Judge Edward J. Coleman III for the United States Bankruptcy Court Southern District of Georgia approved on Tuesday, July 30, a $7 million settlement agreement between Master Lending Group, LLC (MLG) and Judith Hirsch, the widow of the Savannah investment company’s founder Gregory Hirsch. The approval made the settlement agreement official; it was first reported by Connect Savannah on July 1, 2024. MLG filed for Chapter 7 bankruptcy on July 6, 2023.

Gregory Hirsch was diagnosed with Lou Gehrig’s Disease (ALS) in August 2021 and died of the disease on August 3, 2023. According to the claims register filed with the court, there was $42,883,714.89 in creditor claims against the debtor, MLG. Once bankruptcy was filed by MLG (Judith Hirsch signed off on the order using Power of Attorney), 101 different creditor claims were made against MLG.

Legally, the settlement agreement was made through Trustee Tiffany Caron, and between Judith Hirsch and the Master Lending Group, LLC Estate.

The $7 million settlement will be distributed to creditors pro rata, or in proportion to each claim amount.

“The Trustee’s consideration to Mrs. Hirsch includes a release of all possible claims of the Bankruptcy Estate against Mrs. Hirsch or her children,” says the settlement. “Mrs. Hirsch’s payment of the settlement amount shall consist of a concession of the funds held in the registry of the court in the Interpleader (Case No. 23-04021-EJC), currently totaling approximately $5,162,557.60, including interest. (II) a remainder payment in the amount of $7,000,000 less the Interplead Funds.”

The settlement needed Judge Coleman’s approval before it became official. There was at least one objection to the $7 million agreement ahead of its approval by the court. Attorney CJ Steinmetz III, who represents creditors with claims Nos. 58-67 in the MLG case, submitted an eight-page objection for client and creditor James E. Jones on July 29.

“This is an unusual objection, because it is filed more as a placeholder than to substantively object to any one or multiple provisions within the proposed settlement of all claims by and between the Chapter 7 Estate and Judy Hirsch, the wife of the late Greg Hirsch, the sole Member, Owner, and Architect of the Debtor LLC,” the objection from Steinmetz says. “The objection is lodged because Creditor and many, if not all, other creditors lack sufficient information which bears upon the terms of the settlement to enable them to make as informed of a decision as to that which they are each entitled by principles of equity and jurisprudence which govern proceedings in cases such as this.”

“By virtue of this objection, Creditor is (effectively) moving this Court to postpone any adjudication of the question of settlement approval for a period of no less than 60 days and to require that the [Caron] make certain disclosures and take certain action which will enable Creditor and all other creditors to make informed decisions about whether or not to approve or disapprove the proposed settlement.”

In the objection (see above), Steinmetz argues the settlement amount is not enough when compared to the amount of money coming from all 101 claims. He says creditors, like his client, are being asked to settle for too little money, with too little information.

“The settlement asks creditors to settle $43,000,000.00 in claims for a little over $7,000,000.00, which is $0.16 on every dollar.” — Creditor objection to MLG settlement approval

“The settlement asks creditors to settle $43,000,000.00 in claims for a little over $7,000,000.00, which is $0.16 on every dollar,” the objection says. “While Trustee’s lawyer will tell the Court that is a fabulous deal in a case having characteristics similar to this one, such an opinion does not obviate the fundamental entitlement that a party being asked to make a legal decision which will forgo valuable legal rights and (likely) waive rights to collect well over 75% of monies at issue is entitled to make as informed of a decision as is reasonably possible. In our case, tens of millions of dollars are at stake and ride on these creditors’ decisions. They are entitled to be as informed as reasonably possible prior to having to commit.”

Jones’ claim–No. 67 of 101–is for $3.6 million, according to the court’s claim register. It was made on Oct. 1, 2023; the deadline for creditor claims was Oct. 10, 2023. Caron and special counsel for the Trustee, Neil Gordon, met with creditors on July 9, 2024 at a settlement hearing. The topic was to inform creditors of the $7 million settlement agreement with Judith Hirsch, and to answer any questions they may have. It was held at Congregation B’nai Brith Jacob Synagogue on Abercorn Street and was closed to the media, but it was billed as an opportunity for creditors like Jones to have their questions answered.

“The Trustee and Special Counsel for the Trustee will be present at the meeting to explain the status of the case, the proposed settlement and answer any questions.” said the MLG Trustee’s website of the meeting. “This meeting is only for creditors of Master Lending Group, LLC. Security will be present at the entrance.”

This article appears in Connect Savannah I July 2024.