Opinion
Case No. 01-16034 (AJG), Jointly Administered Contested Matter.
June 9, 2005
Andrew J. Gallo, Bingham McCutchen LLP, Boston, MA, By its attorneys, CALEDONIA GENERATING, LLC.
Andrew M. Troop (pro hac vice), Weil, Gotshal Manges LLP, Boston, Massachusetts, By their attorneys, ENRON CORP., EPC ESTATE SERVICES, INC., NEPCO POWER PROCUREMENT COMPANY.
STIPULATION AND ORDER RESOLVING CLAIMS OF CALEDONIA GENERATING, LLC (CLAIM NOS. 11935, 12196 AND 12197)
WHEREAS, on or about October 11, 2002, Caledonia Generating, LLC ("Caledonia") filed claim numbers 11935, 12196 and 12197 (collectively, the "Claims") against, respectively, Enron Corp. ("Enron"), EPC Estate Services, Inc. (f/k/a National Energy Production Corporation ("NEPCO")) and NEPCO Power Procurement Company ("NPPC", together with Enron and NEPCO, the "Objectors") in their respective chapter 11 cases;
WHEREAS, the Claims were each designated as contingent and unliquidated;
WHEREAS, the Claims arise from contracts concerning the engineering and construction of an electrical generating facility in Caledonia, Mississippi (the "Caledonia Facility");
WHEREAS, those contracts, each dated as of April 4, 2001, are as follows (the "Contracts"): (a) a Construction Agreement by and between NEPCO and Caledonia (the "Construction Agreement"); (b) an Engineering and Equipment Procurement Agreement by and between NPPC and Caledonia (the "EEP Agreement"); (c) a Coordination Agreement by and between NPPC, NEPCO and Caledonia (the "Coordination Agreement"); and (d) a Guaranty Agreement between Enron and Caledonia (the "Enron Guaranty");
WHEREAS, in general terms, pursuant to the Construction Agreement, NEPCO agreed to construct the Caledonia Facility on a fixed-price basis, and NPPC, pursuant to the EEP Agreement, agreed to engineer and procure equipment for the Caledonia Facility, also on a fixed-price basis;
WHEREAS, pursuant to the Coordination Agreement, NEPCO and NPPC agreed, among other things, to coordinate their efforts and be jointly responsible for completing the Caledonia Facility;
WHEREAS, NEPCO and NPPC were both obligated to complete the Caledonia Facility in exchange for the fixed price under the Construction Agreement plus the fixed price under the EEP Agreement (collectively, the "Contract Price");
WHEREAS, under the Enron Guaranty, Enron guarantied, subject to certain limitations, the obligations of NEPCO and NPPC under the Construction Agreement, EEP Agreement and Coordination Agreement;
WHEREAS, on December 2, 2001, Enron filed a voluntary chapter 11 petition with the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court");
WHEREAS, as of that date, construction of the Caledonia Facility had not been completed, and a dispute arose as to whether NEPCO and/or NPPC had sufficient financial resources to perform its respective contractual obligations;
WHEREAS, on May 14, 2002, Caledonia terminated both the Construction Agreement and the EEP Agreement, and, subsequently, on May 20, 2002, NEPCO and NPPC both filed chapter 11 petitions with the Bankruptcy Court;
WHEREAS, in its Claims, Caledonia alleges that the Objectors are jointly and severally liable for amounts in excess of the Contract Price expended in completing the Caledonia Facility, which is alleged to be no less than $31,098,687;
WHEREAS, in its Claims, Caledonia also seeks reimbursement for costs allegedly incurred in replacing the Construction Agreement and EEP Agreement, including legal fees, administrative costs and consideration provided to Caledonia's lenders, in an amount no less than $560,000, making the total amount specified in the Claims no less than $31,658,687;
WHEREAS, on July 15, 2004, a plan of reorganization (the "Plan") was confirmed for the debtors, including the Objectors, in the above-captioned jointly administered chapter 11 cases in the NY Bankruptcy Court designated as case number 01-16034 (AJG) (the "Enron Bankruptcy Cases");
WHEREAS, on November 17, 2004, the Plan became effective;
