Opinion
Case No. 01-16034 (AJG) Jointly Administered.
July 18, 2005
Luc A. Despins (LD 5141), Matthew S. Barr (MB 9170), James H. MacInnis (JM 5947), MILBANK, TWEED, HADLEY McCLOY LLP, New York, New York, Attorneys for Reorganized Debtors.
Jordi Guso, Debi Evans Galler, BERGER SINGERMAN, P.A., Miami, Florida, Attorney for Lake Worth Generation, L.L.C.
This stipulation and consent order (the "Stipulation and Consent Order") is entered into by and between (i) EPC Estate Services, Inc. (f/k/a National Energy Production Corporation) ("NEPCO") and (ii) Lake Worth Generation, L.L.C. ("LWG"). NEPCO and LWG are jointly referred to herein as the "Parties."
RECITALS
A. NEPCO Bankruptcy Cases. On May 20, 2002 (the "Petition Date"), NEPCO filed a voluntary petition under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101- 1330 (as amended, the "Bankruptcy Code"), in the United States Bankruptcy Court for the Southern District of New York (the "NEPCO Bankruptcy Court"). The chapter 11 cases of NEPCO and certain affiliated entities, including Enron Corp., are being jointly administered for procedural purposes only (collectively, the "Enron Bankruptcy Cases").
B. Confirmation of Enron Plan. By order, dated July 15, 2004 (the "Confirmation Order"), the NEPCO Bankruptcy Court confirmed the Supplemental Modified Fifth Amended Joint Plan Of Affiliated Debtors Pursuant To Chapter 11 Of The United States Bankruptcy Code (as amended, the "Plan"). The Effective Date (as defined in the Plan) of the Plan occurred on November 17, 2004. Paragraph 60(e) of the Confirmation Order provides that the Court retains jurisdiction "to hear and determine any timely objections to Administrative Expense Claims . . . after the Confirmation Date, . . . and to allow, disallow, determine, liquidate, classify, estimate or establish priority of or secured or unsecured status of any Claim, in whole or in part."
C. LWG Bankruptcy Cases. On April 16, 2003, LWG filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (the "LWG Bankruptcy Cases") in the United States Bankruptcy Court for the Southern District of Florida (the "LWG Bankruptcy Court"). The LWG plan of reorganization was confirmed by the LWG Bankruptcy Court and became effective on December 21, 2004.
D. EPC Agreement. On June 11, 2001, the Parties entered into that certain Turnkey Lump Sum Engineering, Procurement and Construction Agreement for the Lake Worth Electrical Generation Facility (the "EPC Agreement"). Under the EPC Agreement, NEPCO agreed to, among other things, provide engineering, procurement, construction and related services in connection with the erection of a proposed electric generating facility in or near the City of Lake Worth, Florida (the "Proposed Facility"). After construction of the Proposed Facility commenced, LWG sent NEPCO a notice of termination dated December 3, 2001 (the "EPC Agreement Termination Notice").
E. Transition Agreement. Two days after delivering the EPC Agreement Termination Notice, LWG entered into a Transition Agreement, dated December 5, 2001, with NEPCO (the "Transition Agreement"), providing for, among other things, a transition of work on the Proposed Facility from NEPCO to LWG or its assignee. LWG allegedly terminated the Transition Agreement by notice to NEPCO dated April 22, 2002 (the "Transition Agreement Termination Notice").
F. LWG Claim. On October 15, 2002, LWG filed proof of claim number 19011 against NEPCO (the "LWG Claim") in the amount of $73,537,820. LWG did not file any other claims in the Enron Bankruptcy Cases.
G. Estimation Order. On February 18, 2004, the NEPCO Bankruptcy Court entered that certain Order, Pursuant To Sections 105(a), 363(b) And 502(c) Of The Bankruptcy Code And Federal Rules Of Bankruptcy Procedure 3018, 7042 And 9019, (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 (Docket No. 16353) (the "Estimation Order").
H. Estimation Objection. On January 27, 2005, NEPCO filed the Objection Of EPC Estate Services, Inc. to Proof Of Claim No. 19011 filed By Lake Worth Generation, L.L.C. Pursuant To Claims Estimation Procedures (Estimation Objection Number 18) (Docket No. 23253) (the "Estimation Objection"). The Estimation Objection invoked the procedures contained in the Estimation Order.
I. Statement of Claim. On April 18, 2005, LWG served Lake Worth Generation's Statement Of Claim (No. 18) in response to the Estimation Objection.
