Opinion
Case Nos. 01-16034 (AJG) Jointly Administered.
July 22, 2005
Martin J. Bienenstock (MB 3001), Brian S. Rosen (BR 0571), Melanie Gray (admitted pro hac vice), WEIL, GOTSHAL MANGES LLP, New York, Attorneys for the Reorganized Debtors.
Sherry Millman (BC 1876), STROOCK STROOCK LAVAN, LLP, New York, NY, Attorneys for Mizuho Corporate Bank, Ltd.
STIPULATION AND ORDER BETWEEN ENRON CORP., ENRON NORTH AMERICA CORP. AND MIZUHO CORPORATE BANK, LTD. REGARDING PROOF OF CLAIM NUMBERS 10780 AND 11087
Enron Corp. ("Enron"), Enron North America Corp. ("ENA"), and Mizuho Corporate Bank, Ltd. ("Mizuho", and together with Enron and ENA, the "Parties"), by and through their respective counsel do hereby stipulate as follows
RECITALS
A. Commencing on December 2, 2001 (the "Petition Date"), Enron and certain of its affiliated debtor entities (collectively, the "Debtors" or "Reorganized Debtors"), filed voluntary petitions for relief under chapter 11 of title 11 of the Bankruptcy Code. The Debtors' chapter 11 cases were procedurally consolidated for administrative purposes.
B. On July 15, 2004, the Bankruptcy Court entered an order confirming the Debtors' Supplemental Fifth Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, dated as of January 9, 2004, as subsequently modified (the "Plan"). The Effective Date of the Plan was November 17, 2004 and the Reorganized Debtors have emerged from chapter 11.
Factual Background
The descriptions of the various claims herein are for identification purposes only and shall in no way be construed to modify or otherwise affect such claims as they are set forth in the proofs of claim.
C. On October 15, 2002, Mizuho filed claim number 10780 against Enron in an unspecified amount (the "Enron Claim"). The Enron Claim alleges claims as follows:
1. Brazos Office Holdings, L.P. ("Brazos"). An unspecified amount of money in connection with a Credit Agreement, dated as of April 14, 1997, among Brazos Office Holdings, L.P., as borrower, the banks named therein and JPMorgan Chase Bank ("JPMorgan") as agent, and a related guaranty executed by Enron (the "Brazos Claim");
2. Choctaw. An unspecified amount of money in connection with a Credit Agreement, dated as of May 28, 1999, among Choctaw Investors B.V., as borrower, certain lenders thereto, and JPMorgan as administrative agent, and a guaranty and indemnification agreement executed by Enron (the "Enron Choctaw Claim");
3. Zephyrus. An unspecified amount of money in connection with a Funding Agreement, dated as of November 28, 2000, among Zephyrus Investments, LLC., as borrower, certain lenders thereto, and JPMorgan as administrative agent, certain guaranty obligations by Enron, and an Indemnification Agreement dated November 28, 2000, executed by Enron (the "Enron Zephyrus Claim");
4. ETOL II. An unspecified amount of money in connection with (i) certain financing facilities and credit arrangements related to the ISDA Master Agreement, Schedule and Swap Confirmation, each dated as of November 1, 2000 by and between RBS Financial Trading Company Ltd. ("RBSF") and Enron, as amended, (ii) the Term Facility Agreement, dated November 1, 2000, by and among RBSF, The Royal Bank of Scotland ("RBS"), as arranger, the financial institutions parties thereto as lenders and National Westminster Bank plc ("NatWest") as Agent, and (iii) the Term Facility Agreement dated March 30, 2001 by and among RBSF, RBS, as arranger, the financial institutions parties thereto as lenders and NatWest as Agent (the "ETOL Claim");
5. Letter of Credit Agreement. An unspecified amount of money in connection with a U.S. $500,000,000 Letter of Credit and Reimbursement Agreement, dated as of May 14, 2001, among Enron, the banks named therein, JPMorgan and Citibank, N.A. ("Citibank") as Co-Administrative Agents, JPMorgan as Paying Agent and as Issuing Bank (the "Letter of Credit Claim");
The Letter of Credit Claim is claimed twice in the Enron Claim. Accordingly, the defined term "Letter of Credit Claim" encompasses claims by Mizuho for the "Syndicated Letter of Credit" and "Letter of Credit Reimbursement Agreement", as such terms are used in the Enron Claim.
