By statute, the court must not approve a sale of property pursuant to a tax lien for less than two-thirds of the fair market value. 28 U.S.C. § 2001(b). The district court accepted the purchase price after reviewing three valid appraisals, which show that $6.8 million clearly exceeds two-thirds of the fair market value of the property.
But the purchase agreement also requires the receiver to dismiss the receivership’s causes of action against Tiburon. Unlike appellants’ meritless personal claims, the receivership has valid claims against Tiburon. However, any value these claims may have is speculative at best, and the district court did consider the value of the lawsuits when it decided to approve the sale.
An attorney experienced in land use litigation submitted his recommendations to the district court regarding the viability of the lawsuits. He ultimately concluded that there is a low probability of a recovery exceeding the current purchase offer, plus the additional cost of litigation and the continuously accruing interest on appellants’ tax liability. Furthermore, the receiver, an experienced real estate attorney, indicated that Tiburon would most likely rescind the purchase offer if it did not include dismissal of the lawsuits. If this offer were rejected then the receiver estimated that a sale to a private developer, if an interested buyer were found, would net far less than the $6.8 million offered. The district court considered this information, and noted that: “After carefully studying the proposed agreement, the receiver’s motion and supporting documents … I conclude that the proposed sale achieves the highest possible return on the Tiburon property …. Even the most optimistic evaluation of the claims shows that it is extremely unlikely that defendants could recover enough damages to offset the high expense and long delay of litigation.” District Court’s Order of August 18, 1995. On this basis, the district court judge then exercised his discretion to forgo appraisals of the lawsuits.
Under these facts we cannot conclude that the district court abused its discretion in approving the sale. We therefore affirm the district court’s order approving the sale of the property to Tiburon for the purchase price of $6.8 million.
IV
For the foregoing reasons, we find that appellants’ personal lawsuits are subject to the federal tax lien, and thus, the district court did not abuse its discretion when it expanded the receivership to encompass the lawsuits. Furthermore, we affirm the district court’s order confirming the sale of the property. Therefore, we remand so that the district court may order appellants to dismiss and release any claims they may have against Tiburon in connection with this matter, and we order the emergency stay lifted so that the sale can proceed apace.
Affirmed and remanded.
Twin Books Corporation,
Plaintiff-Appellant,
v.
The Walt Disney Company; Buena Vista Home Video, Inc.; and Buena Vista Pictures Distribution, Inc., Defendants-Appellees.
No. 95-15250.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted March 11, 1996.
Decided May 20, 1996.
