Law Enforcement Officers Security Union

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
IN RE: 	)
)
LAW ENFORCEMENT OFFICERS 	) 	Case No. 24-70277-JAD
SECURITY UNION, 	) 	Chapter 7
) 	Related to ECF No. 115
Debtor. 	)
__________________________________ 	X
)
UNITED FEDERATION LEOS- 	)
PBA, et al., 	)
)
Movants, 	)
)
-v- 	)
)
ERIC E. BONONI, TRUSTEE, 	)
)
Respondent. 	)
__________________________________ 	)
MEMORANDUM OPINION
The matter before the Court is a Motion to Enforce Settlement filed by
certain 	non-debtor 	parties 	(collectively, 	the 	“Movants”), 	seeking 	an 	order
compelling the Chapter 7 Trustee to consummate a settlement (the “Settlement
Agreement”) reached during mediation, notwithstanding that the settlement has
not been approved by this Court pursuant to Federal Rule of Bankruptcy
Procedure 9019 and 11 U.S.C. § 363(b)(1). See Motion to Enforce Settlement ¶¶
16–20, ECF No. 115. The Motion to Enforce Settlement fails as a matter of law.
The Bankruptcy Code is not ambiguous on this point, nor is the controlling
precedent 	of 	the 	United 	States 	Court 	of 	Appeals 	for 	the 	Third 	Circuit. 	A
FILED
CLERK
U.S. BANKRUPTCY
COURT - WDPA
12/17/25 3:11 pm
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bankruptcy trustee lacks authority to consummate, and a bankruptcy court
lacks authority to compel, the enforcement of a settlement disposing of estate
property 	outside 	the 	ordinary 	course 	of 	business 	absent 	court 	approval.
Whatever equitable appeal the Movants’ request may have, it finds no support in
the statute Congress enacted or in the cases interpreting it.
I.
JURISDICTION AND BACKGROUND
This Court has jurisdiction under 28 U.S.C. § 1334 and authority to enter
a 	final 	order 	under 	28 	U.S.C. 	§ 	157(b)(2). 	Venue 	is 	proper. 	The 	Debtor
commenced this Chapter 7 case on July 8, 2024. Motion to Enforce Settlement ¶
4, ECF No. 115. The Chapter 7 Trustee was appointed shortly thereafter. Id. ¶ 5.
Following court-ordered mediation conducted in September 2025, the
Trustee 	and 	certain 	non-debtor 	parties 	negotiated 	a 	proposed 	Settlement
Agreement resolving alleged estate causes of action. Id. ¶¶ 6–13. On October 7,
2025, the Trustee filed a motion seeking approval of the settlement pursuant to
Federal Rule of Bankruptcy Procedure 9019. Id. ¶ 13. Before that motion was
adjudicated, the Movants filed the present Motion to Enforce Settlement.
The 	Settlement 	Agreement 	itself 	expressly 	provides 	that 	it 	becomes
“effective and binding” only upon entry of a final order of the Bankruptcy Court
approving 	the 	settlement 	and 	conditions 	performance 	on that 	same 	event.
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Settlement Agreement ¶ 10, Ex. A to Motion to Enforce Settlement, ECF No. 115.1
No such order has been entered.
II.
DISCUSSION
A.
The Plain Language of the Code Forecloses Relief
Analysis begins, and in this case ends, with the text of the Bankruptcy
Code. Section 363(b)(1) provides that a trustee “may use, sell, or lease, other
than in the ordinary course of business, property of the estate” only “after notice
and a hearing.” 11 U.S.C. § 363(b)(1). The Code does not say “after negotiation,”
“after mediation,” or “after execution of an agreement.” It says “after notice and
a hearing.” Courts are not free to revise that sequence.
Estate causes of action are property of the estate. 11 U.S.C. § 541(a). A
trustee’s agreement to settle such claims is a disposition of that property. That
proposition is not debatable in this Circuit.
In Northview Motors, Inc. v. Chrysler Motors Corp., 186 F.3d 346 (3d Cir.
