                 United States Court of Appeals
                           For the Eighth Circuit
                       ___________________________

                               No. 14-2482
                       ___________________________

 Ritchie Capital Management, L.L.C.; Ritchie Special Credit Investments, Ltd.;
Rhone Holdings II, Ltd.; Yorkville Investments I, LLC; Ritchie Capital Structure
                            Arbitrage Trading, Ltd.

                            lllllllllllllllllllllAppellants

                                          v.

 Douglas A. Kelley, in his capacity as the Chapter 11 Trustee of Petters Company,
Inc.; VICIS Capital Master Fund, Ltd.; Official Committee of Unsecured Creditors

                            lllllllllllllllllllllAppellees
                                   ____________

                    Appeal from United States District Court
                   for the District of Minnesota - Minneapolis
                                  ____________

                          Submitted: February 12, 2015
                              Filed: May 4, 2015
                                ____________

Before BYE, BEAM, and BENTON, Circuit Judges.
                           ____________

BYE, Circuit Judge.

      Ritchie Capital Management, L.L.C., and other appellants (collectively,
Ritchie) objected to an allocation of proceeds derived from a settlement between
Douglas A. Kelley, in his capacity as Chapter 11 bankruptcy trustee of Petters
Company, Inc. (PCI), and VICIS Capital Master Fund, Ltd. (VICIS). The bankruptcy
court1 overruled the objection and approved the settlement and the allocation of
proceeds. Ritchie appealed, and the district court2 affirmed. Ritchie again appeals,
alleging the bankruptcy court abused its discretion by approving the allocation. We
affirm.

                                           I

       Prior to his downfall in September 2008, Thomas Petters orchestrated a $3.65
billion Ponzi scheme. This Court has described in several of its opinions the specifics
of Petters’s scheme and the numerous resulting civil disputes. See, e.g., United States
v. Petters, 663 F.3d 375, 379-80 (8th Cir. 2011); Ritchie Capital Mgmt., L.L.C. v.
Jeffries, 653 F.3d 755, 758-60 (8th Cir. 2011); Ritchie Special Credit Invs., Ltd. v.
U.S. Trustee, 620 F.3d 847, 850-51 (8th Cir. 2010). We recite only those facts most
relevant to the instant appeal.

       Petters, in facilitating his scheme, purportedly operated a “diverting” business
primarily through PCI which purchased electronics in bulk and then resold them at
high profits to major retailers. The business, however, was a sham, and the only
influx of money came from loans or investments. Between February 1, 2008, and
May 9, 2008, Ritchie invested in Petters’s scheme, advancing approximately $189
million to PCI. In exchange for the funds, Ritchie received promissory notes. Ritchie
assigned two of its promissory notes to VICIS on February 19, 2008, with face values
totaling $25 million.



      1
       The Honorable Gregory F. Kischel, Chief Judge, United States Bankruptcy
Court for the District of Minnesota.
      2
       The Honorable Ann D. Montgomery, United States District Judge for the
District of Minnesota.

                                         -2-
       Beginning on June 13, 2008, through September 2008, PCI and Petters made
a series of nineteen payments of not less than $23,785,508 to Ritchie. Eighteen of the
payments originated from PCI, and Petters made the nineteenth payment by
withdrawing funds from his personal checking account. Ritchie used a portion of the
funds it received from PCI and Petters to pay VICIS $17,703,227.39 based upon the
assigned promissory notes. Of the amount received by VICIS, approximately 15%
($2,701,200) originated from Petters’s payment and approximately 85%
($15,002,027.39) originated from PCI.

