                                                          FILED
                                                           JUL 22 2016
                                                       SUSAN M. SPRAUL, CLERK
 1                        NOT FOR PUBLICATION            U.S. BKCY. APP. PANEL
                                                         OF THE NINTH CIRCUIT
 2
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )     BAP No.     CC-15-1117-KiKuF
                                   )
 6   MASSROCK, INC., d/b/a Lenders )     Bk. No.     2:13-bk-37648-RN
     Assurance,                    )
 7                                 )
                    Debtor.        )
 8                                 )
                                   )
 9   RONALD TAXE, Trustee of the   )
     TAXE FAMILY TRUST OF 2001,    )
10                                 )
                    Appellant,     )
11                                 )
     v.                            )     M E M O R A N D U M1
12                                 )
     DAVID M. GOODRICH, Chapter 7 )
13   Trustee,                      )
                                   )
14                  Appellee.      )
     ______________________________)
15
                    Argued and Submitted on June 23, 2016,
16                          at Pasadena, California
17                           Filed - July 22, 2016
18             Appeal from the United States Bankruptcy Court
                   for the Central District of California
19
          Honorable Richard M. Neiter, Bankruptcy Judge, Presiding
20
21   Appearances:    Douglas E. Miles argued for appellant Ronald Taxe,
                     Trustee of the Taxe Family Trust of 2001; Joseph
22                   Scott Klapach of Klapach & Klapach argued for
                     appellee David M. Goodrich, Chapter 7 Trustee.
23
24   Before:   KIRSCHER, KURTZ and FARIS, Bankruptcy Judges.
25
26
          1
27           This disposition is not appropriate for publication.
     Although it may be cited for whatever persuasive value it may
28   have, it has no precedential value. See 9th Cir. BAP Rule 8024-1.
 1        Appellant Ronald Taxe ("Taxe"), trustee of the Taxe Family
 2   Trust of 2001 ("Taxe Trust"), appeals an order approving a
 3   settlement that resolved a controversy involving disputed deeds of
 4   trust encumbering a certain commercial property.    Trustee contends
 5   that the Taxe Trust lacks standing to appeal the settlement order.
 6   We disagree, and we VACATE and REMAND the settlement order because
 7   the bankruptcy court did not make any findings for what was called
 8   a Rule 90192 motion, but also included sale terms implicating
 9   § 363.
10                 I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
11   A.   Prepetition events
12        This case involves a dispute over a commercial real property
13   located on Jefferson Boulevard in Los Angeles (the "Jefferson
14   Property").    In June 2003, certain plaintiffs who had sued Taxe
15   and his wife in state court recorded a notice of attachment
16   against the Jefferson Property.    At that time, the record owner of
17   the property was the Taxe Trust.
18        On or about July 3, 2003, debtor Massrock, Inc. ("Massrock")
19   recorded a deed of trust against the Jefferson Property, securing
20   a $400,000 promissory note.    The transaction allegedly involved
21   the sale of certain artwork owned by Massrock to the Taxes in
22   their capacities as co-trustees of the Taxe Trust.    Richard Taxe
23   ("Richard"),3 Taxe's brother, is the President, Secretary and
24
          2
25           Unless specified otherwise, all chapter,   code and rule
     references are to the Bankruptcy Code, 11 U.S.C.   §§ 101-1532, and
26   the Federal Rules of Bankruptcy Procedure, Rules   1001-9037. The
     Federal Rules of Civil Procedure are referred to   as “Civil Rules.”
27
          3
              We refer to Richard Taxe as Richard to avoid any confusion
28                                                         (continued...)