1999), the Third Circuit Court of Appeals held that agreeing to settle a lawsuit
constitutes a sale of a claim, which is property of the estate, and therefore falls
squarely within § 363(b)(1). Id. at 350. The court further held that a contract
1 The Motion to Enforce Settlement gives the Court some pause in light of the fact that the Settlement Agreement is
plainly not effective absent entry of an order approving the settlement, which has not occurred. The Court’s pause is
heightened by the absence in the motion of any discussion of binding Third Circuit precedent holding that a trustee’s
settlement of estate claims is unenforceable absent bankruptcy court approval. See In re Northview Motors, Inc. v.
Chrysler Motors Corp., 186 F.3d 346, 350–51 (3d Cir. 1999).
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providing for the use or sale of estate property outside the regular course of
business is unenforceable absent court approval. Id.
That holding is categorical. It does not turn on the parties’ intent, the
fairness of the bargain, the presence of mediation, or the inconvenience of delay.
Nor does it yield to policy arguments favoring settlement.
Indeed, 	the 	Third 	Circuit 	squarely 	rejected 	enforcement 	under 	these
circumstances, holding that even assuming a settlement were effective upon
execution, a trustee cannot be compelled to consummate the settlement absent
bankruptcy court approval. Id. at 350-51.
B.
The Plain Language of the Settlement Agreement Forecloses Relief
Even if the Code and controlling precedent were silent, the Settlement
Agreement would still defeat the Movants’ request. The Agreement conditions its
effectiveness and performance on entry of a final order approving the settlement.
Settlement 	Agreement 	¶10; 	see 	also 	id. 	¶¶1,17 	(which 	have 	conditions 	of
bankruptcy court approval as well). Conditions, whether they be precedent or
subsequent, mean what they say. Until satisfied, no enforceable obligation
arises. Courts do not enforce contracts that the parties themselves have declared
non-operative.
C.
A Request to Enforce an Un-Approved Settlement
Fails for Lack of Ripeness
The Motion also suffers from a more fundamental defect: it is not ripe.
Ripeness is a justiciability doctrine designed “to prevent the courts, through
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premature adjudication, from entangling themselves in abstract disagreements.”
Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580, 105 S.Ct. 3325,
87 L.Ed.2d 409 (1985) (internal quotation omitted). “Ripeness becomes an issue
when a case is anchored in future events that may not occur as anticipated, or
at all.” Nat'l Rifle Ass'n of Am. v. Magaw, 132 F.3d 272, 294 (1997).
The enforceability of a settlement expressly conditioned on court approval
is, by definition, contingent on an event that has not occurred. Until the Court
rules on the pending Rule 9019 motion, there is no present controversy over
enforcement. There is only a request that the Court skip a statutory step. That
the Court may not do.
D.
The Cases Cited by Movants Have No Application Sub Judice
and There is No Such Thing as a “Mediation Exception”
The Court has reviewed the Motion to Enforce Settlement in its entirety,
including 	all 	authorities 	cited. 	None 	authorizes 	consummation 	or 	specific
performance of a trustee’s unapproved settlement.
In re Turner, 274 B.R. 675 (Bankr. W.D. Pa. 2002), is not to the contrary.
Turner did not involve an effort to compel consummation of a settlement prior to
bankruptcy court approval. Rather, Turner addressed a distinct and narrower
question: whether a non-estate party may withdraw or revoke a settlement offer
after it has been accepted by a Chapter 7 trustee subject to court approval and
which was promptly presented to the court for review. Turner correctly answered
that question in the negative, holding that once the trustee accepts an offer—
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subject only to bankruptcy court approval—the non-estate party is precluded
from unilaterally withdrawing the agreement while the approval process is
pending. Id. at 676–81. In that sense, Turner operates as an estoppel doctrine,
holding parties in place long enough for the court to exercise its statutory role
under Rule 9019.