J. LWG Bankruptcy Court Approval. On May 26, 2005, LWG filed the Motion To Approve Compromise And Settlement With NEPCO with the LWG Bankruptcy Court. On June 21, 2005, the LWG Bankruptcy Court entered that certain Order Granting Motion To Approve Compromise And Settlement With NEPCO (the "Settlement Order," attached hereto as Exhibit A). Pursuant to the Settlement Order, LWG is authorized to settle the LWG Claim in accordance with settlement embodied herein.
K. NEPCO has reviewed the LWG Claim to determine whether and to what extent it should be allowed. Based on its review, NEPCO disputes the validity and merits of the LWG Claim as alleged. However, to avoid the cost, uncertainty and delay that would attend litigation, the Parties negotiated a consensual resolution of the LWG Claim, such that LWG will have an Allowed General Unsecured Claim (as defined in the Plan) in Class 67 (National Energy Production Corporation) in the amount of $13,601,352.
AGREEMENT
NOW, THEREFORE, in consideration for the mutual covenants and agreements set forth in the Stipulation and Consent Order, and with the intent to be legally bound, it is hereby agreed between the Parties as follows, and binding on all parties in interest in the NEPCO Bankruptcy cases and the LWG Bankruptcy Cases as of the Effective Date (as defined below) of this Stipulation and Consent Order:
1. Allowed Claim. Claim 19011 shall be deemed an Allowed General Unsecured Claim against NEPCO (Class 67) under the Plan in the amount of $13,601,352.
2. Withdrawal of Objection. The Estimation Objection shall be deemed withdrawn on the Effective Date.
3. Binding Nature. This Stipulation and Consent Order (i) shall inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns and (ii) shall be binding upon and enforceable against the Parties and their respective successors and assigns as of the Effective Date.
4. Court Approval. Notwithstanding anything to the contrary herein, this Stipulation and Consent Order is expressly subject to and contingent upon its approval by the NEPCO Bankruptcy Court. If this Stipulation and Consent Order, or any portion hereof, is not approved by the Court or if it is overturned or modified on appeal, this Stipulation and Consent Order shall be of no further force and effect, and, in such event, neither this Stipulation and Consent Order nor any negotiations and writings in connection with this Stipulation and Consent Order shall in any way be construed as or deemed to be evidence of or an admission on behalf of any Party hereto regarding any claim or right that such Party may have against any other party hereto.
5. Release Of NEPCO Released Parties By LWG Releasing Parties. Upon the occurrence of the Effective Date, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, LWG on behalf of itself, its predecessors, and, to the extent they have the authority or capacity, its present and former shareholders, officers, directors, employees, partners, agents, representatives, subsidiaries, affiliates, successors and assigns (collectively, the "LWG Releasing Parties"), hereby unequivocally release and forever discharge NEPCO, and any of its respective predecessors, affiliates, successors, assigns, trustees, agents, consultants, heirs, directors, officers, employees, shareholders, executives, servants, attorneys, accountants, partners, representatives and other related persons and entities, in any capacity whatsoever (collectively, the "NEPCO Released Parties"), from any and all rights, claims, demands, actions, liabilities, causes of action, costs, losses, liens, debts, damages, dues, accounts, sum or sums of money, covenants, contracts, agreements, expenses, judgments, extents, executions, awards, bonds, bills, specialties, reckonings, demands and suits of every nature, kind and description whatsoever, either at law, in admiralty, in equity or otherwise, whether known or unknown, foreseen or unforeseen, suspected or unsuspected, fixed or contingent, disclosed or undisclosed, matured or un-matured, material or immaterial, whether individual, class, derivative or representative, and whether or not asserted or raised and existing, or alleged to exist or to have existed (collectively, the "Claims"), which any of the LWG Releasing Parties ever had, now have or may have against the NEPCO Released Parties arising out of, in connection with or relating to the LWG Claim, the Proposed Facility, the EPC Agreement or the Transition Agreement, but excluding any Claims arising out of, in connection with or relating to this Stipulation and Consent Order.
6. Release Of LWG Released Parties By NEPCO Releasing Parties. Upon the occurrence of the Effective Date, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, NEPCO, on behalf of itself, its predecessors, and, to the extent they have the authority or capacity, its present and former shareholders, officers, directors, employees, partners, agents, representatives, subsidiaries, affiliates, successors and assigns (collectively, the "NEPCO Releasing Parties"), hereby unequivocally release and forever discharge LWG, and any of its respective predecessors, affiliates, successors, assigns, trustees, agents, consultants, heirs, directors, officers, employees, shareholders, executives, servants, attorneys, accountants, partners, representatives and other related persons and entities, in any capacity whatsoever (collectively, the "LWG Released Parties"), from any and all Claims which any of the NEPCO Releasing Parties ever had, now have or may have against the LWG Released Parties arising out of, in connection with or relating to the LWG Claim, the Proposed Facility, the EPC Agreement or the Transition Agreement, but excluding any Claims arising out of, in connection with or relating to this Stipulation and Consent Order.
