In Integra I we considered (1) whether the pre-certification notice that was given violated due process such that class certification following such notice was improper; (2) whether due process in the context of a defendant class requires that all class members receive actual notice; and (3) whether due process required that new notice of the class settlement be given after the opt-out provision was added and before the fairness hearing took place. Integra I, 262 F.3d at 1108-11. Because the Appellants here focus their arguments on the second of these issues, we limit our discussion to whether Integra I's holding on that issue is the law of the case.

The Integra I appellants, like the Appellants here, argued that "all of the members of the defendant class are entitled to actual notice before they can be bound to a judgment." Id. at 1110. We rejected this argument, relying on the Supreme Court's holding that notice satisfies due process when it is "'reasonably calculated, under all the circumstances, to apprize interested parties of the pendency of the action and afford them an opportunity to present their objections.'" Id. (quoting Mullane v. Cent. Hanover Bank & Trust Co., 339, U.S. 306, 314 (1950)). We held that the notice given here satisfied that requirement, even though, for example, 1455 of the 6423 notices sent regarding the settlement fairness hearing were not actually received. Id. at 1110-11. We emphasized that the Integra I appellants had made "no showing . . . that some better method of notification offered a practicable means of notifying the class." Id. at 1111.

Appellants add little to the arguments of their fellow class members in Integra I. They suggest that, at least in regard to the final notice of the settlement, where the district court was aware that the prior notice of the hearing had failed to reach 1455 class members, "the district court should have required greater efforts to reach [those] defendants." Defendants-Appellants' Br. at 52. In support of this claim, they cite one case in which the court had ordered the non-class party to remail notices that were returned by the postal service and to "retain an address research firm to research any returned notices that do not include a forwarding address." In re The Prudential Ins. Co. of Am. Sales Practices Litig., 177 F.R.D. 216, 222 (D.N.J. 1991). That court, however, recognized that its notice instructions "far exceeded the requirements of Rule 23 and due process." Id. at 232. Here, while the district court did not require the use of an address research service after receiving the Trustee's report on the results of the hearing notice, it did order that notice of the settlement's approval be given by publication as well as by mail. In the absence of a showing by the appellants that another reasonable method of supplementing the Trustee's mailing list would have significantly increased the number of notices actually received, we adhere to Integra I's holding that the notice given satisfied due process.

In reaching this conclusion, we are cognizant of the concern that, in some isolated instances, individual class members may have a judgment entered against them without having received actual notice of the opportunity to raise objections or individual defenses before the expiration of the deadline for doing so. See also Herbert B. Newberg & Alba Conte, 2 Newberg on Class Actions §§ 4:70, :71 (4th ed. 2002) (raising the concern that defendant class members without notice may be bound by a settlement even after the statute of limitations for the original claim has run). We are nonetheless persuaded to adhere to Integra I based on two of its points in particular. First, we recognized that imposing a requirement of actual notice to every class member would place an impossible constraint on defendant class action litigation. Integra I, 262 F.3d at 1110 (citing Mullane, 339 U.S. at 313-14). Second, we noted that individual class members may "challenge the binding effect of the settlement as to themselves in a collateral action." Id. at 1111 n.18; see 4 Newberg & Conte, supra, § 11:64. Based on these considerations, we see no basis for deviating from the law of the case doctrine with regard to the appellants' notice claims.

Whether the Bankruptcy Court's Certification

of this Action as a Defendant Class Action was Proper

We turn now to the first of the two major issues on the merits raised in this appeal and not previously considered in Integra I. The appellants contend that we must vacate the settlement agreement because it is based upon an erroneous class certification. We agree that the appropriateness of class certification lies at the heart of this case. Class action settlements are premised upon the validity of the underlying class certification. Moreover, a trial court overseeing a class action retains the ability to monitor the appropriateness of class certification throughout the proceedings and to modify or decertify a class at any time before final judgment. See Fed. R. Civ. P. 23(c)(1).