                                       -2-
 1   Chairman of the Board of Massrock.
 2        In November 2004, Taxe had an appraisal prepared for the
 3   Jefferson Property, which valued it at $750,000.
 4        On or about January 24, 2006, a deed of trust in favor of
 5   DMC, Inc. was recorded against the Jefferson Property, securing
 6   repayment of a $250,000 loan made to the Taxes as co-trustees of
 7   the Taxe Trust.   It was disputed whether the Taxes represented to
 8   DMC that the deed of trust was to be a first priority lien
 9   encumbering the Jefferson Property and whether DMC knew of the
10   existing Massrock deed of trust, which was still apparently in
11   first position but alleged to have not appeared on the title
12   report obtained by DMC.4
13        In February 2006, DMC assigned its interest in the deed of
14   trust to parties known as Goslins and Sweet ("Goslins/Sweet").
15   DMC allegedly represented to Goslins/Sweet that the assigned deed
16   of trust was a first priority lien on the Jefferson Property.
17        On December 21, 2007, the Taxes as co-trustees of the Taxe
18   Trust executed a deed of trust in favor of Dean Gulo against the
19   Jefferson Property, securing repayment of a $235,000 loan made to
20   the Taxes as co-trustees of the Taxe Trust.   Days later, Gulo
21   assigned his interest in the note and deed of trust to Lenders
22   Assurance Corporation ("Lenders"), an entity affiliated with
23   Richard and Massrock.   The Lenders’ deed of trust was recorded on
24
25
          3
           (...continued)
26   between the parties.    No disrespect is intended.
27        4
             It was also alleged that the Massrock deed of trust was
     reconveyed and no longer existed when DMC recorded its deed of
28   trust.

                                      -3-
 1   December 28, 2007.
 2        The Taxe Trust eventually defaulted on the note(s), and
 3   Massrock began foreclosure proceedings of the Jefferson Property
 4   in May 2009, recording a notice of default.     Apparently that same
 5   month, Goslins/Sweet also recorded a notice of default.    On
 6   August 7, 2009, Massrock recorded a notice of trustee's sale,
 7   stating that the Jefferson Property would be sold on September 1,
 8   2009.
 9        On August 5, 2009, Goslins/Sweet filed a complaint in state
10   court against the Taxes, the Taxe Trust and Massrock concerning
11   the validity and priority of the trust deeds against the Jefferson
12   Property.   They also recorded a lis pendens.
13        In light of the Goslins/Sweet lawsuit and competing
14   foreclosure proceedings, Massrock and Goslins/Sweet agreed that
15   Massrock would not conduct a trustee's sale before November 2,
16   2009, and in exchange Goslins/Sweet agreed to not record a notice
17   of trustee's sale until after November 2, 2009.    Despite the
18   agreement, Goslins/Sweet apparently (and allegedly inadvertently)
19   recorded a notice of trustee's sale on August 24, 2009, for a sale
20   to take place on September 17, 2009.
21        Massrock went forward with its sale of the Jefferson Property
22   on September 9, 2009, recording its trustee's deed upon sale on
23   September 11, 2009.   Massrock obtained the Jefferson Property with
24   a credit bid of $599,791.
25        The second amended complaint of Goslins/Sweet filed in May
26   2010 was dismissed in its entirety with prejudice on July 6, 2010.
27   In its ruling, the state court noted that since Massrock had
28   foreclosed on the Jefferson Property in September 2009, Massrock

                                     -4-
 1   was the owner of the Jefferson Property and the junior
 2   Goslins/Sweet lien had been extinguished.
 3        Goslins/Sweet appealed and prevailed in part.   Following
 4   remand, Goslins/Sweet filed a third amended complaint alleging
 5   claims for (1) quiet title, (2) imposition and foreclosure of an
 6   equitable lien, (3) cancellation of the trustee's deed and
 7   reconveyance of the Massrock trust deed, and (4) judicial
 8   foreclosure of the Goslins/Sweet deed of trust.
 9        Notwithstanding the Goslins/Sweet lawsuit, the disputed liens
10   and the recorded lis pendens, on October 26, 2012, Massrock
11   recorded a deed of trust in favor of the Rosen Group against the
12   Jefferson Property, securing repayment of a loan for $350,000 to
13   Massrock.   Richard allegedly represented to the Rosen Group on
14   behalf of Massrock that the Rosen Group deed of trust would be a
15   first priority lien on the Jefferson Property.
16        After a bench trial on the Goslins/Sweet third amended
17   complaint, the state court issued its tentative ruling in May
18   2013.   The court ruled, among other things:   (1) the Massrock deed
19   of trust failed for lack of consideration and was ordered
20   cancelled; (2) the Goslins/Sweet deed of trust was a valid, first
21   priority lien against the Jefferson Property; (3) the foreclosure
22   sale by Massrock was unwound and the trustee's deed upon sale set
23   aside; and (4) that the Goslins/Sweet deed of trust be foreclosed,
24   the Jefferson Property be sold, and the sale proceeds be applied
25   in payment of the amounts due to Goslins/Sweet.
26        However, before the state court's tentative ruling became the
27   final statement of decision, Goslins/Sweet, for reasons not
28   evident in the record, moved ex parte on June 17, 2013, for an

