Opinion
Case No. 01-16034 (AJG), Jointly Administered.
May 18, 2005
Timothy W. Wash (TW-7409), John McNicholas (JM-0694), DLA PIPER RUDNICK GRAY CARY US LLP, New York, New York, ATTORNEYS FOR WERRA PAPIER WERNSHAUSEN GMBH.
Martin J. Bienenstock (MB 3001), Brian S. Rosen (BR 0571), Melanie Gray (Pro Hac Vice), WEIL GOTSHAL MANGES LLP, New York, New York, ATTORNEYS FOR THE REORGANIZED DEBTORS.
Enron Corp. ("Enron") and Enron Capital Trade Resources International Corp. ("ECTRIC"), as Reorganized Debtors, and Werra Papier Wernshausen GmbH ("Creditor", and together with Enron and ECTRIC 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" or "Reorganized 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 and through the Effective Date (defined below), 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 "Effective Date"), the Plan became effective, and the Reorganized Debtors emerged from chapter 11.
The Motion and the Proof of Claim:
C. On or about November 20, 2003, Creditor filed a motion seeking an order compelling ECTRIC to pay Creditor an administrative expense of $1,040,282.35 (the "Motion"). ECTRIC objected to the Motion on the grounds that Creditor was not entitled to administrative priority treatment under sections 507 or 503 of the Bankruptcy Code (the "Objection"). Creditor filed a response to the Objection and increased the amount of its request to the amount of $1,164,341.39. A hearing was held on the Motion, and following the hearing, the Court took the Motion and Objection under advisement.
D. On or about August 13, 2004, Creditor filed Proof of Claim No. 25022 against ECTRIC (the "Claim"). The Claim was filed in the amount of $1,164,341.39 (plus additional unliquidated amounts for administrative expenses and/or rejection damages) and is allegedly based upon the rejection of a Commodity Swap Agreement entered into on November 8, 2000, between ECTRIC and Creditor (the "Swap Agreement"). Pursuant to the Swap Agreement, Creditor agreed to make fixed monthly payments to ECTRIC for pulp paper and ECTRIC agreed to make variable monthly payments to Creditor as provided in the Swap Agreement. The Claim allegedly represents only those amounts allegedly owed to Creditor from the Petition Date through February 2004. On March 8, 2005, ECTRIC filed the Reorganized Debtors' Objection to Proof of Claim No. 25022 Filed by Werra Papier Wernshausen GmbH (the "Debtor's Objection").
E. The Parties now desire to resolve the Motion, the Claim, the Objection, the Debtor's Objection, and provide for the allowance of the Claim on the terms and conditions provided herein.
NOW, THEREFORE, IT IS HEREBY AGREED BY THE PARTIES, BY AND THROUGH THEIR RESPECTIVE COUNSEL, AS FOLLOWS:
1. Following good faith negotiations between the Parties, Creditor has agreed to have the Claim treated as an allowed unsecured claim in ECTRIC's chapter 11 case as provided below. The Reorganized Debtors' agreement to allowance of the Allowed Claim (defined below) shall therefore fully and finally resolve the Objection, the Motion, the Debtor's Objection and all claims between the Parties under all contracts and agreements between the Parties, including, without limitation, the Swap Agreement.
2. Upon the Stipulation Effective Date (as defined below), Proof of Claim No. 25022 shall immediately be allowed (the "Allowed Claim") as a Class 42 General Unsecured Claim (as defined in the Plan) against ECTRIC in the agreed amount of $1,450,000 with all deductions and setoffs deemed to have been taken or made. All Scheduled Liabilities related to Creditor as set forth in the liability schedules filed with the Court by ECTRIC are hereby disallowed in their entirety in favor of the Allowed Claim. Payments and/or distributions on account of the Allowed Claim will be made in the manner provided and at the time set forth in the Plan.
3. Enron, ECTRIC and Creditor agree that this Stipulation and Order (i) resolves all disputes between the Parties including those relating to the Objection, the Motion, the Debtor's Objection, and the Claim; (ii) is the entire understanding of the Parties; (iii) is intended to be the complete and exclusive statement of the terms thereof; and (iv) may not be modified or amended except by a writing signed by all the Parties hereto, which shall be so ordered by the Court.
4. On the Stipulation Effective Date (as defined below), Creditor and ECTRIC, on behalf of themselves and on behalf of their respective predecessors, successors, parent corporations, attorneys, representatives, subsidiaries, and any person or entity claiming through or under each of them, hereby expressly release and forever discharge each other from any and all actions, causes of action, complaints, claims, demands, obligations, rights, damages, costs, loss of services, expenses, compensation or judgments of any kind or nature whatsoever, whether known or unknown, direct or indirect, contingent or fixed, created by, on account of, arising from or by reason of any and all known and unknown, foreseen and unforeseen damages and any consequences thereof, resulting, or to result in the future from or in any way related to the Motion, Objection, the Debtor's Objection, the Claim and any contracts and transactions related thereto.
5. 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 (the "Stipulation Effective Date"). 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.
6. On the Stipulation Effective Date, the Motion shall be deemed to be withdrawn with prejudice, without the need for any further action being taken.
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.
SO ORDERED.