We therefore reject the Trustee's argument that the bankruptcy court's certification order is unreviewable because it was interlocutory and thus was made moot by the settlement. Plaintiff-Appellee's Br. at 26. Rather, we hold that the appellants' objections to class certification at the settlement fairness hearing were "sufficient to preserve the right of the objectors to contest the class certification on appeal." Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1145 (8th Cir. 1999); see also Namoff v. Merrill Lynch, Pierce, Fenner & Smith (In re Dennis Greenman Sec. Litig.), 829 F.2d 1539, 1542-43 (11th Cir. 1987) ("In order to preserve an appeal from a class settlement, a class member must, during the course of proceedings, object to either the terms of the settlement or to the nature of the class certification.") (citation omitted).

We review the bankruptcy court's certification of a defendant class pursuant to Rule 23(b)(1) for an abuse of discretion. J.B. ex rel. Hart v. Valdez, 186 F.3d 1280, 1287 (10th Cir. 1999). "There is no abuse of discretion when the trial court applies the correct criteria [under Rule 23] to the facts of the case." Id. (further quotation omitted). We reject the appellants' argument that the heightened scrutiny dictated by Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620-21 (1997), for settlement-only certifications applies to this case since here, unlike in Amchem, the class was certified before settlement negotiations began and the designated class counsel acted as the negotiator for the class. See Petrovic, 200 F.3d at 1145-46.

Under Rule 23, a trial court determining whether class certification is appropriate must first find that a proposed class meets the four prerequisites of numerosity, commonality, typicality, and fair and adequate representation set forth in Rule 23(a).⁽³⁾ Of these, Appellants challenge only the fourth, claiming that Fidelity and its counsel failed to "fairly and adequately protect the interests of the class" as required by Rule 23(a)(4). As we determined above, the law of the case doctrine applies to and resolves the issue of Fidelity's adequacy as a class representative.

Rule 23 also requires the trial court to find that the plaintiff's claim is maintainable as a class action under one of the three categories of suits described in Rule 23(b).⁽⁴⁾ Adamson v. Bowen, 855 F.2d 668, 675 (10th Cir. 1988). Here, as indicated above, the bankruptcy court, on motion of the Trustee, concluded that the Trustee's claim could be maintained under either (b)(1) or (b)(3) and certified a defendant class of spinoff shareholders under (b)(1). In re Integra Realty Res., Inc., 179 B.R. at 272.

Appellants argue this was error, and the defendant class should have been certified under 23(b)(3), which allows class members to opt out of the class, rather than 23(b)(1), which requires no such opt-out right.⁽⁵⁾ They maintain that had the class been certified under (b)(3), Fidelity would have been in a stronger bargaining position vis-a-vis the Trustee when negotiating the settlement. The question, then, is whether the bankruptcy court applied the correct criteria when it determined that 23(b)(1) was the most appropriate category for class certification in this case.

The appellants and the Trustee are at odds in regard to which subsection of Rule 23(b)(1)⁽⁶⁾ the bankruptcy court applied. The appellants strongly assert that the bankruptcy court applied subsection (A), evidently believing that certification under subsection (A) would clearly be improper for a suit seeking to recover monetary damages. However, the bankruptcy court failed to specify which subsection of (b)(1) it was applying. Rather, the court's language suggests that it considered both subsections applicable.⁽⁷⁾ We conclude that the bankruptcy court certified the class under both subsection (A) and subsection (B) and may therefore uphold the certification under either subsection.

We uphold the bankruptcy court's certification under subsection (B) rather than under subsection (A). A widely-recognized limitation on (b)(1)(A) certification requires that there be "more than the mere possibility that inconsistent judgments and resolutions of identical questions of law would result if numerous actions are conducted instead of one class action." Nat'l Union Fire Ins. Co. v. Midland Bancor, Inc., 158 F.R.D. 681, 687 (D. Kan. 1994); see 2 Newberg & Conte, supra, § 4:4. Here, it is not clear that recovery of some ShowBiz shares but not others would require the Trustee to fulfill mutually conflicting obligations. Because we are uncertain regarding the applicability of subsection (A) to this case, we turn to review the bankruptcy court's certification under subsection (B).

We hold that the bankruptcy court properly certified the class under Rule 23(b)(1)(B), based on the court's conclusion that, in the absence of class certification, the Trustee's first suit against a defendant or group of defendants could be dispositive of all remaining suits. This first suit would thus decide the rights of absent shareholders without the class action's assurance that they be adequately represented.