                                     -5-
 1   order dismissing their cause of action for judicial foreclosure.
 2   The application was granted and the judicial foreclosure cause of
 3   action was dismissed.
 4        The state court entered a judgment on the remaining claims on
 5   July 9, 2013 ("Judgment").   The Judgment cancelled the Massrock
 6   deed of trust finding it void ab initio, voided the Massrock
 7   foreclosure sale and trustee's deed upon sale, decreed that the
 8   Goslins/Sweet deed of trust was a first position lien, and quieted
 9   title to the Taxe Trust as of January 26, 2006, subject to the
10   Goslins/Sweet deed of trust.
11        The Taxes, the Taxe Trust and Massrock appealed the Judgment
12   in October 2013.   Defendants argued that the Massrock deed of
13   trust was not void and that it could not be cancelled as a matter
14   of law.   Goslins/Sweet were eventually awarded attorney's fees
15   against the Taxes and the Taxe Trust.
16        Subsequently, Goslins/Sweet recorded a notice of default to
17   foreclose on their $250,000 deed of trust.   The trustee's sale of
18   the Jefferson Property was scheduled for November 19, 2013.
19   B.   Postpetition events
20        One day before the Goslins/Sweet scheduled trustee's sale of
21   the Jefferson Property, Massrock filed a chapter 11 bankruptcy
22   case on November 18, 2013.   The case was later converted to
23   chapter 7; David M. Goodrich was appointed as trustee.   He
24   successfully moved to stay the pending appeal of the Judgment.
25        1.    Trustee's settlement motion
26        In January 2015, Trustee, Goslins/Sweet and First American
27   Title Insurance Company (as assignee of the Rosen Group) entered
28   into a Settlement Agreement and General Release ("Settlement

                                     -6-
 1   Agreement").   In the recitals, the Settlement Agreement noted the
 2   pending appeal of the Judgment and the parties' controversy
 3   involving disputed deeds of trust encumbering the Jefferson
 4   Property.   The parties executed a mutual release of claims.     For
 5   Massrock's part, this meant giving up its appeal of the Judgment.
 6        To fund the settlement, the parties agreed to a future sale
 7   of the Jefferson Property, with the proceeds to be paid out in the
 8   following order:   (1) costs of sale; (2) property taxes;
 9   (3) $85,000 to Trustee; (4) $250,000 in principal to
10   Goslins/Sweet, plus accrued interest, penalties, foreclosure
11   costs, and $100,000 in attorney's fees (the parties had incurred
12   over $450,000 in attorney's fees to date); (5) $85,000 to First
13   American in full satisfaction of its $350,000 lien against the
14   Jefferson Property; (6) any other valid liens on the Jefferson
15   Property; and (7) the remainder of any net proceeds to the
16   bankruptcy estate.   The Settlement Agreement also provided that
17   the sale would be free and clear of the 2007 Lenders’ deed of
18   trust, although it does not appear that Lenders, if a separate
19   entity from Massrock, was notified of the settlement or of the
20   loss of its property interest.   The proposed opening bid for the
21   Jefferson Property was to be $750,000.   However, if it sold for
22   less than $750,000, the carve out paid to Trustee would be reduced
23   to $80,000.    Finally, the Settlement Agreement provided that
24   Goslins/Sweet would prepare an application or stipulation to
25   dismiss the appeal of the Judgment by Massrock.
26        Trustee then moved for approval of the Settlement Agreement
27   under Rule 9019 ("Settlement Motion").   He noted that the proposed
28   settlement recovered at least $80,000 for the estate, and