6. Long-Term Revolving Credit Agreement. An unspecified amount of money in connection with a Long-Term Revolving Credit Agreement, dated as of May 18, 2000, among Enron, as borrower, certain lenders thereto, Citibank as paying agent, Citibank and The Chase Manhattan Bank as co-administrative agents (the "Revolving Credit Claim");
7. Cash V. An unspecified amount of money in connection with a Contractual Asset Sale Agreement, dated as of June 30, 1997, among Enron Cash Company, No. 5, Enron Power Marketing, Inc., Barclays Bank Plc. ("Barclays"), as administrative agent, and State Street Bank and Trust Company of Connecticut, N.A. ("SSB"), as trustee, and a Performance Guaranty executed by Enron on June 30, 1997 (the "Cash V Claim");
The Reorganized Debtors assert that the Cash V Claim is duplicative of proof of claim number 24629 filed by Barclays Bank PLC, as agent. Accordingly, the Objection (as defined below) does not raise any issues or objections to the Cash V Claim.
8. White Pine (Motown). An unspecified amount of money in connection with an ISDA Master Agreement, dated as of March 31, 2000, among KBC Bank N.V. ("KBC"), as agent, and Enron, and a Certain Total Return Swap Confirmation dated April 10, 2000 (the "Motown Claim");
9. Flagstaff. An unspecified amount of money in connection with (i) a Credit and Security Agreement, dated June 22, 2001, among Flagstaff Capital Corporation, as borrower, certain lenders thereto, and JPMorgan as administrative and collateral agent, and (ii) various other related agreements and documents thereto (the "Enron Flagstaff Claim");
10. Miscellaneous Tort Claims. Certain unliquidated claims based on (i) constructive trust, (ii) damages, attorney's fees, expenses and costs including for or based upon (a) fraud, (b) misrepresentation, (c) subrogation, (d) indemnity, (e) contribution, (f) unjust enrichment, (g) constructive trust, (h) fraudulent conveyance, (i) failure to fulfill contractual and fiduciary obligations, (j) breach of implied covenants of good faith and fair dealing, (k) negligent undertaking, (l) making, causing or permitting to be made misleading statements regarding the businesses or financial condition of the Reorganized Debtors, (m) failure to take prudent and appropriate action regarding adverse business conditions affecting the business operation of the Reorganized Debtors, and (n) failure to require adequate financial and accounting controls for the Reorganized Debtors (collectively, the "Enron Tort Claims").
D. On October 11, 2002, Mizuho filed claim number 11087 against ENA in an unspecified amount (the "ENA Claim", and together with the Enron Claim, the "Claims"). The ENA Claim alleges claims as follows:
a. Choctaw. An unspecified amount of money in connection with a Credit Agreement, dated as of May 28, 1999, among Choctaw Investors B.V., as borrower, certain lenders thereto, and JPMorgan as administrative agent, and a guaranty and indemnification agreement executed by Enron (the "ENA Choctaw Claim" and together with the Enron Choctaw Claim, the "Choctaw Claims");
b. Zephyrus. An unspecified amount of money in connection with a Funding Agreement, dated as of May 28, 2000, among Zephyrus Investments, LLC., as borrower, certain lenders thereto, and JPMorgan as administrative agent, certain guaranty obligations by Enron, and an Indemnification Agreement dated November 28, 2000, executed by Enron (the "ENA Zephyrus Claim" and together with the Enron Zephyrus Claim, the "Zephyrus Claims");
c. Flagstaff. An unspecified amount of money in connection with (i) a Credit and Security Agreement, dated June 22, 2001, among Flagstaff Capital Corporation, as borrower, certain lenders thereto, and JPMorgan as administrative and collateral agent, and (ii) various other related agreements and documents thereto (the "ENA Flagstaff Claim" and together with the Enron Flagstaff Claim, the "Flagstaff Claims");
Enron alleges that the Flagstaff Claims are duplicative of proof of claim numbers 11151, 11153 and 11154 filed by JPMorgan, as agent. The Reorganized Debtors reserve their right to file a separate, limited objection to claims related to the Flagstaff/Slapshot Financing Transaction, including claims filed by JPMorgan and Mizuho. Accordingly, this Objection does not raise any issues or objections to the Flagstaff Claims.
d. Miscellaneous Tort Claims. Certain unliquidated claims based on (i) constructive trust, (ii) damages, attorney's fees, expenses and costs including for or based upon (a) fraud, (b) misrepresentation, (c) subrogation, (d) indemnity, (e) contribution, (f) unjust enrichment, (g) constructive trust, (h) fraudulent conveyance, (i) failure to fulfill contractual and fiduciary obligations, (j) breach of implied covenants of good faith and fair dealing, (k) negligent undertaking, (l) making, causing or permitting to be made misleading statements regarding the businesses or financial condition of the Reorganized Debtors, (m) failure to take prudent and appropriate action regarding adverse business conditions affecting the business operation of the Reorganized Debtors, and (n) failure to require adequate financial and accounting controls for the Reorganized Debtors (collectively, the "ENA Tort Claims" and together with the Enron Tort Claims, the "Tort Claims").