       After Petters’s scheme ended in September 2008, a receivership was created
for Petters; PCI; Petters Group Worldwide, LLC (PGW); and other related entities.
Kelley was appointed as the receiver and thereafter petitioned for relief under Chapter
11 of the United States Bankruptcy Code on behalf of PCI and PGW in accordance
with the authority granted to him pursuant to the receivership order. The bankruptcy
court appointed Kelley as the Chapter 11 trustee for PCI and PGW in February 2009.3

       Due to the extent and impact of the fallout from Petters’s scheme, the United
States, Kelley in his positions as the trustee and the receiver, and the bankruptcy
trustee for Polaroid Corporation, one of Petters’s wholly-owned companies, entered
into a coordination agreement “to maximize recovery to victims and creditors and
minimize receivership and bankruptcy expenses . . . .” The coordination agreement
recognized there is a “significant overlap of identity” between the victims of the fraud
and the creditors of the bankruptcy estates and “competing litigation would result in



      3
       Ritchie previously filed an objection to Kelley’s dual appointments as the
trustee and the receiver based on a conflict of interest. The bankruptcy court
overruled Ritchie’s objection, finding no disabling conflict of interest which
precluded Kelley from operating as both. We affirmed the bankruptcy court in
Ritchie Special Credit Investments, Ltd. v. U.S. Trustee, 620 F.3d 847, 856 (8th Cir.
2010).

                                          -3-
the overall diminishment of the recovery for victims and creditors alike and undue
delay in the distribution of assets[.]”

       On October 10, 2010, Kelley, as the trustee, commenced an adversary
proceeding against Ritchie, VICIS, and other defendants, seeking to recover alleged
fraudulent and preferential transfers under bankruptcy and state law. VICIS and
Ritchie opposed the complaint. Kelley, as the receiver, also alleged the transfer by
Petters was fraudulent and therefore recoverable, but he had yet to commence an
action on this particular claim. Conversely, VICIS held a claim against PCI’s
bankruptcy estate to recover the amount which remained outstanding on the
promissory notes.

       After the filing of the adversary proceeding, Kelley met with VICIS to discuss
a resolution of the claims. Kelley and VICIS, along with representation for the
unsecured creditors’s committee appointed in PCI’s bankruptcy case, mediated the
dispute and reached a settlement. Pursuant to the settlement agreement, VICIS paid
$7.5 million to Kelley in return for a global release of all claims held by and against
it by either the receivership or the bankruptcy estate. The settlement agreement was
contingent on approval by both the district court overseeing the receivership and the
bankruptcy court.

       Kelley filed a verified motion to approve the settlement agreement with the
bankruptcy court on February 6, 2014. The motion indicated the settlement
agreement, among other things, resolved the disputes between Kelley, as the trustee
and the receiver, and VICIS. The motion further included an allocation of the $7.5
million received from VICIS. According to Kelley, because Petters’s payment to
VICIS constituted 15% of the overall amount received by VICIS and the bankruptcy
estate did not have a claim to these funds, Kelley intended to allocate 15% of the
funds received from VICIS to the receivership. Kelley indicated this allocation was
part of the global resolution with VICIS. The unsecured creditors’s committee

                                         -4-
supported the settlement agreement and the allocation, but Ritchie, although
supporting the settlement agreement, did not support the allocation and filed an
objection.

       The bankruptcy court held a hearing on the motion and heard argument from
Kelley, VICIS, the unsecured creditors’s committee, and Ritchie. At the conclusion
of the hearing, the bankruptcy court overruled Ritchie’s objection and approved the
settlement agreement and the allocation of the funds, finding the allocation was
reasonable because Kelley applied an objective mathematical calculation to divide the
funds, the unsecured creditors’s committee participated in the settlement process and
approved of the allocation, and the circumstances in the case dealt with complex
issues, unsettled law, and massively complicated factual disputes. The district court
overseeing the receivership also approved the settlement agreement and the
allocation.

       Ritchie elected to appeal the bankruptcy court’s order regarding the allocation
to the district court pursuant to 28 U.S.C. § 158. The district court affirmed the
allocation as reasonable, concluding the bankruptcy court properly followed the
factors found in Lambert v. Flight Transportation Corp. (In re Flight Transportation
Corp. Securities Litigation), 730 F.2d 1128, 1135 (8th Cir. 1984), Kelley as the
trustee did not have a claim to the 15% paid by Petters, multiple assurances of
trustworthiness supported the agreement although Kelley acted as the trustee and the
receiver, and the allocation did not violate the coordination agreement. Ritchie
appeals, arguing the bankruptcy court abused its discretion by approving the
allocation.

