Opinion
Case No. 01-16034 (AJG), Jointly Administered.
June 6, 2005 June 7, 2005
WEIL, GOTSHAL MANGES LLP, David R. Berz (DB-4517), New York, New York, Attorneys for the Reorganized Debtors.
CHADBOURNE PARKE LLP, Howard Seife (HS-7995), A Member of the Firm, New York, New York, Attorneys for the Sureties.
This Stipulation (the "Stipulation") is entered into by and among St. Paul Fire and Marine Insurance Company ("St. Paul") and Travelers Casualty and Surety Company of America ("Travelers" and, together with St. Paul, the "Sureties" and each individually, a "Surety") and Enron Corp. and affiliated reorganized debtor entities (collectively, the "Reorganized Debtors" and, together with the Sureties, the "Parties").
RECITALS
WHEREAS, commencing on December 2, 2001 (the "Petition Date"), and periodically thereafter, Enron Corp. and its affiliated debtor entities (prior to the Effective Date, the "Debtors") filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code;
WHEREAS, the Debtors' chapter 11 cases were procedurally consolidated for administrative purposes, and prior to emergence from chapter 11, the Debtors continued to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code; WHEREAS, 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 July 2, 2004 (the "Plan");
WHEREAS, the Plan became effective on November 17, 2004 (the "Effective Date"), and the Reorganized Debtors emerged from chapter 11;
WHEREAS, the Sureties issued surety bonds prior to the Petition Date on behalf of certain of the Debtors for the benefit of various obligees (the "Surety Bonds");
WHEREAS, Enron Corp. entered into a General Indemnity Agreement ("GIA") with the Sureties related to the Surety Bonds;
The equivalent of the GIA between Enron and Travelers was known as the General Contract of Indemnity. However, for purposes of convenience in this Stipulation, the term GIA shall represent both the St. Paul General Indemnity Agreement and Travelers' General Contract of Indemnity.
WHEREAS, the Sureties filed numerous proofs of claim against the Debtors arising from the Surety Bonds and the GIA (the "Original Surety Claims");
WHEREAS, certain of the Original Surety Claims include claims in connection with or with respect to certain Surety Bonds issued that concern particular obligations of certain Debtors to Mahonia Ltd. or Mahonia Natural Gas Ltd. (the "Mahonia Bonds");
WHEREAS, the Original Surety Claims related to the Mahonia Bonds include claims for payments of principal (the "Mahonia Bond Payment Claims") and claims for fees and/or expenses incurred (the "Mahonia Fee Claims");
WHEREAS, each Surety assigned and transferred its Mahonia Bond Payment Claims to JPMorgan Chase Bank ("JPMC") pursuant to (i) the Agreement for Assignment of Bankruptcy Claim, dated as of January 8, 2003 between St. Paul, as assignor, and JPMC, as assignee (the "St. Paul Assignment"), and (ii) the Agreement for Assignment of Bankruptcy Claim, dated as of January 8, 2003 between Travelers, as assignor, and JPMC, as assignee (the "Travelers Assignment" and, together with the St. Paul Assignment, the "Mahonia Bond Assignments"). The Mahonia Fee Claims and all other claims other than the Mahonia Bond Payment Claims have been retained by the Sureties and were not assigned to JPMC (the "Retained Claims");
WHEREAS, the Mahonia Bond Assignments resulted in the partial transfer of those Original Surety Claims related to the Mahonia Bond Payment Claims represented by proof of claim numbers 12620, 13073 and 12623 (partially assigned by St. Paul), and proof of claim numbers 13070, 13130, and 13059 (partially assigned by Travelers). These Original Surety Claims were amended and superceded by proof of claim numbers 25167, 25138, and 25139 (respectively amended by St. Paul) and 25188, 25187, and 25186 (respectively amended by Travelers) (collectively, the "Amended Surety Claims") to assert only the Fee Claims as defined below;
Proof of claim no. 12620 was first amended by claim no. 24834 and then ultimately by claim no. 25167 (St. Paul's surviving Enron Corp. claim).