                                      -7-
 1   depending on the final sale price of the Jefferson Property,
 2   potentially much more, without the substantial administrative
 3   costs that would accompany a protracted appeal.   Trustee contended
 4   that the hurdles to recovering property or cash for the estate
 5   absent this compromise were substantial.   He would be required to
 6   prosecute the appeal of the Judgment in light of the state court's
 7   findings that:   (1) Massrock's deed of trust failed for lack of
 8   consideration; (2) even if it had been valid, it had been
 9   reconveyed; and (3) Massrock and all others claiming under them
10   after the Goslins/Sweet deed of trust were barred and foreclosed
11   from all rights, claims, interest or equity of redemption in the
12   Jefferson Property.   Thus, because of the expense associated with
13   the appeal and Massrock's slim chance of success, Trustee believed
14   it was in the best interest of the estate's creditors to approve
15   the Settlement Agreement.   In his supporting declaration, Trustee
16   stated that the proposed settlement was made in good faith, was
17   fair and equitable and, under the circumstances, was reasonable
18   and adequate.    Trustee further stated that the settlement was
19   negotiated at arm's length by the parties through their respective
20   counsel.
21          Taxe, as co-trustee of the Taxe Trust, opposed the
22   Settlement Motion pro se.   He contended the Taxe Trust owned the
23   Jefferson Property, not Massrock, based on the Judgment which
24   cancelled Massrock's deed of trust and conclusively determined,
25   prepetition, that Massrock had no interest in the property.
26   Accordingly, argued Taxe, Trustee had no interest in the Jefferson
27   Property to sell.   Taxe objected to the sale under § 363.
28   Attached to Taxe's opposition was a copy of a recent preliminary

                                      -8-
 1   title report dated January 8, 2015, which indicated that the Taxe
 2   Trust held title and the fee interest in the Jefferson Property.
 3        In reply, Trustee refuted Taxe's argument that the Taxe Trust
 4   owned the Jefferson Property.   First, Trustee contended that Taxe
 5   was judicially estopped from now arguing that Massrock did not own
 6   the property, when he had argued in the appeal of the Judgment
 7   that the state court erred in ruling Massrock's deed of trust and
 8   foreclosure void.   Second, Trustee contended that because the
 9   Judgment, which Taxe alleged vested title to the Jefferson
10   Property in the Taxe Trust, was not final and unenforceable based
11   on the appeal, Massrock was still record owner of the property.
12   Trustee noted that had Taxe desired to have title to the Jefferson
13   Property vest in the Taxe Trust, he should have allowed the
14   Judgment to become final, but instead he kept the controversy
15   alive by appealing it.   Included with Trustee's reply was a
16   request for judicial notice (“RJN”), which contained a copy of the
17   defendants' brief filed in the appeal of the Judgment.
18        One day before the hearing on the Settlement Motion, Richard,
19   President of Massrock, filed a document stating that neither he
20   nor Taxe were served with copies of Trustee's reply and RJN.     In
21   any event, Richard attached what he contended were documents
22   proving that Massrock did not own the Jefferson Property and
23   evidencing Trustee's attempt to "hoodwink" the court.    These
24   documents included copies of Massrock's trustee's deed upon sale,
25   the Judgment and the appellate court docket.   It is not clear
26   whether the bankruptcy court knew of or reviewed Richard's filing.
27        2.   The Settlement Motion hearing and court's ruling
28        A hearing on the Settlement Motion proceeded on March 17,

                                     -9-
 1   2015.       Counsel for Trustee explained that the Settlement Motion
 2   was not a sale of the Jefferson Property, but rather only
 3   authorized Trustee to sell the property upon a proper § 363 motion
 4   to be filed.      Counsel noted that the Jefferson Property could sell
 5   for as much as $1 million, thereby creating a surplus estate and
 6   providing money to the Taxes.      Counsel for Goslins/Sweet agreed
 7   with the bankruptcy court's observation that if Massrock's
 8   foreclosure sale was deemed to be invalid, then title to the
 9   Jefferson Property would remain in the Taxe Trust.       However,
10   counsel argued that the Judgment, which could have vested title in
11   the Taxe Trust, was not final due to the pending appeal.       In any
12   event, the Taxe Trust was free to oppose the future sale motion;
13   the bankruptcy court agreed.
14        After Taxe made his arguments (Richard spoke on Taxe's behalf
15   due to illness), counsel for Trustee stood up and stated that he
16   was ready for the bankruptcy court's ruling.       Hr'g Tr. (Mar. 17,
17   2015) 28:15-16.      Upon that, the court stated, "I've ruled."     Id.
18   at 28:17.      Seemingly confused, counsel questioned whether the
19   court had in fact made its ruling, to which the court replied, "I
20   thought I had."      Id. at 28:20-24.   "I approved the settlement."5
21   Id. at 29:3.
22
             5
             The approval of the Settlement Motion may arise from the
23   court’s earlier statement:
24           THE COURT: All I’m doing is approving this compromise
             among the parties who so far – so before you and does
25           not – as Mr. Shinbrot – today is not a motion to sell
             the property. The Trustee will file a separate motion
26           to sell his right, title and interest in the property.
             At that time if the Taxe Family Trust claims it has an
27           ownership interest, it can assert it.
28   Hr’g Tr. (Mar. 17, 2015) 21:2-8.