                                          II

      “We sit as a second court of review in bankruptcy matters, applying the same
standards of review as the district court . . . .” Velde v. Kirsch, 543 F.3d 469, 472

                                         -5-
(8th Cir. 2008). “A bankruptcy court’s approval of a settlement will not be set aside
unless there is plain error or abuse of discretion.” Tri-State Fin., LLC v. Lovald, 525
F.3d 649, 654 (8th Cir. 2008) (internal quotation marks omitted). “The bankruptcy
court abuses its discretion when its decision relies upon a clearly erroneous finding
of fact or fails to apply the proper legal standard.” Ritchie Special Credit Invs., Ltd,
620 F.3d at 853. A settlement, however, is not required to constitute “the best result
obtainable”; instead, the standard for evaluation “is whether the settlement is fair and
equitable and in the best interests of the estate.” Tri-State Fin., LLC, 525 F.3d at 654
(internal quotation marks omitted). The court need only ensure “the settlement does
not fall below the lowest point in the range of reasonableness.” Id. In assessing the
reasonableness of a settlement, the court considers: “‘(A) the probability of success
in the litigation; (B) the difficulties, if any to be encountered in the matter of
collection; (C) the complexity of the litigation involved, and the expense,
inconvenience and delay necessarily attending it; and (D) the paramount interest of
the creditors and a proper deference to their reasonable views in the premises.’” Id.
(alteration omitted) (quoting Protective Comm. for Indep. Stockholders of TMT
Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968)).

      Ritchie first challenges the bankruptcy court’s approval of the allocation by
contending the allocation was wholly gratuitous, providing nothing to PCI’s creditors,
and was without consideration. The settlement agreement, which contains an
integration clause, makes no mention of the allocation and provides VICIS will pay
$7.5 million to Kelley as the trustee without mentioning his position as the receiver.
When considering that the settlement agreement was fully integrated, Ritchie
maintains it was unreasonable for the bankruptcy court to approve the allocation.

      Ritchie’s argument, however, overlooks the posture of the settlement
agreement before the bankruptcy court. Prior to the settlement agreement becoming
enforceable, the bankruptcy court needed to approve the agreement. See Fed. R.
Bankr. P. 9019(a). Consequently, the integration clause found in the settlement

                                          -6-
agreement was not yet enforceable while Kelley’s motion for approval was pending
before the bankruptcy court. The settlement was also contingent on approval by the
district court overseeing the receivership. During the hearing on Kelley’s motion
before the bankruptcy court, the bankruptcy court considered the arguments presented
by the parties involved in the mediation, including Kelley, VICIS, and the unsecured
creditors’s committee. Each of these parties indicated it considered the allocation as
a part of the global resolution, which released claims held by and against VICIS for
both the bankruptcy estate and the receivership. Without the allocation, according
to the parties, settlement would not have occurred, resulting in PCI’s creditors
missing the opportunity to receive $6,375,000. Consequently, it was not an abuse of
discretion for the bankruptcy court to consider the allocation and the settlement
agreement as a single settlement. See Lurie v. Blackwell (In re Popkin & Stern), 196
F.3d 933, 938 (8th Cir. 1999) (“Several instruments constitute a single contract when
they pertain to the same transaction and when the parties intend for them to be
construed as such.”).

       Ritchie continues to maintain the district court’s reasoning was flawed because
even though Petters transferred some funds, the amount received by VICIS from PCI
totaled over $15 million, which is more than double the payment being made by
VICIS, meaning PCI could properly receive the entire $7.5 million from VICIS.
Ritchie asserts the district court erred by assuming a portion of the funds paid by
VICIS needed to be transferred to the receivership based on Petters’s transfer of
funds. Ritchie contends the receivership released any claims it had to the VICIS
funds by executing the settlement agreement.

       Ritchie’s argument again overlooks that the settlement agreement was subject
to approval by the bankruptcy court and the district court prior to it being enforceable.
Further, as previously explained, the bankruptcy court did not err by considering the
allocation as a part of the overall settlement between Kelley and VICIS, and a



                                          -7-
bankruptcy court may approve a settlement even though it may not be “the best result
obtainable.” Tri-State Fin., LLC, 525 F.3d at 654 (internal quotation marks omitted).

