Opinion
Case No. 01-16034 [AJG] Jointly Administered (Post Confirmation).
June 15, 2005
Frank A. Oswald (FAO-1223), Daniel F.X. Geoghan (DG-3132), TOGUT, SEGAL SEGAL LLP, Bankruptcy Co-Counsel for Enron Corp., et al., New York, New York, Reorganized Debtors.
JEFFREY ISAACS, ESQ., A Member of the Firm, POST, KIRBY, NOONAN SWEAT, LLP, San Diego, Californa, By its counsel, PROCOPIO, CORY, HARGREAVES SAVITCH, LLP.
WHEREAS, commencing on December 2, 2001 (the "Petition Date"), Enron Corp., and certain of its affiliated debtor entities (collectively the "Reorganized Debtors") filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"); and
WHEREAS, the Effective Date of the Reorganized Debtors' Plan occurred on November 17, 2004 and the Debtors emerged from Chapter 11; and
WHEREAS, on October 24, 2003, the Reorganized Debtors made a demand (the "Demand") upon Post, Kirby, Noonan Sweat LLP ("Post Kirby", together with the Reorganized Debtors, the "Parties") seeking, pursuant to, inter alia, sections 547, 548 and 550 of the Bankruptcy Code, the return of alleged preferential transfers aggregating $291,475.06 (the "Transfers") made within 90 days of the Petition Date; and
WHEREAS, by Stipulation dated November 26, 2003, as amended from time to time (the "Tolling Stipulation"), the parties agreed to toll the statute of limitations: (i) for any claim or cause of action against Post Kirby that may be asserted by one or more of the Reorganized Debtors under sections 502, 506, 541, 544, 547, 548, 549, 550 and 553 of the Bankruptcy Code (the "Claims"); or (ii) any defenses, setoffs and counterclaims to such Claims which might be asserted by Post Kirby; and
WHEREAS, a claim in the amount of $66,775.97, claim no. 10305839, was scheduled by the Reorganized Debtors in favor of Post Kirby ("Scheduled Claim No. 10305839"); and
WHEREAS, as a result of arms-length negotiations and an exchange of documents, the Reorganized Debtors and Post Kirby have agreed to settle the Debtors claims under section 547, 548 and 550 by: (a) Post Kirby' payment of $180,000 to the Reorganized Debtors (the "Settlement Amount"); and (b) the waiver by Post Kirby of any and all claims against the Reorganized Debtors and their estates arising from or relating to the Transfers sought in the Demand, including, but not limited to, claims arising pursuant to section 502(h) of the Bankruptcy Code and Scheduled Claim No. 10305839, pursuant to the terms of this Stipulation and Order (the "Stipulation"); and
WHEREAS, pursuant to the Order of the Bankruptcy Court dated September 11, 2003 ("Settlement Procedures Order"), the Reorganized Debtors are only required to: (A) serve notice of this Stipulation (the "Notice") by regular, first-class mail upon: (i) counsel for the Official Committee of Unsecured Creditors appointed in the Debtors' Chapter 11 cases (the "Creditors' Committee"); (ii) the United States Trustee; (iii) the parties listed on the Service List in the Case Management Order; and (iv) Post Kirby; and (B) file such Notice on the Bankruptcy Court's electronic docket; nonetheless, in light of, among other things, the release granted herein, the Parties seek Bankruptcy Court approval of this Stipulation; and
WHEREAS, the Procedures Order is deemed a part hereof and incorporated by reference herein; and
WHEREAS, the Reorganized Debtors have concluded that the proposed settlement is in the best interests of their estates, considering, among other things, the defenses asserted by Post Kirby and the cost, expense and delay associated with litigating the matter, the result of which is uncertain.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by and between the Parties as follows:
1. Post Kirby shall pay the Settlement Amount to the Debtors in six (6) installments. The first installment of twenty-five thousand ($25,000) dollars (the "First Installment") shall be paid on the date this agreement is executed by the Parties to Togut, Segal Segal LLP, counsel to the Reorganized Debtor, by wire transfer, in immediately available funds, to be held in escrow pending the Effective Date (as defined below) whereupon such funds shall be released to the Reorganized Debtors. The next four (4) installments, each in the amount of twenty-five thousand ($25,000) dollars (the "Monthly Installments") shall be paid monthly on or before each of June 30, 2005, July 29, 2005, August 31, 2005 and September 30, 2005 directly to the Reorganized Debtors, by wire transfer, in immediately available funds. The final installment, in the amount of fifty-five thousand ($55,000) dollars (the "Final Installment", together with the First Installment and the Monthly Installments, the "Installments"), shall be paid on or before October 31, 2005 directly to the Reorganized Debtors, by wire transfer, in immediately available funds. Wire transfer instructions for each Installment have been provided to Post Kirby. In the event that this Stipulation is for any reason disapproved by the Bankruptcy Court, the first installment of $25,000 shall be returned to Post Kirby upon such disapproval within ten (10) business days after the Bankruptcy Court disapproves this Stipulation. In the event that approval of this Stipulation by the Bankruptcy Court is not obtained prior to the due date of any installment subsequent to the first installment, the due date of such subsequent installment shall be deferred until such approval by the Bankruptcy Court is obtained.