We believe that the particular context of this case distinguishes it from that in which the First Circuit recently held, agreeing with the "vast majority of courts confronted with the question," that "the certification of a class under Rule 23(b)(1)(B) cannot rest solely on an anticipated stare decisis effect." Tilley v. TJX Cos., 345 F.3d 34, 42 (1st Cir. 2003). The First Circuit reasoned that if the "mere possibility" of a stare decisis effect on future actions were sufficient to justify a (b)(1)(B) class, "it would render the other categories under Rule 23(b) superfluous" because Rule 23(a)(2) already requires that all class actions have "questions of law or fact common to the class." Id. at 41-42.

Here, we are convinced that litigation of the Trustee's fraudulent transfer and unlawful dividend claims against one defendant shareholder would present more than the "mere possibility" of a stare decisis effect on future defendants. For one thing, the issue of whether the ShowBiz spinoff constituted a fraudulent transfer or an unlawful dividend is entirely independent of the identity of the defendant shareholder. There is no allegation that any of the shareholders participated in any fraudulent or unlawful activity. As a mere passive recipient of the ShowBiz stock, a defendant here has only a small number of possible individual defenses, such as the claim that he only acted as a conduit for the actual recipients of the stock, or that he had a smaller number of shares than alleged. In such circumstances, a court's conclusions regarding the primary legal and factual issues in the first case would not only form the basis for the application of stare decisis in subsequent cases; they would almost inevitably prove dispositive in those cases. See Lynch Corp. v. MII Liquidating Co., 82 F.R.D. 478, 483 (D.S.D. 1979) (certifying defendant class of shareholders under (b)(1)(B)); Guy v. Abdulla, 57 F.R.D. 14, 18 (N.D. Ohio 1972) (holding that (b)(1)(B) certification of a defendant class is appropriate for the purpose of deciding common issues in a bankruptcy trustee's action to recover voidable preferences and fraudulent conveyances).

Also significant is the fact that, were the Trustee to proceed against the defendants individually rather than as a class, he would likely do so in a single forum, the Bankruptcy Court of the District of Colorado, pursuant to that court's jurisdiction under 28 U.S.C. § 1334. This probability further increases the likelihood that the first case would prove dispositive.

Appellants argue that "due process requires the provision of opt-out rights in a money damages class action," and that therefore the bankruptcy court's certification of a mandatory (non-opt-out) (b)(1) class is inappropriate in this case. Defendants-Appellants' Br. at 40. For this proposition Appellants rely on the Supreme Court's decision in Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985), which addressed the due process rights of absent plaintiff class members as to whom the forum state court lacked personal jurisdiction. The question remains open as to class actions in federal court. See Ticor Title Ins. Co. v. Brown, 511 U.S. 117, 121 (1994) (dismissing a writ of certiorari as improvidently granted and thus refraining from deciding whether an opt-out right in monetary damages cases in federal court was constitutionally required). Moreover, Shutts expressly limited its holding "to those class actions which seek to bind known plaintiffs concerning claims wholly or predominately for money judgments." Shutts, 472 U.S. at 811 n.3 (emphasis added). The Ninth Circuit's Brown decision, applying Shutts to federal court actions, also dealt with a plaintiff class. Brown v. Ticor Title Ins. Co., 982 F.2d 386, 392 (9th Cir. 1992), cert. dismissed, Ticor Title Ins. Co. v. Brown, 511 U.S. 117 (1994). Essentially, these decisions allow potential plaintiffs to take their chances in regard to whether a class action or an individual suit would be most effective in maximizing the amount of damages they might recover.

Regardless of whether Shutts' reasoning would apply in the general context of defendant class actions in federal court where the plaintiff seeks primarily monetary damages, we do not think it applies here. "The fact that a judicial remedy may require one party to pay money to another is not a sufficient reason to characterize the relief as 'money damages.'" Bowen v. Massachusetts, 487 U.S. 879, 893 (1988). The Trustee's action, under § 550 of the Bankruptcy Code, was an attempt to "recover . . . property transferred, or if the court so orders, the value of such property." 11 U.S.C. § 550(a). This provision "[n]owhere . . . speak[s] in terms of 'liability' for a wrongful act or in terms of 'money damages.'" Branch v. F.D.I.C., 825 F. Supp. 384, 419 (D. Mass 1993). "'The legislative theory'" in such an action "'is cancellation [of the transfer], not the creation of liability for the consequences of a wrongful act.'" Id. (quoting Robinson v. Watts Detective Agency, Inc., 685 F.2d 729, 738 (1st Cir. 1982)).