      Next, Ritchie argues the allocation is not in the best interests of PCI’s creditors
because Kelley was irredeemably conflicted by serving as both the trustee and the
receiver. Ritchie alleges Kelley negotiated against himself by serving in dual
capacities, representing adverse interests, and therefore called the fairness of the
arrangement into question. In support of its argument, Ritchie cites York
International Building, Inc. v. Chaney (In re York International Building, Inc.), 527
F.2d 1061, 1076 (9th Cir. 1975), In re Las Colinas, Inc., 426 F.2d 1005, 1014 (1st Cir.
1970), and Access Cardiosystems, Inc. v. Fincke (In re Access Cardiosystems, Inc.),
340 B.R. 127, 148 (Bankr. D. Mass. 2006). We disagree.

       In Ritchie Special Credit Investments, Ltd., 620 F.3d at 853-54, we considered
whether Kelley held an interest materially adverse to the bankruptcy estate because
of his appointment as receiver. We determined the bankruptcy court did not abuse
its discretion in concluding “Kelley’s role and interests as a receiver do not
predispose him towards forfeiture or amount to a disqualifying material adverse
interest.” Id. at 854. We also stated that holding an interest materially adverse to the
interest of the bankruptcy estate generally applies “only to personal interests of the
trustee, not those attributed to him in his representative or fiduciary capacity.” Id. at
853. Ritchie has failed to present any evidence Kelley had or has since developed a
personal interest adverse to the bankruptcy estate or that he is predisposed to favor
the receivership. To the contrary, Kelley applied an objective mathematical formula
to allocate the proceeds between the claims held by the receivership and the claims
held by the bankruptcy estate.

       Although Ritchie contends the receivership’s claims against VICIS were
speculative and not equal in strength to the bankruptcy estate’s claims, the bankruptcy
court considered the claims of both the receivership and the bankruptcy estate during

                                          -8-
the hearing, finding the bankruptcy estate did not have a claim to the funds provided
by Petters, and found it did not appear as though the statute of limitations had expired
on the receivership’s claims. The bankruptcy court was not required to conduct an
extensive investigation of the claims in order to approve the settlement. See Martin
v. Cox (In re Martin), 212 B.R. 316, 319 (B.A.P. 8th Cir. 1997) (“[I]t is not necessary
for a bankruptcy court to conclusively determine claims subject to a compromise, nor
must the court have all of the information necessary to resolve the factual dispute, for
by so doing, there would be no need of settlement.”).

       Ritchie next maintains there was no trustworthiness in the process utilized to
arrive at the allocation to protect creditors, and even if there was, it would not cure
Kelley’s conflict of interest. In support of its contention, Ritchie argues the allocation
was not discussed during the mediation, which resulted in only the settlement
agreement, and the unsecured creditors’s committee’s support of the agreement is
unfounded.

       First, as we previously considered, Ritchie has failed to present evidence
demonstrating Kelley’s dual appointments as the trustee and the receiver result in an
interest materially adverse to the bankruptcy estate. Second, we find Ritchie’s
arguments regarding a lack of trustworthiness not persuasive. Ritchie did not
participate in the mediation, and consequently, can only speculate as to what was
discussed.

       Additionally, the support of the unsecured creditors’s committee is noteworthy.
“Creditor Committees have the responsibility to protect the interest of the creditors;
in essence, the function of a creditors’ committee is to act as a watchdog on behalf of
the larger body of creditors which it represents.” Loop Corp. v. U.S. Trustee, 379
F.3d 511, 519 (8th Cir. 2004) (internal quotation marks omitted). The committee
participated in the mediation and indicated it supported the allocation because it is in



                                           -9-
the best interests of the unsecured creditors for the bankruptcy estate to receive a
substantial settlement in a very complex case which they may not otherwise receive.