7. Non-Severability. The provisions of this Stipulation and Consent Order are mutually interdependent, indivisible and non-severable.
8. Entire Agreement. This Stipulation and Consent Order constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof and supersedes all prior Stipulation and Consent Orders and understandings, written and oral, between the Parties with respect to the subject matter hereof. This Stipulation and Consent Order may not be modified or amended except by a writing signed by the Parties. All representations, warranties, promises, inducements or statements of intention made by the Parties hereto are embodied in this Stipulation and Consent Order, and no Party hereto shall be bound by, or liable for, any alleged representation, warranty, inducement or statement of intention that is not expressly embodied herein. The Parties represent and warrant that this Stipulation and Consent Order discloses all of the terms of the Parties' agreement with respect to the subject matter hereof.
9. Counterparts; Effective Date. This Stipulation and Consent Order may be executed in one or more counterparts and by facsimile, all of which shall be considered one and the same agreement. A facsimile copy of this Stipulation and Consent Order reflecting an original signature of one or more of the Parties shall be fully binding on, and in effect to, said Party or Parties to the same effect as a signed original of the Stipulation and Consent Order; provided, however, that the effective date of this Stipulation and Consent Order (the "Effective Date") shall be the date on which the NEPCO Bankruptcy Court has entered a final non-appealable order approving the Stipulation and Consent Order.
10. Authority. The Parties hereto represent and warrant to each other that: (i) the signatories to this Stipulation and Consent Order are authorized to execute this Stipulation and Consent Order; (ii) each has full power and authority to enter into this Stipulation and Consent Order; and (iii) this Stipulation and Consent Order is duly executed and delivered, and constitutes a valid and binding agreement in accordance with its terms. LWG hereby represents and warrants that LWG is the lawful holder of Claim No. 19011 and has not and will not transfer such claim to any party, unless any such party to which the Claim is sold or otherwise transferred (the "Transferee") agrees to be bound by this Stipulation and Consent Order. Moreover, this Stipulation and Consent Order shall be binding on any Transferee and any subsequent transferee.
11. Costs. Each Party hereto shall bear its own expenses incurred in connection with the negotiation, execution and Court approval of this Stipulation and Consent Order.
12. Governing Law. This Stipulation and Consent Order shall be governed by, and construed in accordance with, the Bankruptcy Code and the laws of the state of New York, without regard to any principles of choice of law thereof which would require the application of the law of any other jurisdiction.
13. Retention of Jurisdiction. The NEPCO Bankruptcy Court shall retain exclusive jurisdiction to interpret, implement and enforce the provisions of this Stipulation and Consent Order, and the Parties hereby consent to exclusive jurisdiction of the NEPCO Bankruptcy Court with respect thereto. The Parties waive arguments of lack of personal jurisdiction or forum non-conveniens with respect to the NEPCO Bankruptcy Court.
14. Headings. The descriptive headings of the several sections of this Stipulation and Consent Order are inserted for convenience of reference only and do not constitute a part of this Stipulation and Consent Order.
IN WITNESS WHEREOF, the Parties have executed this Stipulation and Consent Order on July 6, 2005.
So Ordered.
EXHIBIT A ORDER GRANTING MOTION TO APPROVE COMPROMISE AND SETTLEMENT WITH NEPCO
THE MATTER came before the Court on upon Joseph J. Luzinski, Liquidating Trustee for Lake Worth Generation, LLC (the Liquidating Trustee") Motion to Approve Compromise and Settlement with NEPCO. ("Motion"). The Court has reviewed the Motion, the Court file, and finds that adequate notice of the Motion was provided, that the terms of the settlement are fair and reasonable, and being otherwise duly advised in the premises, finds that good cause exists to grant the relief requested in the Motion. Accordingly, the Court ORDERS:
1. The Motion is GRANTED.
2. The Motion is GRANTED as modified by this Order.
3. The Liquidating Trustee is authorized to settle NEPCO's objection to its proof of claim filed in the NEPCO bankruptcy case by reducing amending its proof of claim to an unsecured claim in the amount of $13,601,352.00.
ORDERED.