This distinction is relevant for our due process analysis because, unlike the typical class action damage case, where "the individual circumstances of each class member are typically of material importance," it is "virtually never the case" that the proceeds of a single fraudulent transfer or unlawful dividend would be recoverable from one defendant shareholder but not from another. Turner v. Bernstein, 768 A.2d 24, 33 (Del. Ch. 2000). This is certainly true here because the Trustee's right to recover the ShowBiz stock or its value depends entirely on the propriety of Integra's spinoff under applicable bankruptcy and other law. The culpability of individual defendants is of no consequence in this analysis. In the event that a court had declared the spinoff a fraudulent transfer or unlawful dividend, judgment against each defendant would be calculated according to "a common formula or guideline," 2 Newberg & Conte, supra, § 4:49, based on the amount of ShowBiz stock each defendant had received, and subject only to limited individual defenses, which are not waived as a result of class certification. In such a context, certification of a mandatory defendant class does not violate due process as long as the class is adequately represented. Hansberry v. Lee, 311 U.S. 32, 43 (1940). We thus hold that in the circumstances of this case, certification of a mandatory defendant class was not barred simply because the Trustee sought to recover the ShowBiz stock or its monetary value.

Consequently, as indicated above, we conclude that the bankruptcy court did not abuse its discretion by certifying a mandatory defendant class under Rule 23(b)(1)(B) rather than an opt-out class under Rule 23(b)(3). The court's decision was in accord with a general preference for certifying defendant classes under 23(b)(1) or (b)(2) rather than (b)(3) in order to promote judicial economy and prevent the class action device from becoming ineffective as a result of numerous opt-outs by individual defendants. See 2 Newberg & Conte, supra, § 4:64. Because we uphold the bankruptcy court's 23(b)(1)(B) certification, we need not reach the issue of whether settlement negotiations were prejudiced by the alleged inappropriate certification.

D.

Whether the Settlement Was Fair, Reasonable, and Adequate

Appellants also challenge the fairness, reasonableness, and adequacy of the settlement agreement itself. The district court approved the settlement agreement as fair, reasonable, and adequate based on the four factors outlined in Jones v. Nuclear Pharmacy, Inc., 741 F.2d 322, 324 (10th Cir. 1984). The court found that (1) the settlement was fairly and honestly negotiated, (2) serious legal and factual questions placed the litigation's outcome in doubt, (3) the immediate recovery was more valuable than the mere possibility of a more favorable outcome after further litigation, and (4) the Trustee and Fidelity believed the settlement was fair and reasonable. Appellants' App. Vol. 3 at 837.

We review a district court's approval of a class action settlement agreement for an abuse of discretion. Rutter & Wilbanks Corp., 314 F.3d at 1186. We will not disturb the district court's approval "absent a distinct showing it was based on a clearly erroneous finding of fact or an erroneous conclusion of law or manifests a clear error of judgment." Id. at 1187 (further quotation omitted).

We first address the appellants' claim that the terms of the settlement are excessive. Essentially, the appellants argue that the settlement, by requiring defendant class members to pay up to $7 per share of ShowBiz stock, is inherently unfair because even if the Trustee could have succeeded in litigation on the merits, the maximum amount he could have recovered was $5.50 per share. In other words, they contend that the value of the ShowBiz stock, for purposes of 11 U.S.C. § 550(a), could not be more than its price at the time of the spinoff. We reject the appellants' argument because, as discussed below, the amount actually recoverable by the Trustee if he had prevailed on the merits is far from clear.