       Ritchie’s next argument is the bankruptcy court erred because it did not have
an adequate record before it to determine whether the allocation was fair and in the
best interests of the creditors. “The sufficiency of a record underlying a decision to
approve a settlement depends on the circumstances of each case.” In re Petters Co.
v. Kelley, 455 B.R. 166, 173-74 (B.A.P. 8th Cir. 2011). “The critical inquiry on
appeal is not the quantum of evidence adduced at a hearing on a settlement, but rather
whether a bankruptcy court apprises itself ‘of all facts necessary for an intelligent and
objective opinion of the probabilities of ultimate success should the claim be
litigated[.]’” Id. (quoting Anderson, 390 U.S. at 424).

       Contrary to Ritchie’s assertion, there is no indication the bankruptcy court did
not have the facts necessary to approve the settlement. Based upon the bankruptcy
court’s extensive involvement in Petters’s cases, Kelley’s verified motion, the
settlement agreement, and the statements of Kelley, VICIS, and the unsecured
creditors’s committee, the bankruptcy court had the facts necessary to consider the
four In re Flight Transportation Corp. Securities Litigation factors and approve the
settlement. Specifically, the bankruptcy court explained the case involves “complex
issues, unsettled law, and massively complicated factual disputes,” and Ritchie’s
approach to the resolution of the claims “would entail a much larger infrastructure,
much more procedure and much more costs for the resolution of disputes” and would
“grind [the] process down to a much lower speed, make it much more expensive and
potentially drag this on for longer than it will drag on.” The bankruptcy court further
recognized the claims held by VICIS against the receivership, finding they “were
separate transfers on separate occasions from separately derived funds . . . and
involve separate legal merits,” and Kelley applied an objective mathematical formula
according to these figures. The bankruptcy court also considered the $8 million offset
claim VICIS held against the bankruptcy estate for the amount still outstanding on its

                                          -10-
promissory notes, and as a part of settlement, VICIS released its rights to the claim.
Accordingly, we find the bankruptcy court made an informed and independent
judgment of the settlement agreement and the allocation and cannot say its decision
“f[e]ll below the lowest point in the range of reasonableness.” Tri-State Fin., LLC,
525 F.3d at 654 (internal quotation marks omitted).

       Ritchie’s final challenge to the allocation is that it runs counter to the
coordination agreement which governs the relationship between the receivership and
the bankruptcy estate. Specifically, Ritchie contends the allocation violates
paragraph III.B.2 which provides any recovery based on parallel claims pursued by
Kelley as the trustee and the receiver will inure to the benefit of the bankruptcy
estate.4 Ritchie maintains the claims held by PCI and the receivership against VICIS
are parallel claims and the bankruptcy court’s position with regard to parallel claims
is untenable because the trustee and the receiver will never have overlapping claims
to the same source bank account. Ritchie further argues it does not attempt to assert
personal rights under the coordination agreement but seeks the protection of the
coordination agreement for all of PCI’s creditors.

       Assuming for the purposes of our analysis that Ritchie has standing under the
coordination agreement, when reviewing the coordination agreement de novo, see
Anderson v. Hess Corp., 649 F.3d 891, 896 (8th Cir. 2011), we do not find Ritchie’s
argument persuasive. After considering the language contained in paragraph III.B.2,
we interpret the term parallel claims to mean claims arising from the same operative
facts or the same wrongful conduct. See Wirig v. Kinney Shoe Corp., 461 N.W.2d
374, 377-79 (Minn. 1990). Although the claims pursued by Kelley as the trustee and
the receiver against VICIS are similar, they stem from separate wrongful conduct.
The trustee’s claims are derived from PCI’s conduct, while the receiver’s claims are


      4
       The bankruptcy court determined the claims were not parallel claims because
the sources of the funds which were used to make payments to VICIS were separate.

                                        -11-
based upon Petters’s conduct. Consequently, the claims are not parallel.
Additionally, Ritchie’s argument regarding the lack of a recovery from the same
source bank account overlooks the broad language included in the coordination
agreement which does not limit the variety of claims which the trustee and the
receiver can bring. In other words, merely because the circumstances of this specific
case did not result in parallel claims does not preclude parallel claims from existing
under other circumstances.

                                         III

      For the reasons provided, we affirm.
                      ______________________________




                                        -12-
