“Below the Lowest Point”: The Eleventh Circuit’s Robust Re-affirmation of the Justice Oaks Settlement Standard and the Forfeiture Doctrine in Don Smith v. Sonya Salkin Slott

Introduction

The decision in Don Smith v. Sonya Salkin Slott, No. 23-12522 (11th Cir. June 24, 2025) arises from a bitter dispute over the ownership of industrial property formerly used by No Rust Rebar, Inc.—a company that evolved from Chapter 11 reorganization to Chapter 7 liquidation. The “Smith Entities” (Don Smith and three affiliated companies) challenged approval of a global settlement negotiated by the Chapter 7 trustee, Sonya Salkin Slott (“the Trustee”), and Green Tech Development, LLC (“Green Tech”), the estate’s largest secured–unsecured creditor. Both the bankruptcy court and the district court had blessed the settlement; the Eleventh Circuit, sitting in a non-argument calendar, has now affirmed.

Although the opinion is unpublished, it forcefully restates two core principles:

The Justice Oaks II “range of reasonableness” test governs approval of bankruptcy settlements, reviewed on appeal only for abuse of discretion.
Issues raised “perfunctorily” or without legal development on appeal are forfeited (Sapuppo line of authority).

The case therefore serves as a cautionary tale for litigants in bankruptcy appeals and a practical roadmap for trustees negotiating complex, multi-party settlements.

Summary of the Judgment

The Eleventh Circuit affirmed without alteration the orders of both lower courts. It held:

The bankruptcy court did not abuse its discretion in finding the settlement above “the lowest point in the range of reasonableness.”
Each of the four arguments advanced by the Smith Entities was forfeited because the appellants supplied only conclusory statements, block quotes, or ignored controlling statutory text and precedent.
The district court properly assumed the estate had at least a contingent or equitable interest in the property, which sufficed under 11 U.S.C. § 541(a) to allow the trustee to settle claims involving that property.

As a result, the tripartite settlement—dismissal of the state-court litigation, a tiered sharing arrangement on any future sale of the property, release of a $300,000 cash bond to the estate, and Green Tech’s unsecured deficiency claim—stands intact.

Analysis

1. Precedents Cited

The panel weaves together a series of Eleventh Circuit decisions:

In re Justice Oaks II, Ltd., 898 F.2d 1544 (11th Cir. 1990) – Articulates the four-factor test for settlement approval in bankruptcy.
In re Martin, 490 F.3d 1272 (11th Cir. 2007) – Defines the key phrase “the lowest point in the range of reasonableness.”
In re Chira, 567 F.3d 1307 (11th Cir. 2009) – Confirms abuse-of-discretion review for settlement orders.
Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678 (11th Cir. 2014) – Landmark forfeiture doctrine; arguments lacking substantive briefing are abandoned.
Singh v. U.S. Attorney General, 561 F.3d 1275 (11th Cir. 2009) – Reinforces briefing obligations.
In re Hoffman, 22 F.4th 1341 (11th Cir. 2022) – Restates the Eleventh Circuit’s role as a “second court of review” in bankruptcy appeals.

Each precedent serves a distinct purpose. Justice Oaks and Martin establish the substantive test; Chira and Hoffman outline the standard and scope of review; Sapuppo and Singh provide the doctrinal knife that trims away undeveloped arguments.

2. Legal Reasoning

a. Settlement Standard Applied

The bankruptcy court evaluated the settlement under the Justice Oaks factors:

Probability of success in the underlying property dispute.
Difficulties in collection/pre-judgment remedies.
Complexity, expense, and delay of continued litigation.
Paramount interests of creditors.

It concluded the proposal spared the estate protracted litigation, guaranteed release of the $300,000 bond, and gave the estate a share of future sale proceeds—benefits greater than the uncertain upside of a fully-litigated ownership fight.

b. Forfeiture of Appellants’ Arguments

The Eleventh Circuit devoted most of its analysis to why each challenge failed:

Priority & Distribution (11 U.S.C. §§ 507, 726): Appellants cited statutory language but never connected it to the facts. Conclusory statements equal forfeiture.
Disclosure & Discovery: No authority was cited requiring completion of discovery before settlement approval.
Sale of “Non-Estate” Property (11 U.S.C. § 363): Appellants failed to address the district court’s holding that contingent interests qualify as property of the estate under § 541(a).
Counterproposal as “Sure Thing”: Appellants neglected to confront the district court’s finding that the bankruptcy court correctly applied the Justice Oaks test.

In each instance, the panel cited Sapuppo for the rule that undeveloped or conclusory arguments are abandoned on appeal.

c. Abuse-of-Discretion Framework

The court underscored that a settlement need not be perfect; it simply must not dip “below the lowest point.” By affirming, the court implicitly found:

The bankruptcy court assessed each Justice Oaks factor.
The decision rested on evidence in the record and reasonable business judgment of the trustee.
No clear error of law or misapplication of the factors existed.

3. Potential Impact

Although unpublished (and therefore non-binding under 11th Cir. R. 36-2), the decision carries persuasive weight:

Bankruptcy Practice: Trustees now have yet another Eleventh-Circuit endorsement of creative, tiered settlements where estate and creditor interests are intertwined.
Appellate Strategy: The opinion is a stark warning—merely reproducing statutory text or offering ipse dixit assertions will not survive appellate scrutiny.
Range of Reasonableness: The phrase retains formidable, almost talismanic power; unless settlement terms are facially outrageous, reversal is unlikely.
Property of the Estate: Even disputed, equitable or contingent claims are “property,” enabling trustees to settle or dispose under § 363 and § 541.

Complex Concepts Simplified

Chapter 11 vs. Chapter 7: Chapter 11 allows reorganization while the debtor continues operating (“debtor-in-possession”). Chapter 7 converts the case to liquidation, replacing management with a trustee who sells assets and distributes proceeds.
Debtor-in-Possession (DIP): The Chapter 11 debtor acts like a trustee, with fiduciary duties to creditors.
Proof of Claim: A formal statement filed by a creditor identifying the amount owed and legal basis.
Settlement Approval (Justice Oaks Test): Bankruptcy courts weigh probability of success, collection difficulties, litigation complexity/cost, and best interest of creditors.
“Lowest Point in the Range of Reasonableness”: A relaxed threshold—so long as the settlement offers some rational benefit exceeding its risks, the court should approve.
Forfeiture vs. Waiver: Forfeiture is the loss of a right through failure to preserve or argue it; waiver is the intentional relinquishment of a known right.
Non-Argument Calendar: Appeals decided without oral argument, typically when the panel finds the issues straightforward.

Conclusion

Don Smith v. Sonya Salkin Slott may not command binding precedential force, but it crystallizes two recurring themes in Eleventh Circuit bankruptcy jurisprudence: (1) settlements approved under Justice Oaks enjoy broad deference, and (2) appellate courts will not rescue litigants from their own threadbare briefing. For trustees, the opinion validates flexible, business-savvy compromises. For would-be appellants, it is a sharp reminder that careful, thoroughly supported legal argumentation is not optional but indispensable. In the wider landscape, the case fortifies the Eleventh Circuit’s reputation for pragmatic oversight of bankruptcy administration while maintaining rigorous procedural discipline on appeal.