In the case of a fraudulent transfer, § 550(a) allows a bankruptcy trustee to recover "the property transferred, or if the court so orders, the value of such property." 11 U.S.C. § 550(a). "'Section 550(a) is intended to restore the estate to the financial condition it would have enjoyed if the transfer had not occurred.'" Hirsch v. Steinberg (In re Colonial Realty Co.), 226 B.R. 513, 525 (Bankr. D. Conn. 1998) (quoting Hirsch v. Gersten (In re Centennial Textiles, Inc.), 220 B.R. 165, 176 (Bankr. S.D.N.Y. 1998)). Normally this is achieved by allowing the trustee to recover the actual property transferred. See id. However, where the property is unrecoverable, "courts allow the trustee to recover the value of the property." Id.

This is where the difficulty in our case begins because § 550(a) "'does not define "value," nor indicate at what time "value" is to be determined.'" Id. (quoting Gennrich v. Montana Sport U.S.A., Ltd. (In re Int'l Ski Serv., Inc.), 119 B.R. 654, 658 (Bankr. W.D. Wis. 1990)). The court in In re Colonial identified as a general rule that "the market value of the property at the time of transfer, less the consideration received, is the proper measure of recovery under § 550." Id. It thus rejected the trustee's argument that the bankruptcy estate should recover the appreciated value of transferred stock.

Our own review of fraudulent transfer cases has revealed no such general rule, however, particularly where the property in question has, as here, appreciated since the time of the transfer. The cases cited by In re Colonial and by the appellants in support of this rule all deal with instances where the transferred property had decreased in value since the time of the transfer. See Kepler v. Sec. Pac. Hous. Servs. (In re McLaughlin), 183 B.R. 171, 176-77 (Bankr. W.D. Wis. 1995); Shape, Inc. v. Midwest Eng'g (In re Shape, Inc.), 176 B.R. 1, 3 (Bankr. D. Me. 1994); Official Creditors Comm. v. Agri Dairy Prods., Inc. (In re James B. Downing & Co.), 74 B.R. 906, 911 & n.6 (Bankr. N.D. Ill. 1987). The rationale behind the rule in those cases is to avoid the inequity to the bankruptcy estate that would result if the court ordered the return of the actual property at issue. See Tidwell v. Chrysler Credit Corp. (In re Blackburn), 90 B.R. 569, 573 (Bankr. M.D. Ga. 1987) ("Because of the depreciable nature of the property involved [here], the Court finds that Trustee is entitled to recover the value of the property at the time of transfer."). As the In re Colonial court recognized, "'the proper focus in [§ 550(a)] actions is not on what the transferee gained by the transaction, but rather on what the bankruptcy estate lost as a result of the transfer.'" In re Colonial Realty Co., 226 B.R. at 525 (quoting Gill v. Maddalena (In re Maddalena), 176 B.R. 551, 557 (Bankr. C.D. Cal. 1995)). Rather than In re Colonial's rule, we believe the only generally applicable rule in regard to § 550(a) valuation is that "the time at which the value is measured depends upon the circumstances of each individual case." Pritchard v. Brown (In re Brown), 118 B.R. 57, 60 (Bankr. N.D. Tex. 1990) (quoting In re Blackburn, 90 B.R. at 573 (citing 4 Collier on Bankruptcy ¶ 550.02 n.6 (15th ed. 1987))).

Cases in which the value of transferred property appreciated after the transfer are rare. We are aware of only one case other than In re Colonial dealing with such circumstances, and there the bankruptcy court ordered the return of transferred stock that had appreciated since the transfer. Cooper v. Ashley Communications, Inc. (In re Morris Communications NC Inc.), 75 B.R. 619, 629 (Bankr. W.D.N.C. 1987), rev'd on other grounds by Cooper v. Ashley Communications, Inc. (In re Morris Communications), 914 F.2d 458 (4th Cir. 1990).

We therefore reject the appellants' assertion that the settlement imposed a cost on shareholders higher than they would ever have to pay if the case proceeded in litigation. As charted in Fidelity's memorandum to the district court in support of the settlement agreement, the value of ShowBiz shares on the stock market since the time of the spinoff ranged from approximately $5.50 to $101.25 per share. Appellants' App. Vol. 4 at 1367. If the lower courts had held that the spinoff constituted a fraudulent transfer or unlawful dividend, defendant class members may have been ordered to return their stock. Alternatively, they may have been ordered to pay an amount somewhere between $5.50 and $101.25 per share. The only way to determine precisely what the outcome would have been was to litigate the case to conclusion (which, we note, defendant class members had the option of doing by opting out of the settlement). We therefore conclude that the terms of the settlement, limiting the Trustee's recovery to the lesser of $7 per share or the amount for which the stock was ultimately sold, are not inherently unfair.