WHEREAS, on March 8, 2005, the Objectors filed an objection to the Claims pursuant to an order of the Bankruptcy Court, dated February 18, 2004, (1) Establishing Procedures to Estimate Unliquidated and Contingent Claims, (2) Establishing Procedures to Estimate Counterclaims, (3) Establishing Procedures to Compromise Claims and Counterclaims and (4) Fixing Notice Procedures and Approving Form and Manner of Notice (the "Estimation Objection");
WHEREAS, the Estimation Objection requests that the NY Bankruptcy Court estimate the Claims at $20,993,566 and maintains that Caledonia has not provided a legal basis, invoices or other information necessary to support recovery of other amounts asserted in the Claims;
WHEREAS, Caledonia disputes the Estimation Objection;
WHEREAS, since the filing of the Estimation Objection, the Objectors and Caledonia have exchanged information pertaining to the Claims and have reached a settlement resolving the Claims and the Estimation Objection on the terms set forth below;
WHEREAS, the Objectors and Caledonia hereby resolve the Claims and the Estimation Objection as stipulated below, subject to the approval of the Bankruptcy Court, and request that this stipulation be entered as an order of the Bankruptcy Court;
NOW, THEREFORE, it is hereby AGREED and ORDERED:
A. Claim number 12197 against NPPC is allowed as a class 69 claim under the Plan in the amount of $13,494,896.
B. Claim number 12196 against NEPCO is allowed as a Class 67 claim under the Plan in the amount of $13,494,897.
C. Claim number 11935 against Enron is allowed as a Class 185 claim under the Plan in the amount of $26,989,793.
D. All scheduled liabilities of the Objectors to Caledonia in the Enron Bankruptcy Cases arising from, related to or connected with the Caledonia Facility, the Claims or the Contracts are expunged, including, to the extent applicable, scheduled liability numbers 100017680, 100906030 and 100906040.
E. Except as provided in paragraphs B and C above, Caledonia and its predecessors, successors and assigns release, waive and relinquish any and all demands, causes of action, liabilities, debts, obligations, and claims (as that term is defined in 11 U.S.C. § 101(5)) no matter how arising, including by way of assignment or subrogation, of whatsoever kind and nature, character and description, whether in law or equity, presently asserted or unasserted, known or unknown, fixed, matured or contingent, liquidated or unliquidated, against the Objectors and/or their affiliates, any debtor or reorganized debtor in the Enron Bankruptcy Cases, any of the foregoing entities' respective past, present and future officers, directors, partners, managers, employees, agents and servants, to the extent arising out of or relating to the Caledonia Facility, the Claims or the Contracts.
F. The Objectors waive and relinquish any and all demands, causes of action, liabilities, debts, obligations, and claims (as that term is defined in 11 U.S.C. § 101(5)) no matter how arising, including by way of assignment or subrogation, of whatsoever kind and nature, character and description, whether in law or equity, presently asserted or unasserted, known or unknown, fixed, matured or contingent, liquidated or unliquidated, against Caledonia, its affiliates, or any of its respective past, present and future officers, directors, partners, managers, employees, agents and servants, to the extent arising out of or relating to the Caledonia Facility, the Claims or the Contracts.
G. Caledonia represents that it is the owner of the Claims and has full power and authority to compromise those claims as provided herein.
H. This Stipulation shall only be effective when approved by the Bankruptcy Court.
I. Unless and until this Stipulation is rejected by the Bankruptcy Court, Caledonia need not file a response to the Estimation Objection. In the event this Stipulation is rejected by the Bankruptcy Court, Caledonia shall have ten (10) business days from the date of entry of an order rejecting this Stipulation to file and serve a response to the Estimation Objection, including an Opt Out Form, in accordance with the applicable procedures established by the Bankruptcy Court.
So Ordered.