                                         -10-
 1        Trustee's counsel was ordered to circulate his proposed order
 2   approving the Settlement Motion to all parties who appeared before
 3   submitting it to the court.    Any oppositions to the proposed order
 4   were due within one week.    Taxe filed an opposition to Trustee's
 5   proposed order on March 27, 2015, claiming he was never served
 6   with it and discovered that the bankruptcy court had entered it on
 7   March 25, 2015.   Taxe essentially reargued his opposition to the
 8   Settlement Motion, adding that Lenders, which held a deed of trust
 9   recorded in 2007, must also be a party to any proposed settlement
10   regarding the Jefferson Property.
11        On April 30, 2015, the bankruptcy court reentered an order
12   approving the Settlement Motion (the "Settlement Order").   The
13   Settlement Order provided no findings, stating only that the
14   settlement was approved.    Taxe timely appealed.
15                               II. JURISDICTION
16        The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334
17   and 157(b)(2)(A), (K) and (N).    We discuss our jurisdiction under
18   28 U.S.C. § 158 below.
19                                 III. ISSUES
20   1.   Does the Taxe Trust have standing to challenge the Settlement
21   Order?
22   2.   Did the bankruptcy court abuse its discretion in approving
23   the Settlement Motion?
24                         IV. STANDARDS OF REVIEW
25        Questions of standing are reviewed de novo.    Motor Vehicle
26   Cas. Co. v. Thorpe Insulation Co. (In re Thorpe Insulation Co.),
27   677 F.3d 869, 879 (9th Cir. 2012).
28        We review the bankruptcy court's decision to approve a

                                       -11-
 1   settlement for an abuse of discretion.      Martin v. Kane (In re A&C
 2   Props.), 784 F.2d 1377, 1380 (9th Cir. 1986); Goodwin v. Mickey
 3   Thompson Entm't Grp., Inc. (In re Mickey Thompson Entm't Grp.,
 4   Inc.), 292 B.R. 415, 420 (9th Cir. BAP 2003).     The court abuses
 5   its discretion if it applied the wrong legal standard or its
 6   findings were illogical, implausible or without support in the
 7   record.   TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820,
 8   832 (9th Cir. 2011).
 9                               V. DISCUSSION
10   A.   Taxe Trust has standing to challenge the Settlement Order.
11        Trustee contends that the Taxe Trust lacks standing to
12   challenge the Settlement Order, as it has no right to stop the
13   sale of the Jefferson Property.    Notably, Trustee did not dispute
14   standing until now.    However, because standing is a jurisdictional
15   requirement and is open to review at all stages of the litigation,
16   we must consider the issue once raised.     Nat'l Org. For Women,
17   Inc. v. Scheidler, 510 U.S. 249, 255 (1994); Ctr. for Biological
18   Diversity v. U.S. Fish & Wildlife Serv., 807 F.3d 1031, 1043 (9th
19   Cir. 2015).
20        To have standing to appeal a decision of the bankruptcy
21   court, an appellant must show that it is a "person aggrieved" who
22   was directly and adversely affected pecuniarily by an order of the
23   bankruptcy court.   Darby v. Zimmerman (In re Popp), 323 B.R. 260,
24   265 (9th Cir. BAP 2005) (internal quotation marks and citations
25   omitted).   A "person aggrieved" is someone whose interest is
26   directly affected by the bankruptcy court's order, either by a
27   diminution in property, an increase in the burdens on the
28   property, or some other detrimental effect on the rights of