The appellants' remaining arguments revolve around the form of the district court's opinion. The appellants argue that the district court "did not adequately support its approval of the Settlement" by explaining the reasons for its approval and for its rejection of the objections that were raised. Defendants-Appellants' Br. at 54-55 (citing Maher v. Zapata Corp., 714 F.2d 436, 455 (5th Cir. 1983)). To be sure, "'a reviewing court [must] have some basis for distinguishing between well-reasoned conclusions arrived at after a comprehensive consideration of all relevant factors, and mere boilerplate approval phrased in appropriate language but unsupported by evaluation of the facts or analysis of the law.'" Newman v. Stein, 464 F.2d 689, 692 (2d Cir. 1972) (quoting Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 434 (1968)). However, while more extensive explanation by the district court may have been helpful to our review, we will not overturn the district court's decision on the basis of a "merely formal" deficiency as long as the decision finds support in the record. Protective Comm., 390 U.S. at 437.

The bulk of the appellants' arguments contesting the settlement's fairness concern the district court's alleged failure to take into account various issues and facts in its holding. These include Fidelity's alleged conflict of interest, the propriety of class certification, the likelihood of defendants' success in litigation based on the defenses raised in the preliminary dispositive motion, the Trustee's prior settlement with Hallwood and Hallwood's consequent release from liability related to the spinoff, and the number of objections to the settlement. All of these arguments essentially restate the appellants' contention that the district court erred by failing to explain its holding in sufficient detail, with reference to these facts and issues. We agree with the appellants that all of these factors should have been part of the mix in the district court's consideration of the settlement's fairness. However, for the same reasons explained above, we disagree that the district court's failure to refer to these factors in its order constitutes definitive proof that it failed to consider them in reaching its decision.

The district court claimed, in its order and final judgment, to have considered all prior proceedings in the case and all objections and submissions that were made in connection with the proposed settlement, and, in the absence of evidence to the contrary, we assume that it did so. Appellants' App. Vol. 3 at 836. The materials before the district court included the memoranda in support of the settlement submitted by both the Trustee and Fidelity, each of which were supplemented by substantial evidentiary appendices that focused primarily on the history of Integra, its involvement with Hallwood, and the factual details of the spinoff; Integra's financial condition before and after the spinoff; the fluctuating value of ShowBiz stock after the spinoff; and the bankruptcy court's approval of Integra's reorganization plan. The materials also included all written objections to the settlement. At the settlement fairness hearing, the district court heard from the Trustee's counsel and Fidelity's counsel in support of the settlement, then heard objections presented by Mr. Greenbaum, an attorney appearing on his own behalf, and Walton Bader, representing a number of defendant class members, and also heard individual issues raised by a number of other attorneys and pro se defendants. Appellants' App. Vol. 3 at 699-792. The district court also had before it the bankruptcy court's prior opinions on class certification and Fidelity's preliminary dispositive motion. The record thus indicates that the district court was aware of all the issues that appellants now argue should have been considered when determining the settlement's fairness.

Having carefully reviewed the record, in light of the four Jones factors listed above, we believe that the district court did not abuse its discretion by approving the settlement. What is clear from the record is that this litigation involved a number of contentious issues that could not have been decided on the merits without extensive further proceedings. We are unwilling to overturn the settlement of this drawn-out case based on the mere possibility that Fidelity and the defendant class could have prevailed, or that Hallwood could have been forced to indemnify all defendant class members,⁽⁸⁾ if the case had been tried to its conclusion.

E.

