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The estate of Miami aviation tycoon George Batchelor has agreed to settle for $25 million a $46 million probate court claim by the bankruptcy estate of Rich International Airways. The agreement faces opposition from some Batchelor creditors. But if approved by the probate and bankruptcy courts, it would be the first major part of the larger fight over Batchelor money to reach resolution. No hearings on the proposal have been scheduled. Batchelor died in July at age 81, leaving an estate valued at between $300 million and $400 million. The estate is the subject of a battle between his wife, Amanda, and his next of kin, over how much she is due. In addition to the family dispute, probate and bankruptcy claims were filed by Rich and by IAL Aircraft Holding Inc., a Miami company Batchelor sold in 1999. The Rich International claim stems from a pending lawsuit it filed against Batchelor and IAL in Miami-Dade Circuit Court in 1997. Rich, a commercial airline that operated in Miami-Dade County, had a joint venture arrangement with IAL from 1991 to 1996. Rich’s liquidating trust alleges in the suit that Batchelor used the joint venture to divert Rich International assets to IAL. The proposed settlement between Rich and the Batchelor estate, filed in probate court last week, is “a necessary way to untangle the knot,” said Rich’s bankruptcy estate trustee, James S. Feltman on Monday. “Ultimately, all of these claims can be resolved, but someone has to be willing to take the first step. We think we’ve reached that accommodation with the Batchelor estate.” IAL, which is operating under Chapter 11 bankruptcy protection, has filed a $532 million claim against the Batchelor estate in probate court. It alleges that Batchelor used the sale of the company to enrich himself while leaving IAL in debt to creditors and saddled with a $255 million tax bill. The proposed deal would end Rich’s lawsuit against Batchelor’s estate. At the same time, the Batchelor estate would assume Rich’s $46 million claim in the IAL bankruptcy estate, said John H. Genovese, who represents Rich International. This means that the Batchelor estate ultimately could participate in the IAL bankruptcy not just as a defendant but as a creditor, too. Through the settlement, the Batchelor estate essentially is saying that it believes its claim is worth $46 million but that it will accept the lesser amount in order to be paid sooner than if it were to wait for its pending lawsuit against the Batchelor interests to be resolved, said Genovese, partner at Genovese Joblove & Battista in Miami. Attorneys for the Batchelor estate could not be reached for comment. Andrew B. Hellinger, attorney for IAL, said the company had not determined its legal position regarding the proposed Rich deal. But Hellinger, a partner at Meland Russin Hellinger & Budwick in Miami, said that the Batchelor estate’s apparent admission of the full $46 million claim is good news, because it implies an acknowledgement that they should be paying all of IAL’s creditors’ claims. He added: “If they’ve agreed to pay one, we don’t think the rest are far behind.” But opposition likely will come from at least one key participant in the probate case. Barry L. Meadow, counsel for Amanda Batchelor, said he expects to object to the settlement when it goes before the probate court for consideration. The fact that the agreement was negotiated between Rich and the Batchelor estate without Amanda Batchelor, IAL and others involved in the probate case is not a good sign, said Meadow, a partner at Podhurst, Orseck, Josefsburg, Eaton, Meadow, Olin & Perwin in Miami. “To the extent those payments are made, that depletes the assets of the estate,” he said. “No. 2, who made the determination that that’s a fair and realistic amount, regarding the legal issues that are in that case? … The amount was not even told to me by the people who negotiated it.” Rich’s trustee, Feltman, said that Meadow will have ample opportunity to air his concerns in probate and bankruptcy courts. Genovese, Rich International’s attorney, said Rich and presumably the Batchelor estate consider the deal fair. Rich filed for bankruptcy protection in 1996 and sued Batchelor in 1997. The suit was “fairly advanced” in state court. Under the deal, Rich would receive at least $15 million by March 1, and the rest at some point in the future. If the Batchelor estate fails to pay the rest, Rich could terminate the agreement and keep the $15 million.

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