Opinion
Case No. 01-16034 (AJG), Jointly Administered.
August 12, 2005
Luc A. Despins (LD 5141), Matthew S. Barr (MB 9170), Irene Bogdashevsky (IB 3275), MILBANK, TWEED, HADLEY McCLOY LLP, New York, New York, Attorneys for Reorganized Debtors.
Linda J. Casey (LC 1891), Bonnie MacDougal Kistler, PEPPER HAMILTON LLP, Philadelphia, PA, Attorneys for ExxonMobil Chemical Company, A Division of Exxon Mobil Corporation.
This Stipulation and Consent Order (the "Stipulation and Consent Order") is entered into by and between Enron Corp. ("Enron") and Enron Gas Liquids, Inc. ("EGLI" and, together with Enron, the "Enron Parties"), two of the Reorganized Debtors in the above-captioned case, and ExxonMobil Chemical Company, a division of Exxon Mobil Corporation ("ExxonMobil", with ExxonMobil and the Enron Parties being collectively referred to as the "Parties").
RECITALS
A. Chapter 11. Commencing on December 2, 2001, and periodically thereafter, Enron and certain of its affiliates, each filed a voluntary petition for relief 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 "Bankruptcy Court"), which chapter 11 cases have been procedurally consolidated for administrative purposes only.
B. Confirmation of Plan. By order, dated July 15, 2004 (the "Confirmation Order"), this Court confirmed the Supplemental Modified Fifth Amended Joint Plan Of Affiliated Debtors Pursuant To Chapter 11 Of The United States Bankruptcy Code, dated July 2, 2004 (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 or to proofs of Claim . . . 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. Storage/Throughput Agreement. Effective September 3, 1997, EGLI and ExxonMobil entered into that certain Storage/Throughput Agreement (the "Agreement"), pursuant to which EGLI agreed to provide storage and transportation services to ExxonMobil for certain gasoline products. Effective June 1, 2001, Enron entered into that certain Guaranty, in favor of ExxonMobil, pursuant to which Enron guaranteed the obligations of certain Enron entities, including EGLI, under their respective contracts, including the Agreement, with ExxonMobil (the "Guaranty"). Pursuant to section 365 of the Bankruptcy Code, EGLI rejected the Agreement upon written notice to ExxonMobil, dated March 15, 2002, in accordance with the Court's Order Establishing And Authorizing Procedures For The Rejection Of Executory Contracts And Unexpired Leases Of Nonresidential Real Property, dated January 9, 2002 (Docket No. 793).
D. ExxonMobil Claim. On or about October 15, 2002, ExxonMobil filed a proof of claim against EGLI (Claim No. 19906) in the amount of $2,368,200 ("Claim 19906") relating to EGLI's alleged obligations under the Agreement, and a proof of claim against Enron for the same amount relating to Enron's alleged obligations under the Guaranty ("Claim 19907" and, together with Claim No. 19906, the "ExxonMobil Claims").
Claim 19906 was filed as an administrative priority claim. On November 16, 2004, the Debtors filed Debtors' Sixty-Seventh Omnibus Objection Filed In Aid Of Confirmation Of Joint Plan To Reclassify Proofs Of Claim Filed As Administrative And Priority Claims (the "Reclassification Objection"), to reclassify certain claims, including Claim 19906, as general unsecured claims. On January 20, 2005, this Court held a hearing on, among other things, the Reclassification Objection. ExxonMobil failed to appear at the hearing. This Court has not yet ruled on the Reclassification Objection with respect to Claim 19906.
E. Estimation Order. On February 18, 2004, the 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").
F. Estimation Objection. On March 4, 2005, the Enron Parties filed the Objection of Enron Corp. And Enron Gas Liquids Inc. To Proofs Of Claim Nos. 19906 And 19907 Filed By Exxon Mobil Corporation Pursuant To Claims Estimation Procedures (Estimation Objection Number 32) (Docket No. 24098) (the "Estimation Objection"). The Estimation Objection invoked the procedures contained in the Estimation Order. On April 7, 2005, EGLI filed its Opt-Out Election Of ExxonMobil Chemical Company, A Division Of Exxon Mobil Corporation, Submitted In Response To Estimation Objection Number 32.