                                       -12-
 1   ownership inherent in the property.    Id.   Thus, the burden is on
 2   the Taxe Trust to establish its standing for this appeal.      Ctr.
 3   for Biological Diversity, 807 F.3d at 1043.
 4        Prior to Massrock's foreclosure of its lien, the Taxe Trust
 5   owned the Jefferson Property.   After the foreclosure and prior to
 6   the Judgment, Massrock held title to the Jefferson Property
 7   pursuant to its recorded trustee's deed upon sale.    The Judgment,
 8   however, voided the foreclosure sale and Massrock's deed upon sale
 9   and quieted title in the Taxe Trust, subject to the Goslins/Sweet
10   lien.   If the Judgment had not been appealed, title would have
11   once again vested in the Taxe Trust.    However, because the
12   Judgment was appealed and still pending at the time of the
13   Settlement Motion, title to the Jefferson Property remained in
14   Massrock; the Taxe Trust could not avail itself of the
15   adjudication to establish its rights in the property.    Smith v.
16   Smith, 134 Cal. 117, 119 (1901) (one cannot avail himself of an
17   adjudication establishing a right while the judgment is suspended
18   by an appeal); Nathanson v. Hecker, 99 Cal. App. 4th 1158, 1163
19   n.1 (2002) (California orders and judgments are not final so long
20   as an appeal is pending).   See also Cal. Code Civ. Proc. § 1049
21   ("An action is deemed to be pending from the time of its
22   commencement until its final determination upon appeal, or until
23   the time for appeal has passed, unless the judgment is sooner
24   satisfied.").
25        The Taxe Trust contends that it has standing to challenge the
26   Settlement Order because it is the current titleholder to the
27   Jefferson Property and a sale would eliminate its ownership
28   rights.   The "evidence" the Taxe Trust submitted to show that it

                                     -13-
 1   holds legal title to the Jefferson Property was a preliminary
 2   title report from January 2015.    However, two problems exist.   The
 3   title report, by itself, was not admissible evidence, and
 4   secondly, under California law, preliminary title reports have
 5   very limited, if any, value as to how title to real property is
 6   actually held:
 7        Since 1982, the Insurance Code has limited the
          significance of such preliminary reports. (Southland
 8        Title Corp. v. Superior Court (1991) 231 Cal. App. 3d
          530, 537, 282 Cal. Rptr. 425; see White v. Western Title
 9        Ins. Co. (1985) 40 Cal.3d 870, 884, 221 Cal. Rptr. 509,
          710 P.2d 309.) A preliminary title report is an offer
10        "to issue a title policy subject to the stated exceptions
          set forth" therein.     (Ins. Code, § 12340.11.)     "The
11        reports are not abstracts of title" and "shall not be
          construed as, nor constitute, a representation as to the
12        condition of title to real property . . . ." (Ibid.) An
          "[a]bstract of title" is a written listing of "all
13        recorded conveyances" affecting "the chain of title to
          the realty property described therein."      (Ins. Code,
14        § 12340.10.) The intent of these statutes is to relieve
          title insurers from liability as title abstractors for
15        the negligent preparation of preliminary title reports.
          (Cf. Southland Title Corp. v. Superior Court, supra,
16        231 Cal. App. 3d 530, 537-538, 282 Cal. Rptr. 425.)
          These statutes do not make such reports meaningless. The
17        reports serve to apprise the prospective insured of the
          state of title against which the insurer is willing to
18        issue a title insurance policy. (Ibid.)
19   Alfaro v. Cmty. Hous. Imp. Sys. & Planning Ass'n, Inc., 171 Cal.
20   App. 4th 1356, 1389 (2009), as modified on denial of reh'g
21   (Mar. 18, 2009).
22        Nonetheless, the Taxe Trust has standing.   Under the
23   Settlement Agreement, the parties agreed that the appeal of the
24   Judgment, at least with respect to Massrock, would be dismissed.
25   That still leaves the Taxe Trust, a nondebtor over which Trustee
26   has no control, a party in the pending appeal.   The Taxe Trust
27   could either pursue the appeal against Goslins/Sweet or choose to
28   dismiss it.   If the appeal is dismissed or the Judgment is