Whether the Bankruptcy Court Erred

by Denying Fidelity's Dispositive Motion

In their final argument, the appellants urge us to review the bankruptcy court's denial of Fidelity's dispositive motion and conclude that the court's legal conclusions were in error. Such a review would require us to consider the merits of the ShowBiz shareholders' legal arguments in regard to the Trustee's fraudulent transfer and unlawful dividend claims. The lower courts never reached a final judgment on these issues. Rather, the case has now been resolved, as far as these appellants are concerned, by a settlement agreement, which takes the place of a final judgment on the merits. Significantly, the settlement agreement itself does not preserve the rights of settling parties to appeal the merits of the case. We believe that allowing settling parties to appeal the merits, after the settlement agreement has been upheld, would effectively negate the presumed intent of the settling parties to end their litigation without reaching the merits. We therefore hold that the appellants' claims in regard to the dispositive motion are moot. See 13A Wright, et al., supra, § 3533.2, at 233 (2d ed. 1984) ("Settlement moots an action. . . ."). Here, had the appellants wished to preserve their right to appeal the bankruptcy court's denial of the dispositive motion, they could have done so by opting out of the settlement and receiving a judgment on the merits in the district court.

CONCLUSION

For the foregoing reasons, the decision of the district court upholding the settlement agreement is AFFIRMED.

^1.In both Integra I and here we joined numerous appeals for procedural purposes and, as relevant here, the appellants joined in a single opening and reply brief. See Fed. R. App. P. 3(b)(2). The same counsel and virtually identical briefs on the merits were before us then and again now.

Due to the congruence of issues in the Integra I appeals and the subsequently docketed appeals now before us, we abated these appeals pending our decision in Integra I. Following that decision, we ordered the parties to file briefs addressing whether our decision in Integra I dictated that these appeals should also be dismissed. Shortly before the Supreme Court's decision in Devlin v. Scardelletti, 536 U.S. 1 (2002), was issued, we ordered the parties to file briefs on the merits. Because the five separate appeals addressed here (Docket Nos. 99-1547, 99-1548, 99-1569, 99-1586 and 00-1018) have been combined for convenience, we refer at various places to this appeal in the singular.

^2.We note that the caption in Integra I lists E. Thomas Spengler among one group of defendant-appellants. It seems that Spengler was included in the caption as a member of the Ad Hoc Protective Committee for ShowBiz Stockholders and thus did not bring his status as class representative to the attention of the court. See Integra I, 262 F.3d at 1097-98 nn. 4, 5. More to the point, Mr. Spengler's separate appeal is before us here.

^3.(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a).

^4.(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:

(1) the prosecution of separate actions by or against individual members of the class would create a risk of

(A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or

(B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or

. . . . .

(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

Fed. R. Civ. P. 23(b).

^5.(c) Determination by Order Whether Class Action to be Maintained; Notice; Judgment; Actions Conducted Partially as Class Actions.

. . . .

(2) In any class action maintained under subdivision (b)(3), the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall advise each member that (A) the court will exclude the member from the class if the member so requests by a specified date; (B) the judgment, whether favorable or not, will include all members who do not request exclusion; . . .

Fed. R. Civ. P. 23(c)(2).

^6.Subsection (1)(A) focuses on the risk of separate adjudications to the nonclass party, here the Trustee, and is satisfied when separate actions would result in "inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class." Fed. R. Civ. P. 23(b)(1)(A). Subsection (1)(B) focuses on the risk of separate actions to the individual potential class members, here the spinoff shareholders, and applies when "adjudications [against] individual members of the class . . . would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests." Fed. R. Civ. P. 23(b)(1)(B); see 7A Wright, et al., supra, §§ 1773, 1774 (2d ed. 1986).

^7.Compare In re Integra Realty Res., Inc.,179 B.R. at 271 (invoking subsection (A)'s concern with the effect of failing to certify on the non-class party by comparing the case here to a prior non-class action where "differing interpretations of the law assured a right of recovery by the trustee in some cases and denied it against other defendants who were similarly situated"); with id. (invoking subsection (B)'s concern with the effect of failing to certify on potential class members by noting that if it did not certify a class, "a judge in a later case could be constrained by stare decisis to apply previously adopted rules to different defendants," with the result that "as a practical matter the first suit could be dispositive of the class interests"); id. at 272 (concluding that "[c]lass certification will assure that the rights of absent parties are adequately protected and not summarily dealt with by the application of stare decisis from a case to which they were not a party").

^8.As we noted in Integra I, we express no opinion in regard to whether the Trustee's settlement with Hallwood prevents defendant class members from seeking indemnification from Hallwood. 262 F.3d at 1097 n.3.

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