Opinion
Case No. 01-16034 (AJG), Jointly Administered.
May 4, 2005
Russell D. Pollock (Pro Hac Vice), GREENE RADOVSKY MALONEY SHARE LLP, San Francisco, CA, Attorneys for SDC 7.
Martin J. Bienenstock (MB 3001), Brian S. Rosen (BR 0571), David R. Berz (DB 4517), WEIL GOTSHAL MANGES LLP, New York, New York, Attorneys for the Reorganized Debtors.
STIPULATION AND ORDER RESOLVING REORGANIZED DEBTORS' OBJECTION TO PROOF OF CLAIM NO. 2045 FILED BY SDC 7
Enron Corp. ("Enron") and Enron Energy Services North America, Inc. ("EESNA"), as reorganized debtors, and SDC 7, a California partnership. ("SDC," and together with Enron and EESNA, the "Parties"), by and through their respective undersigned counsel, hereby stipulate and agree as follows:
RECITALS:
Procedural Background:
A. On December 2, 2001 (the "Petition Date"), and from time to time thereafter, Enron and certain of its direct and indirect subsidiaries (collectively, the "Debtors") filed voluntary petitions for relief under chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code"). From and after the Petition Date, the Debtors managed and operated their businesses as debtors-in-possession pursuant to Bankruptcy Code sections 1107 and 1108.
B. On July 15, 2004, the Court entered an order (the "Confirmation Order") confirming the Supplemental Modified Fifth Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, dated as of July 2, 2004 (the "Plan"). On November 17, 2004, the Plan became effective and the Debtors emerged from chapter 11 (the "Reorganized Debtors"). SDC's Claim:
C. On or about January 7, 1998, EESNA (f/k/a The Bentley Company) and SDC, entered into a building lease agreement, as amended and supplemented by a "First Lease Addendum" dated September 28, 2000, for certain real property known as Suites 400 and 500 in Building DD at Bishop Ranch, 12647 Alcosta Boulevard, San Ramon, California (the "Lease Agreement").
D. As of EESNA's petition date of January 2, 2002, the Lease Agreement remained in effect, and the Debtors paid SDC two post-petition payments in accordance with EESNA's obligations under the Lease Agreement, including a payment in the amount of $113,491.29 by check #9600045887, dated March 11, 2002 (the "March Payment") as payment for rent and operating expenses for the entire month of March 2002.
E. On March 15, 2002 (the "Rejection Date"), the Debtors effectively rejected the Lease Agreement in accordance with the Court's January 9, 2002 Order Establishing and Authorizing Procedures for the Rejection of Executory Contracts and Unexpired Leases of Nonresidential Real Property.
F. On May 13, 2002, SDC filed Proof of Claim No. 2045 in the amount of $1,015,484.34 in EESNA's chapter 11 case (the "SDC Claim") for damages arising out of the Lease Agreement.
G. On or about January 31, 2005, the Reorganized Debtors filed their Seventy-Eighth Omnibus Objection to the SDC Claim (the "Objection"), pursuant to which the Reorganized Debtors sought to have the SDC Claim reduced and allowed based upon EESNA's right to reimbursement for that portion of the March Payment allocable to the period after the Rejection Date (the "Post-Petition Overpayment").
H. On or about March 1, 2005, SDC filed its response to the Objection (the "Response").
I. The Parties now desire to resolve the Objection and the Response on the terms and conditions provided herein.
AGREEMENT
NOW, THEREFORE, IT IS HEREBY AGREED BY THE PARTIES, BY AND THROUGH THEIR RESPECTIVE COUNSEL, AS FOLLOWS:
1. The SDC Claim shall be reduced and allowed as a Class 32 General Unsecured Claim in the amount of $1,004,501.31 (the "Allowed Claim").
2. SDC shall pay EESNA $50,000 for the Post-Petition Overpayment (the "Reimbursement Obligation") in the manner set forth in paragraph 3 below.
3. Payments and/or distributions on account of the Allowed Claim (the "SDC Distribution") will be made in the manner provided and at the time set forth in the Plan, provided that, the first $50,000 of the SDC Distribution shall be retained by the Reorganized Debtors' estate in satisfaction of SDC's Reimbursement Obligation, and the Reorganized Debtors expressly retain all of their rights and interests in the Reimbursement Obligation in the event that the SDC Distribution is insufficient to satisfy the Reimbursement Obligation in full.
4. All Scheduled Liabilities related to SDC as set forth in the liability schedules filed with the Court are hereby disallowed in their entirety in favor of the Allowed Claim.
5. Enron, EESNA and SDC agree that this Stipulation and Order is the entire understanding of the Parties and is intended to be the complete and exclusive statement of the terms thereof and may not be modified or amended except by a writing signed by all the Parties hereto, which shall be so ordered by the Court.
6. The Stipulation and Order shall become effective and binding as of entry of the Stipulation and Order on the docket as "so ordered" by the Court. In the event that this Stipulation and Order is not approved by the Court, it shall be null and void and have no force and effect.
7. This Court shall retain jurisdiction with respect to any and all issues or disputes that may arise in connection with this Stipulation and Order.
8. This Stipulation and Order shall be binding on the Parties hereto and their respective successors and assigns.
9. This Stipulation and Order may be executed in any number of counterparts and shall constitute one agreement, binding upon all Parties thereto as if all Parties signed the same document; all facsimile signatures shall be treated as originals for all purposes.
SO ORDERED.