by its terms is a motion for approval of the Global Settlement." (citing In re Texaco , 84 B.R. at 901 )).