Rice

Gene Rice, Lola Rice, Ernest Modzelewski, and Nancy Modzelewski (“the Nonsettlors”) appeal the district court’s approval of the partial settlement of a Resolution Trust Corporation (“RTC”) lawsuit against many of Merabank’s former directors and officers. 1 In addition to the RTC’s suit, the settlement encompassed a number of interrelated actions arising out of the failure of Merabank, after which the RTC became receiver. These included two shareholders’ class actions, a derivative suit, and directors’ and officers’ contested compensation suits. Ultimately, over forty parties agreed to join the settlement, including a class of shareholders, a group of derivative plaintiffs, Pinnacle West Capital Corporation (which had previously acquired Merabank), several of Mera-bank’s former officers and directors, two directors’ and officers’ liability insurance companies (“D & 0 insurers”), and the RTC. 2 The settling officers and directors of Mera-bank gave up their contested compensation claims against the RTC in exchange for releases from all personal liability, including contributing to the settlement fund.

In approving the settlement agreement, the district court found that it was…