2. The "Effective Date" of this Stipulation shall be the date on which it is "So Ordered" by the Bankruptcy Court. The Reorganized Debtor shall use reasonable efforts pursuing approval of this Stipulation by the Bankruptcy Court.
3. If any Installment is not fully and completely paid on or before its due date, in accordance with paragraph "1" above, the Reorganized Debtors are hereby authorized to settle an order on five (5) days notice to Post Kirby and its counsel for the then outstanding balance of the Settlement Amount still owing to the Reorganized Debtors, plus interest, costs and legal fees incurred by the Reorganized Debtors enforcing the terms of this Stipulation, in amounts to be determined by the Bankruptcy Court.
4. After the Effective Date, upon timely, full and complete payment of the Settlement Amount (the "Consummation Date"), the Reorganized Debtors, their respective predecessors, successors and assigns shall be deemed to have waived and released any and all claims of every kind and nature, whether known or unknown, that they may have against Post Kirby (to be interpreted in the broadest manner possible), provided however, the "Tolled Period" provided for in the Tolling Stipulation is further extended through and including the Consummation Date, provided further that, in the event this Stipulation is not "So Ordered" by the Bankruptcy Court, the Parties agree that the "Tolled Period" provided for in the Tolling Stipulation is extend to and including 20 days after the denial of the relief requested herein.
5. On the Effective Date, Post Kirby, its respective predecessors, successors and assigns, shall be deemed to have waived and released any and all claims of every kind and nature, whether known or unknown, that it may have against the Debtors and the Reorganized Debtors (to be interpreted in the broadest manner possible) including any claim for, or on account of, its payment of the Settlement Amount pursuant to Bankruptcy Code section 502(h) and Scheduled Claim No. 10305839.
6. Post Kirby will not file any proofs of claim in the Reorganized Debtors' chapter 11 cases, including any claim in connection with Post Kirby's payment of the Settlement Amount, and any such claim shall be deemed immediately expunged without any further Order of the Court.
7. Upon the Consummation Date, any filed or scheduled claims in favor of Post Kirby, including, but not limited to, Scheduled Claim No. 10305839, shall be deemed immediately expunged without any further Order of the Court, and the same shall be reflected as expunged on the claims register maintained for the Debtors' cases.
8. The Settlement Amount shall be retained by the Reorganized Debtors and neither disbursed nor used by them unless such disbursement or use is consistent with the Supplemental Modified Fifth Amended Plan of Affiliated Debtors which was confirmed on July 15, 2004, and as may be amended by further Order of the Bankruptcy Court. This Paragraph does not impose any obligation upon Post Kirby.
9. This Stipulation may be executed in multiple counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same agreement. Subject to Bankruptcy Court approval, this Stipulation shall be binding upon and shall inure to the benefit of the parties hereto and their legal representatives, predecessors, successors and assigns, including any chapter 11 or chapter 7 trustee that may be appointed in the Reorganized Debtors' cases.
10. It is expressly understood and agreed that the terms hereof, including the recital paragraphs and headings, are contractual and that the agreement herein contained and the consideration transferred is to compromise disputed claims and avoid litigation, and that no statement made herein, payment, release or other consideration given shall be construed as an admission by the Parties of any kind or nature.
11. The Bankruptcy Court shall retain exclusive jurisdiction to interpret and enforce the terms of this Stipulation and to resolve any disputes in connection herewith.
So Ordered.