                                       -14-
 1   affirmed, then title to the Jefferson Property would again vest in
 2   the Taxe Trust.   And, contrary to Trustee's argument,
 3   Goslins/Sweet do not have the absolute right to sell the property;
 4   they gave up that right (at least temporarily) once they dismissed
 5   their judicial foreclosure cause of action.    As for any
 6   nonjudicial foreclosure right, the notices issued by Goslins/Sweet
 7   in 2013 are stale.    They would need to follow California law with
 8   proper notice to the owner of the Jefferson Property, which may be
 9   the Taxe Trust if the pending state court appeal is dismissed or
10   affirmed.   Thus, it appears that the Taxe Trust has at least some
11   interest at stake here; the Settlement Agreement essentially wrote
12   out and ignored any potential interest it may have.    This failure
13   to consider any interest by the Taxe Trust would certainly make it
14   an "aggrieved" party.
15        Although Trustee contends that the Taxe Trust can raise any
16   objections it has to the sale of the Jefferson Property when the
17   § 363 motion is filed, the approved Settlement Agreement already
18   contains many of the sale terms — i.e., price, priority of liens,
19   selling free and clear of Lenders' deed of trust, and distribution
20   rights — and it has essentially determined that Massrock owns the
21   Jefferson Property, without the benefit of an adversary proceeding
22   to conclusively determine the disputed fee interest.     In re Popp,
23   323 B.R. at 268-69.   So, it is not apparent what the Taxe Trust
24   would be able to argue once the forthcoming sale motion is filed.
25        Accordingly, on this record, we conclude that the Taxe Trust
26   has standing to appeal the Settlement Order.    Having established
27   our jurisdiction, we now turn to the merits of the appeal.
28   / / /

                                      -15-
 1   B.    The bankruptcy court failed to make any findings and
           conclusions to support approval of the Settlement Motion.
 2
 3         1.    Compromises under Rule 9019
 4         Rule 9019(a) authorizes the bankruptcy court to approve a
 5   compromise or settlement upon a motion of the trustee and after a
 6   hearing on twenty-one days' notice to all creditors and the
 7   U.S. Trustee.   See Rule 2002(a)(3).     Compromises are favored in
 8   bankruptcy because they avoid the expenses and burdens associated
 9   with litigation.    In re A&C Props., 784 F.2d at 1381.   Therefore,
10   the bankruptcy court has "great latitude" in approving compromises
11   and settlements.    Woodson v. Fireman's Fund Ins. Co.
12   (In re Woodson), 839 F.2d 610, 620 (9th Cir. 1988).      Nevertheless,
13   the court may only approve a compromise if it is satisfied that
14   its terms are "fair, reasonable and equitable."     In re A&C Props.,
15   784 F.2d at 1381.
16         To determine whether a settlement is fair and reasonable, the
17   bankruptcy court must consider:
18         (a) the probability of success in the litigation;
19         (b) the difficulties, if any, to be encountered in the matter
           of collection;
20
           (c) the complexity of the litigation involved, and the
21         expense, inconvenience and delay necessarily attending it;
           and
22
           (d) the paramount interest of the creditors and a proper
23         deference to their reasonable views in the premises.
24   Id.   Trustee, as the party proposing the settlement, had the
25   burden of demonstrating it was fair, reasonable and equitable.
26   Id.
27         2.   Analysis
28         Trustee contends that the bankruptcy court, "after weighing

