Opinion
Case No. 01-16034 [AJG], Jointly Administered
December 11, 2003
Albert Togut, Neil Berger, Christopher D. Lagow, TOGUT, SEGAL SEGAL LLP, New York, NY, for Debtors and Debtors in Possession
ROBERT GONDERINGER, ESQ., ANDERSON GONDERINGER LLC, Omaha, Nebraska, for ADESTA COMMUNICATIONS, INC.
STIPULATION AND ORDER REGARDING REJECTION OF AGREEMENT WITH ADESTA COMMUNICATIONS, INC.
WHEREAS, on December 2, 2001 (the "Petition Date"), Enron Corp. ("Enron") and certain of Enron's subsidiaries (collectively, the "Debtors") filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code with this Court. The Debtors continue to manage their businesses and properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code; and
WHEREAS, prior to the Petition Date, on April 6, 2001, EBS and Adesta Communications, Inc. ("Adesta") entered into to that certain Agreement for Duct Construction and Transfer (the "Agreement"); and
WHEREAS, pursuant to the Agreement (i) EBS constructed a fiber optic communications system on a segment which extends from 23751 East 6th Avenue, Aurora, Colorado, westward to a point near 1-225 and 6th Avenue in Denver, Colorado, as depicted and described in Attachment A, Part 1 to the Agreement (the "EBS Denver Segment") and (ii) Adesta constructed a fiber optic communications system on a segment which extends from 910 15th Street in Denver, Colorado, towards the western endpoint of the EBS Denver Segment, near 1-225 and 6th Avenue in Denver, as depicted and described in Attachment A, Part 2 to the Agreement (the "Adesta Denver Segment"); and
WHEREAS, a portion of the Adesta Denver Segment was constructed on a Colorado Department of Transportation right of way located at the intersection of 13th Street and 1-225, south along 1-225 to the intersection of 1-225 and 6th Avenue approximately 3792 feet, as depicted and described in Attachment A to the Agreement (the "CDOT Segment"); and
WHEREAS, the EBS Denver Segment and the Adesta Denver Segment (collectively, the "Duct System") consists of two ducts, each containing seven innerducts, and associated fiber and equipment; and
WHEREAS, the Agreement provides that upon completion of the construction of the Duct System: (i) EBS would convey to Adesta, in the EBS Denver Segment: (a) an undivided 4/7 interest in one duct, and a 100% interest in four innerducts in such duct, and (b) a 100% interest in the other duct and all seven innerducts in such duct (the property described in the foregoing clause (i) is herein collectively the "EBS Deliverables"); (ii) Adesta would convey to EBS, in the Adesta Denver Segment (excluding any portion of the CDOT Segment): (a) an undivided 3/7 interest in one duct (being joined to and the same duct as, the duct in which EBS conveys the 4/7 interest to Adesta in the EBS Denver Segment), and (b) a 100% interest in three innerducts in such duct, being joined to the same three innerducts retained by EBS from is conveyance to Adesta; and (iii) Adesta would grant to EBS an exclusive indefeasible right to use an undivided 3/7 interest in the duct referenced immediately above and three innerducts all in the CDOT Segment, with those three innerducts being contiguous with the duct that contains the three innerducts retained by EBS from its conveyance to Adesta (the property described in the foregoing clauses (i) and (ii) is herein collectively the "Adesta Deliverables"); and
WHEREAS, the Agreement provides that Adesta will perform the ordinary and customary maintenance of the Duct System, for a fee to be paid by EBS to Adesta in the amount of $625 per mile, per year; which totals $12,012.21 annually and
WHEREAS, on May 1, 2003, EBS filed a Notice of Rejection of the Agreement (the "Notice of Rejection"), in which EBS sought to reject the Agreement pursuant to section 365 of the Bankruptcy Code; and
WHEREAS, on May 14, 2003, following discussions with Adesta, EBS withdrew the Notice of Rejection; and
WHEREAS, after further discussions with Adesta failed to result in an amicable resolution, on October 7, 2003 EBS again filed a Notice of Rejection (the "Second Notice") for the Agreement; and WHEREAS, Adesta has indicated that it will object to the Second Notice if it does not receive the Bill of Sale for the EBS Deliverables, as described in the Agreement; and
WHEREAS, EBS and Adesta now desire to resolve all disputes between them regarding the Second Notice and the Agreement as provided in this Stipulation and Order.
NOW, THEREFORE, IT IS HEREBY STIPULATED, CONSENTED TO AND AGREED by and between the parties hereto as follows:
1. This Stipulation shall be effective upon the date it is "So Ordered" by the Bankruptcy Court (the "Effective Date").
2. The Agreement shall be deemed (a) rejected pursuant to section 365 of the Bankruptcy Code as of the date of the Second Notice and (ii) terminated by mutual agreement of EBS and Adesta.
3. On the Effective Date, EBS shall, and hereby does, convey all of its rights in the EBS Deliverables to Adesta.
4. On the Effective Date, Adesta shall, and hereby does, convey all of its rights in the Adesta Deliverables to EBS.
5. This Stipulation shall operate as a Bill of Sale, as required by the Agreement and may be relied upon by third parties as conclusive evidence of the conveyance of rights described above, free and clear of all liens, claims and encumbrances.
6. On the Effective Date, EBS will release Adesta and its affiliates from any and all claims related to the Agreement.
7. On the Effective Date, Adesta will release EBS and its affiliates from any and all administrative expense claims related to the Agreement.
8. Adesta is entitled to file a proof of claim, with respect to the Agreement, solely for rejection damages. Any such claim must be filed within thirty (30) days of the Effective Date and will remain subject to the Debtors right to object to the amount of such claim.
9. The Debtors reserve the right to object to the amount of such claim.
10. Each of the Parties represent and warrant that the person executing this Stipulation is authorized to do so on its behalf without further or other consents or authorizations.
11. In the event that the Bankruptcy Court declines to approve this Stipulation, the terms and provision and the agreements contained herein shall be deemed null and void and shall have no evidentiary basis whatsoever.
12. This Stipulation is the result of good faith, arms length negotiations, constitutes the entire agreement and understanding between EBS and Adesta pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements (whether written or oral) of the parties.
13. This Stipulation may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same agreement. Facsimile signatures shall be deemed to be original signatures for all purposes.
14. The parties hereto shall be responsible for their respective costs and expenses (including, without limitation, attorneys' fees) incurred by it in negotiating, drafting and obtaining approval of the terms of this Stipulation and shall not be responsible for the payment of any such fees or costs incurred by any other party hereto.
15. The Debtors will promptly seek approval of this Stipulation.
16. This Stipulation shall be governed by, interpreted and enforced by the United States Bankruptcy Court for the Southern District of New York in accordance with the laws of the State of New York.
17. This Stipulation may be amended by the parties hereto without further order of the court; provided, however, that, in connection therewith, the parties shall obtain the prior written consent of the Official Committee of Unsecured Creditors, which consent shall not be unreasonably withheld; and provided, however, that any such amendment shall neither be material in nature nor change the economic substance of the terms hereof. The parties are authorized and agree to execute any and all documents deemed reasonably necessary to further evidence or document the terms of this Stipulation.
18. This Stipulation shall be binding upon and inure to the assigns, representatives, heirs, and successors of the parties hereto.
SO ORDERED.