Proofs of Claims Filed by the Agents
E. On October 11, 2002, JPMorgan, as agent, filed claim numbers 11224 and 11225 against Enron, each in the amount $284,500,000, in connection with the Brazos financing transaction (collectively, the "JPMorgan Brazos Claim"). The Brazos Claim filed by Mizuho against Enron is included in, and duplicative of, the JPMorgan Brazos Claim.
F. On October 11, 2002, JPMorgan, as agent, filed claim numbers 11125, 11126, 11127, 11128, 11129, 11130, 11133, 11134 and 11135 against Enron in connection with the Choctaw and Zephyrus financing transactions (the "JPMorgan Choctaw/Zephyrus Claims"). The Choctaw Claims and Zephyrus Claims filed by Mizuho against Enron and ENA are included in, and duplicative of, the JPMorgan Choctaw/Zephyrus Claims.
G. On October 11, 2002, NatWest, as agent, filed claim number 10906 against Enron in the amount of $237,731,494.96 in connection with the ETOL II financing transaction (the "NatWest ETOL Claim"). The ETOL Claim filed by Mizuho against Enron is included in, and duplicative of, the NatWest ETOL Claim.
H. On October 11, 2002, JPMorgan, as agent, filed claim number 11166 against Enron in the amount of $374,456,329.00 in connection with the Letter of Credit (the "JPMorgan Letter of Credit Claim"). The Letter of Credit Claim filed by Mizuho against Enron is included in, and duplicative of, the JPMorgan Letter of Credit Claim.
I. On October 15, 2002, Citibank, as agent, filed claim number 14179 against Enron in the amount of $1,253,196,000 in connection with the Long-Term Revolving Credit Agreement (the "Citibank Revolving Credit Claim"). The Revolving Credit Claim filed by Mizuho is included in, and duplicative of, the Citibank Revolving Credit Claim.
J. On October 11, 2002, KBC, as agent, filed claim number 11976 against Enron in the amount of $63,146,224.84 in connection with the Motown financing transaction (the "KBC Motown Claim"). On June 20, 2005, the Court entered an order approving a settlement agreement between KBC, as agent, and the Reorganized Debtors (the "KBC Stipulation", Docket No. 26177). Pursuant to the KBC Stipulation, the Motown Claims were deemed withdrawn and expunged with prejudice.
K. The JPMorgan Brazos Claim, JPMorgan Choctaw/Zephyrus Claims, NatWest ETOL Claim, JPMorgan Letter of Credit Claim, Citibank Revolving Credit Claim and KBC Motown Claim are collectively referred to herein as the "Agent Claims."
The Agent Claims include alleged claims purportedly asserted by all beneficial holders, including the Withdrawn Claims asserted by Mizuho (defined below).
Objection to the Claims
L. On March 3, 2005, the Reorganized Debtors filed an objection to certain of the Claims, as more fully set forth therein (the "Objection", Docket No. 24028). The Objection alleged that certain portions of the Claims should be disallowed and expunged because such claims are either duplicative of the Agent Claims and/or do not assert any legitimate claims, as defined in the Bankruptcy Code.
M. The Parties have actively engaged in arms-length negotiations to resolve the Claims and have reached a good faith settlement for the treatment of the Claims, pursuant to the terms set forth below. Enron submits that this proposed resolution will benefit Enron and ENA's estates by eliminating unnecessary litigation costs and expenses.
N. NOW, THEREFORE, in consideration of the forgoing, and other good and valuable consideration the sufficiency and adequacy of which is hereby acknowledged by the Parties, the Parties, by their undersigned counsel, stipulate and agree as follows:
AGREEMENT
1. The Recitals are fully incorporated herein by reference.
2. With the exception of the Flagstaff Claims, Cash V Claims and Motown Claim, the remaining portions of the Claims are deemed withdrawn and expunged with prejudice as duplicative of the Agent Claims (the "Withdrawn Claims").
3. This Stipulation and Order is without prejudice to any claims, rights or defenses asserted in the Agent Claims and shall not operate as an admission, waiver or election of remedies with respect to any such claims.
4. The Objection is deemed withdrawn.
5. This Stipulation and Order may be executed in any number of counterparts or with detachable signature pages 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.
6. This Stipulation and Order shall be governed by the Bankruptcy Court and the laws of the State of New York, without giving effect to its conflict of law provisions. The Bankruptcy Court shall retain jurisdiction over any disputes arising hereunder.
7. This Stipulation and Order sets forth the entire understanding of the Parties pertaining to the subject matter hereof 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 Parties that is so-ordered by the Bankruptcy Court.