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 1   the relevant facts," "properly concluded that the trustee's
 2   settlement was 'fair and equitable' to the estate's creditors and
 3   would 'be in the best interests of the estate.'"   Nothing could be
 4   further from the truth.
 5        When opposed, a motion to compromise a controversy under
 6   Rule 9019 is subject to the provisions governing contested matters
 7   set forth in Rule 9014.   10 Collier on Bankruptcy ¶ 9019.01
 8   (Alan N. Resnick & Henry J. Sommer, eds., 16th ed. 2012).   As a
 9   contested matter, the bankruptcy court was required to make
10   findings of fact, either orally on the record or in a written
11   decision.   See Rule 9014(c) (incorporating Rule 7052, which in
12   turn incorporates Civil Rule 52).   The findings must be sufficient
13   to indicate the factual basis for the court's ultimate conclusion.
14   Unt v. Aerospace Corp., 765 F.2d 1440, 1444 (9th Cir. 1985).
15        "'The findings must be explicit enough to give the appellate
16   court a clear understanding of the basis of the trial court's
17   decision, and to enable it to determine the ground on which the
18   trial court reached its decision.'"    Mattel, Inc. v. Walking
19   Mountain Prods., 353 F.3d 792, 815 (9th Cir. 2003) (quoting Unt,
20   765 F.2d at 1444).   In the absence of complete findings, we may
21   vacate a judgment and remand to the bankruptcy court to make the
22   required findings.   See United States v. Ameline, 409 F.3d 1073
23   (9th Cir. 2005).
24        The bankruptcy court did not make any findings, either orally
25   or in the Settlement Order, indicating the factual bases it
26   believed supported each (or any) of the A&C Properties’ factors.
27   It failed to even reference A&C Properties or conclude that the
28   settlement was "fair and equitable."   When it came time for the

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 1   ruling at the hearing, the court spoke in the past tense, saying
 2   that it thought it had approved the settlement.   This implies that
 3   findings were provided either before or at the hearing.   However,
 4   careful review of the record and transcript establishes that no
 5   such findings were made at anytime during the hearing or in any
 6   tentative ruling.    Thus, we have no ability to provide any
 7   meaningful review.
 8        Given the state of the record, we must conclude that the
 9   bankruptcy court erred by failing to make findings evidencing
10   consideration of the A&C Properties’ factors.   In addition, the
11   Settlement Agreement included sale terms that went beyond a true
12   settlement under Rule 9019 and implicated § 363, for which no
13   findings were made.   See In re Mickey Thompson Entm't Grp., Inc.,
14   292 B.R. at 421-22.
15        We cannot say whether the record would support the requisite
16   findings.   The settlement calls for the dismissal of an appeal,
17   even though one of the appellants (Taxe Trust) is not a party to
18   the settlement, and the sale of property which the estate may or
19   may not own.   Thus, it is not clear that the settlement can even
20   be implemented.   The bankruptcy court should consider in the first
21   instance whether such a settlement is in the best interests of the
22   estate and whether it is appropriate to consider the settlement
23   apart from a proposed sale of the Jefferson Property.
24        We understand and sympathize with the predicament of the
25   Trustee and the settling parties.   The Taxes are willing to go to
26   great lengths to block any sale of the Jefferson Property:
27   according to the superior court, they concocted the Massrock deed
28   of trust, presumably to stymie a creditor’s effort to foreclose

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 1   its lien against the property; and they are unashamed to reverse
 2   their long-held position that the Massrock deed of trust is valid.
 3   Thus, we understand the impulse to “settle around” the Taxes.
 4   Further, the Trustee makes a persuasive argument that, if it could
 5   be consummated, the settlement transactions would be highly
 6   advantageous to the estate.   We simply cannot say, however,
 7   whether the settlement can be implemented and whether it is in the
 8   estate’s best interest considering the barriers to its
 9   implementation.
10        Thus, the court abused its discretion in approving the
11   Settlement Motion.   As such, we VACATE the Settlement Order and
12   REMAND for further proceedings consistent with this decision.6
13                              VI. CONCLUSION
14        For the foregoing reasons, we VACATE and REMAND.7
15
16
17
18
19
20
21        6
             It seems the better course would be to have all issues
     heard at once, including the disputed ownership interest of the
22   Jefferson Property.
23        7
             In support of the Taxe Trust's reply brief, Taxe offered a
     declaration. Some of what he asserts is already in the record,
24   some is not. Trustee has moved to strike the Taxe declaration.
     Generally, an appellate court will not consider facts outside the
25   record developed before the trial court. U.S. ex. rel. Robinson
     Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248
26   (9th Cir. 1992). Because Taxe seeks to present new testimony on
     appeal that was not before the bankruptcy court, we GRANT
27   Trustee's motion to strike and will not consider the Taxe
     declaration. Even if we did consider it, however, it would not
28   change the outcome of this appeal.

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