Proof of claim no. 13070 was first amended by claim no. 24966 and then ultimately by claim no. 25188 (Travelers' surviving Enron Corp. claim).
WHEREAS, certain of the Amended Surety Claims also include claims for fees and/or expenses incurred in connection with or with respect to Surety Bonds other than the Mahonia Bonds (the "Non-Mahonia Fee Claims," and together with the Mahonia Fee Claims, the "Fee Claims");
WHEREAS, except for the Fee Claims, the Parties have resolved all of the otherwise Retained Claims pursuant to (1) that certain agreed stipulation ordered by this Court on March 15, 2005 (the "March 2005 Stipulation") and (2) that certain Order Approving Settlement Agreement and Mutual Release by and Among Enron Corp., Enron Funding Corp., Harrington International Insurance Limited, St. Paul Medical Liability Insurance Company, Federal Insurance Company, Fireman's Fund Insurance Company, Zurich American Insurance Company, Lumbermens Mutual Casualty Company, SPCP Group, L.L.C., as agent for Silver Point Capital Fund, L.P., and Silver Point Capital Offshore Fund, Ltd., and Longacre Capital Partners (QP), L.P., dated May 24, 2005 (the "Monte Settlement Order");
WHEREAS, on March 9, 2005, the Reorganized Debtors objected to the Fee Claims (the "Fee Claim Objection") and the Sureties filed a timely response in opposition to the Fee Claim Objection; and
WHEREAS, to avoid the expense and time of litigation, the outcome of which is uncertain, the Reorganized Debtors and the Sureties desire to resolve the Fee Claim Objection and fix the amount and classification under the Plan of the Fee Claims in accordance with the terms of this Stipulation.
NOW, THEREFORE, IT IS HEREBY STIPULATED, CONSENTED TO AND AGREED by and between the Parties that:
1. The foregoing recitals are incorporated herein as if fully set forth in the text of this Stipulation.
2. This Stipulation shall not become effective until it is approved and "So Ordered" by the Bankruptcy Court, and (iii) such order becomes final and non-appealable.
3. If the Stipulation does not become effective pursuant to paragraph 2 above, (a) the Stipulation shall be deemed null and void; (b) none of the Parties to the Stipulation shall be deemed to have waived any rights, claims and/or defenses that it may have had and that existed before the execution of the Stipulation; (c) the Parties shall be restored to their respective positions immediately before execution of the Stipulation; and (d) neither the Stipulation nor any exhibit, document, or instrument delivered hereunder, nor any statement, transaction, or proceeding in connection with the negotiation, execution, or implementation of the Stipulation, shall be (i) with prejudice to any person or party herein, (ii) deemed to be or construed as an admission by any of the Parties herein of any act, matter, proposition, or merit or lack of merit of any claim or defense, or (iii) referred to or used in any manner or for any purpose in any subsequent proceeding in this action, or in any other action in any court or in any other proceeding. The Parties further agree that in the event the Bankruptcy Court does not approve this Stipulation, the Amended Surety Claims shall remain outstanding and subject to objection by the Reorganized Debtors notwithstanding any time limitations in Article 21.1, or any other provision, of the Plan.
4. Each of the Amended Surety Claims shall be and hereby is allowed as a prepetition, general unsecured claim in the amount, and subject to the classification, set forth on Exhibit A to this Stipulation, with all deductions and setoffs deemed to have been taken or made (the "Allowed Claims"). Without limiting the foregoing sentence or Exhibit A, each Amended Surety Claim to be allowed against a Debtor other than Enron Corp. shall be and hereby is allowed as an Allowed General Unsecured Claim (as defined in the Plan) against that Debtor, and each Amended Surety Claim to be allowed against Enron Corp. shall be and hereby is allowed as an Allowed Enron Guaranty Claim (as defined in the Plan).
5. The Allowed Claims identified in Exhibit A shall constitute a full and complete resolution of such claims for all purposes in this case, including for the purpose of distributions.
