Opinion
Case No. 01-16034 (AJG), Jointly Administered.
July 8, 2005
Eric J. Fromme, Esq., GIBSON, DUNN CRUTCHER LLP, Irvine, CA, Attorneys for BMC.
Martin J. Bienenstock (MB 3001), Brian S. Rosen (BR 0571), David R. Berz (DB 4517), WEIL GOTSHAL MANGES LLP, New York, Attorneys for the Reorganized Debtors.
Enron Corp. ("Enron") and Enron Broadband Services, Inc. ("EBS"), as reorganized debtors, and BMC Software Distribution, Inc. ("BMC Distribution") and BMC Software, Inc. ("BMC Software"), together, "BMC" and collectively with Enron and EBS, 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 periodically thereafter, Enron 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.
B. 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.
C. 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").
D. The Plan became effective on November 17, 2004 (the "Effective Date"), and the Reorganized Debtors emerged from chapter 11.
BMC's Claims:
E. On or about March 31, 2001, EBS and BMC entered into a certain Volume Purchase Agreement (the "VPA") whereby EBS agreed to purchase and BMC agreed to sell BMC Products, BMC Maintenance and Support and BMC Services, as defined in the VPA, totaling $2,798,000.00.
F. Enron, EBS and BMC also entered into various software and professional services agreements (the "Software and Professional Services Agreements") between April 1992 and March 2001.
G. On October 11, 2002, BMC filed Proof of Claim No. 13413 in the amount of $2,860,869.28 against EBS, and filed Proof of Claim No. 13414 in the amount of $2,860,869.28 against Enron (the "BMC Claims") for alleged damages arising out of the VPA, as well as for unpaid invoices pursuant to the Software and Professional Services Agreements.
H. On or about January 31, 2005, the Reorganized Debtors filed their Seventy-Eighth Omnibus Objection to the BMC Claims (the "Objection"), pursuant to which the Reorganized Debtors sought to have the BMC Claims reduced and allowed based upon the Reorganized Debtors' books and records.
I. On or about March 3, 2005, BMC filed its response to the Objection (the "Response").
J. On or about May 5, 2005, the Reorganized Debtors filed its reply to the Response (the "Reply").
K. The Parties now desire to resolve the Objection, the Response, and the Reply on the terms and conditions provided herein.
AGREEMENT
NOW, THEREFORE, IT IS HEREBY AGREED BY THE PARTIES, BY AND THROUGH THEIR RESPECTIVE COUNSEL, AS FOLLOWS:
1. The BMC Claims shall be reduced and allowed in the following amounts:
i) Proof of Claim No. 13413 reduced and allowed as a Class 9 General Unsecured Claim in the amount of $2,016,482.70.
ii) Proof of Claim No. 13414 reduced and allowed as a Class 4 General Unsecured Claim in the amount of $3,150.93 (together with Proof of Claim No. 13413, the "Allowed Claims").
2. Payments and/or distributions on account of the Allowed Claims will be made in the manner provided and at the time set forth in the Plan.
3. All Scheduled Liabilities related to BMC as set forth in the liability schedules filed with the Court are hereby disallowed in their entirety in favor of the Allowed Claims.
4. Enron, EBS and BMC agree that this Stipulation and Order Resolving Reorganized Debtors' Objection to Proof of Claim Nos. 13413 and 13414 Filed by BMC Software Distribution, Inc. and BMC Software, Inc. Respectively (the "Stipulation and Order") is the entire understanding of the Parties 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 hereto, which shall be so ordered by the Court. The Parties also agree that this Stipulation and Order resolves any and all claims, stated or unstated, arising out of, in connection with or relating to the BMC Claims.
5. Further, the Parties, their successors and assigns, and each of them, shall and do hereby forever, mutually release and forever discharge each other, and their respective officers, directors, attorneys, employees, agents, representatives, predecessors and successor in interest and assigns of and from each and every right, claim, debt, demand, obligation, action, damage, and cause of action whatsoever, known or unknown, foreseen or unforeseen, that they have or may have against each other from the beginning of time until the date of execution of this Stipulation and Order arising out of or relating to the Parties' relationship in connection with the Software and Professional Services Agreements or the rejection or termination thereof, provided, however, that this release is not intended to and shall not relieve Enron and EBS from their obligations, if any, to preserve and protect BMC's intellectual property rights in accordance with the terms set forth in the Software and Professional Services Agreements, and that this release is not intended to and shall not relieve the Parties of their obligations under this Stipulation and Order.
6. In entering into the mutual release provided for in this Agreement, each Party recognizes that no facts or representations are ever absolutely certain; accordingly, each Party assumes the risk of any mistake, and if it should subsequently discover that any understanding of the facts or of the law was incorrect, neither Party shall be entitled to set aside this release by reason thereof, regardless of any mistake of fact or law.
7. 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. 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.
8. This Court shall retain jurisdiction with respect to any and all issues or disputes that may arise in connection with this Stipulation and Order. This Stipulation and Order shall be governed by and construed in accordance with federal bankruptcy law, to the extent applicable, and where state law is implicated, the laws of the State of Texas shall govern.
9. This Stipulation and Order shall be binding on the Parties hereto and their respective successors and assigns.
10. This Stipulation and Order may be executed in any number of counterparts and shall constitute one agreement, binding upon all Parties thereto as if all Parties signed the same document, and all facsimile signatures shall be treated as originals for all purposes.
SO ORDERED.