Critically, however, Turner did not hold (and expressly could not hold) that
a bankruptcy court may compel performance or consummation of a settlement
prior to approval under 11 U.S.C. § 363(b)(1). To the contrary, Turner expressly
recognized that the trustee’s authority to settle estate claims is subject only to
bankruptcy court approval. Id. at 679. Thus, Turner preserves the Court’s
gatekeeping role while preventing opportunistic withdrawal; it does not eliminate
the requirement of approval or authorize enforcement in advance of it.
Likewise, 	cases 	applying 	state 	contract 	law 	principles 	or 	enforcing
settlements outside bankruptcy are beside the point. Federal bankruptcy law,
not state contract doctrine, governs the scope of a trustee’s authority to dispose
of estate property. In re Northview Motors, Inc., 186 F.3d at 350–51. Nor does
the fact that the agreement was reached during court-ordered mediation alter
the analysis. Mediation is a procedural aid, not a statutory substitute. Nothing
in Rule 9019 or § 363 creates a “mediation exception.”
E.
The Trustee Has a Continuing Fiduciary Duty
The Court adds one final observation. A Chapter 7 trustee is a fiduciary of
the estate and its creditors. Commodity Futures Trading Comm’n v. Weintraub,
471 U.S. 343, 355 (1985). That fiduciary duty is continuing. The filing of a Rule
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9019 motion does not freeze the trustee’s judgment in time. If, after execution of
a proposed settlement, the trustee obtains additional information, whether from
third 	parties 	or 	further 	investigation, 	bearing 	on 	whether 	the 	compromise
remains in the best interests of the estate, the trustee has both the authority
and the duty to advise the Court. Rule 9019 presupposes informed judicial
review, not ritualized approval.
F.
No Hearing is Required on the Motion to Enforce
and the Remaining Procedural Requests Shall be Denied
The dispositive issues presented by the Motion to Enforce Settlement are
purely legal, controlled by unambiguous statutory text and binding appellate
precedent. No further hearing is required because, in rendering this decision,
the Court has presumed that the facts pled by the Movants are true and the
Court has fully considered the arguments presented. See 11 U.S.C. § 102(1); See
e.g. Cabral v. Shamban (In re Cabral), 285 B.R. 563, 576-77 (B.A.P. 1st Cir.
2002)(the bankruptcy court is authorized to determine contested matters on the
pleadings and arguments of the parties, drawing necessary inferences from the
record). The self-scheduled hearing on the Motion to Enforce Settlement shall
therefore be cancelled.
The Movants also ask the Court to deny any future continuances of the
Rule 9019 hearing on the Settlement Agreement. The Court will not enter a
blanket prospective order eliminating the Court’s discretion to manage its docket
in light of future events not yet known. Accordingly, this request shall be denied.
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III
CONCLUSION
For the reasons stated, the Motion to Enforce Settlement must be denied.
The Bankruptcy Code requires that a trustee’s proposed settlement of estate
claims outside the ordinary course be approved by the Court before it may be
enforced 	or 	consummated, 	and 	the 	Settlement 	Agreement 	here 	expressly
conditions its effectiveness on such approval.
While parties to a settlement accepted by a trustee subject to court
approval may be held in place during the pendency of the approval process and
may not unilaterally withdraw or revoke their assent, that interim restraint does
not 	render 	the 	settlement 	enforceable 	or 	authorize 	the 	Court 	to 	compel
performance before approval. The purpose of maintaining the status quo is to
preserve the Court’s ability to conduct the review required by Rule 9019 and not
to bypass it.
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Until the Court either approves or denies the Settlement Agreement, the
parties remain bound to await that determination, but no party may compel
consummation. Accordingly, because the Settlement Agreement has not been
approved, the Motion to Enforce Settlement is denied in its entirety.
Date: 	December 17, 2025 	__________________________________________
The Honorable Jeffery A. Deller
United States Bankruptcy Judge
CASE ADMINISTRATOR TO SERVE:
Kirk Burkley, Esquire, counsel to the movants
Eric Bononi, Esquire, Chapter 7 Trustee
Scott Hare, Esquire, counsel to the Trustee
Brendan G. Best, Esquire, counsel to certain parties-in-interest
Maribeth Thomas, Esquire, counsel to certain parties-in-interest
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