The amounts allowed hereunder, as set forth on Exhibit A, are in addition to amounts allowed pursuant to the previously ordered March 2005 Stipulation and the Monte Settlement Order.
6. To the extent not specifically allowed herein, the Amended Surety Claims are hereby disallowed, and the Fee Claim Objection is hereby deemed resolved.
7. Except as otherwise provided herein, the Sureties, for themselves and their respective affiliates, officers, trustees, directors, employees, attorneys, agents, predecessors, successors, heirs, executors, administrators, parents and subsidiaries, past and present, and assigns (each, a "Surety Releasing Party"), fully and forever remise, release and discharge the Reorganized Debtors, the Debtors, their subsidiaries, any entity now or previously owned or controlled by Enron, any successor or assignee entity contemplated under the Plan, Stephen Forbes Cooper, LLC, and each of their respective employees, officers, and directors (collectively, the "Enron Released Parties"), of and from any and all claims relating to the Surety Bonds and the GIAs, which any of the Surety Releasing Parties has had, now has or hereafter can, shall or may have against the Enron Released Parties, for or by reason of or arising out of or in any way related to the Surety Bonds and the GIAs; provided, however, the Sureties are not releasing (i) the Allowed Claims and their rights under this Stipulation or the Plan with respect to the Allowed Claims, (ii) any prepetition claims that they might have that are unrelated to the Surety Bonds and the GIAs, and (iii) any claims allowed under the March 2005 Stipulation and the Monte Settlement Order and their rights under the March 2005 Stipulation, Monte Settlement Order, or the Plan with respect to such allowed claims.
8. Except as otherwise provided herein and except for the Sureties' obligations under this Stipulation, the Reorganized Debtors and the Debtors, for themselves and their respective affiliates, officers, trustees, directors, employees, attorneys, agents, predecessors, successors, heirs, executors, administrators, parents and subsidiaries, past and present, and assigns (each, a "Debtor Releasing Party"), fully and forever remise, release and discharge the Sureties, their subsidiaries, and each of their respective employees, officers and directors, of and from any and all claims relating to the Surety Bonds and the GIAs, which the Debtor Releasing Parties have had, now have or hereafter can, shall or may have against the Sureties, their subsidiaries, and each of their respective employees, officers and directors, for or by reason of or arising out of or in any way related to the Surety Bonds and the GIAs; provided, however, the Debtors are not releasing, and expressly reserve, any and all rights, objections and defenses that they may have with respect to (i) any claims that have been asserted or that may be asserted by the Sureties that are unrelated to the Surety Bonds and the GIAs or (ii) the March 2005 Stipulation and the Monte Settlement Order.
9. This Stipulation shall be binding upon and shall inure to the benefit of the Parties and their legal representatives, predecessors, successors and assigns.
10. This Stipulation may be executed in counterparts by the Parties by either facsimile or original signatures.
11. This Court shall retain jurisdiction with respect to any and all issues or disputes that may arise in connection with this Stipulation.
12. This Stipulation shall be governed by, construed and enforced in accordance with applicable federal bankruptcy law and the laws of the State of New York.
13. This Stipulation 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 the Parties. SO ORDERED.
EXHIBIT A Allowed St. Paul Fee Claims Allowed Proof of Claim # Allowed Claim Class Allowed Claim Amount Allowed Travelers Fee Claims Allowed Proof of Claim # Allowed Claim Class Allowed Claim Amount
ENA 25138 Class 5 $3,113,784.42 ENGMC 25139 Class 37 $3,729,697.83 Enron Corp. 25167 Class 185 $8,056,283.98 ENA 25187 Class 5 $4,343,079.15 ENGMC 25186 Class 37 $2,583,681.86 Enron Corp. 25188 Class 185 $7,034,230.87 ** The amounts allowed above in the Allowed Claims are in addition to amounts allowed pursuant to the previously ordered March 2005 Stipulation.