G. The Enron Parties have reviewed the ExxonMobil Claims to determine whether and to what extent they should be allowed. Based on the review, the Enron Parties dispute the validity and amount of the ExxonMobil Claims as alleged. To avoid the cost, uncertainty and delay that would attend litigation, the Parties have negotiated a consensual resolution of all disputes concerning the ExxonMobil Claims on the terms and conditions set forth in this Stipulation and Consent Order.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in the Stipulation and Consent Order, in an effort to avoid unnecessary expenses and litigation, and with the intent to be legally bound, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed between the Parties as follows, and binding on all parties in interest in these cases as of the Effective Date (as defined below) of this Stipulation and Consent Order.
1. Allowed Claims. (A) Claim 19906 shall be allowed as a general unsecured nonpriority claim against EGLI (Class 17 under the Plan), in the amount of $1,600,000, and (B) Claim 19907 shall be allowed as a general unsecured nonpriority Enron Guaranty Claim (Class 185 under the Plan), in the amount of $1,600,000 (together, the "Allowed Claims").
2. Withdrawal of Objections. The Estimation Objection and the Reclassification Objection with respect to Claims 19906 and 19907, as applicable, shall be deemed withdrawn on the Effective Date.
3. Release Of Enron Released Parties By ExxonMobil 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, ExxonMobil, on behalf of itself and its present and former shareholders, officers, directors, employees, partners, agents, representatives, subsidiaries, affiliates, successors and assigns (collectively, the "ExxonMobil Releasing Parties"), hereby unequivocally release and forever discharge the Enron Parties, and any of their 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 "Enron 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 ExxonMobil Releasing Parties ever had, now have or may have against the Enron Released Parties arising out of, in connection with or relating to the ExxonMobil Claims, the Agreement, or the Guaranty, but excluding any Claims arising out of, in connection with or relating to this Stipulation and Consent Order.
4. Release Of ExxonMobil Released Parties By Enron And EGLI 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, the Enron Parties, on behalf of themselves, their predecessors, and, to the extent they have the authority or capacity, their present and former shareholders, officers, directors, employees, partners, agents, representatives, subsidiaries, affiliates, successors and assigns (collectively, the "Enron Releasing Parties"), hereby unequivocally release and forever discharge ExxonMobil, and any of its 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 "ExxonMobil Released Parties"), from any and all Claims which any of the Enron Releasing Parties ever had, now have or may have against the ExxonMobil Released Parties arising out of, in connection with or relating to the ExxonMobil Claims, the Agreement, or the Guaranty, but excluding any Claims arising out of, in connection with or relating to this Stipulation and Consent Order.
5. Authority and Representations. 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. ExxonMobil hereby represents and warrants that ExxonMobil is the lawful holder of Claim Nos. 19906 and 19907 and has not transferred and will not transfer such claims to any party.
6. The Parties further represent and agree that they have each had the opportunity to consult with their respective attorneys regarding the Stipulation and Consent Order, including, but not limited to, the opportunity for counsel to review the Stipulation and Consent Order. The Parties represent and agree that they have each carefully read and each fully understands all the provisions of the Stipulation and Consent Order and that the Stipulation and Consent Order is entered into voluntarily. The Parties additionally represent and agree that the terms and provisions of the Stipulation and Consent Order shall not be construed against the party that drafted the Stipulation and Consent Order.
7. Binding Nature. The 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 upon the entry of an order of the Bankruptcy Court approving the Stipulation and Consent Order.
8. Bankruptcy Court Approval. The Stipulation and Consent Order is expressly subject to and contingent upon its approval by the Bankruptcy Court. If the Stipulation and Consent Order, or any portion hereof, is not approved by the Bankruptcy Court or if it is overturned or modified on appeal, the Stipulation and Consent Order shall be of no further force and effect, and, in such event, neither the Stipulation and Consent Order nor any negotiations and writings in connection with the 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.
9. Non-Severability. The provisions of this Stipulation and Consent Order are mutually interdependent, indivisible and non-severable.
10. Entire Agreement. The Stipulation and Consent Order constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, written and oral, between the Parties with respect to the subject matter hereof. The Stipulation and Consent Order may not be modified or amended except by a writing signed by all of the Parties. All representations, warranties, promises, inducements or statements of intention made by the Parties hereto are embodied in the 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 the Stipulation and Consent Order discloses all of the terms of the Parties' agreement with respect to the ExxonMobil Claims.
11. Counterparts; Effective Date. The 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, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to all Parties, and the Bankruptcy Court has entered the Stipulation and Consent Order on the docket of the Bankruptcy Court (the "Effective Date").
12. 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.
13. 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.
14. Retention of Jurisdiction. The 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 Court with respect thereto. The Parties waive arguments of lack of personal jurisdiction or forum non-conveniens with respect to the Court.
15. 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 August 1, 2005.
So Ordered.