Opinion
Case No. 01-16034 (AJG), Jointly Administered.
August 1, 2005.
August 15, 2005
Martin J. Bienenstock (MB 3001), Brian S. Rosen (BR 0571), Melanie Gray (admitted pro hac vice), WEIL, GOTSHAL MANGES LLP, New York, New York, Attorneys for the Reorganized Debtors.
Wayne D. Stinnett, Jr., President, CenterPoint Energy Services, Inc. (F/K/A, CenterPoint Energy Gas Services Inc.), as successor-in-interest to CenterPoint Energy Gas Marketing Corp. (f/k/a MRT Energy Marketing Company), CenterPoint Energy Gas Resources Corp. (f/k/a Entex Gas Resources Corp.), and Entex Gas Marketing Company, Houston, TX.
Enron Energy Services, Inc. ("EESI") and Enron North America Corp. ("ENA") (each of EESI and ENA an "Enron Party" and collectively the "Enron Parties"), and CenterPoint Energy Services, Inc. (f/k/a CenterPoint Energy Gas Services Inc.), as successor-in-interest to CenterPoint Energy Gas Marketing Corp. (f/k/a MRT Energy Marketing Company), CenterPoint Energy Gas Resources Corp. (f/k/a Entex Gas Resources Corp.), and Entex Gas Marketing Company (collectively "CES", and together with the Enron Parties, the "Parties"), by and through their respective counsel or business representative, as set forth below, do hereby stipulate as follows:
RECITALS
A. Commencing on December 2, 2001 (the "Petition Date"), the Enron Parties and certain of their affiliates (collectively, the "Debtors" or "Reorganized Debtors"), filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). 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 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"). The Effective Date of the Plan was November 17, 2004 and the Reorganized Debtors have emerged from chapter 11.
Claims Against the Reorganized Debtors.
C. Subsequent to the Petition Date, the Debtors prepared and filed with the Bankruptcy Court schedules of liabilities reflecting sums owed to various third parties, including liabilities owed to CES (the "Scheduled Liabilities").
Claim Against EESI.
D. On October 15, 2002, CES filed claim number 14957 against EESI as a general unsecured claim in the amount of $229,018.37 based on Invoice Nos. 111063 and 101062 ("Claim No. 14957").
ENA Net Accounts Receivable/Contracts.
E. ENA has asserted that the Base Contract for Short-Term Sale and Purchase of Natural Gas between ENA and CES (each parties by assignment) dated January 1, 1998 together with certain transactions executed thereunder, including ENA Deal Nos. 1143249, 1144584, and 1164717, resulted in pre-petition, net accounts receivable due from CES (the "ENA/CEGS Receivable").
F. The Parties entered into numerous agreements providing for the purchase, sale, gathering and pooling of natural gas, including without limitation by way of enumeration those set forth on Schedule I attached hereto (the "Contracts").
Objection to Proofs of Claim and Settlement Negotiations.
G. On January 14, 2005, the Reorganized Debtors filed the Seventy-fourth Omnibus Objection (Docket No. 22978), which objected to Claim No. 14957.
H. On February 25, 2005 in Docket No. 23904, CES filed a response to ENA's objection.
I. A hearing on ENA's objection and the CES response was scheduled for March 24, 2005 and has been adjourned by agreement of the Parties.
J. The Parties have been actively engaged in arms-length negotiations to resolve any and all liability arising from Claim No. 14957, the ENA/CES Receivable, the Contracts, and the Scheduled Liabilities and have reached a good faith settlement pursuant to the terms set forth below. The Enron Parties submit that this proposed resolution will benefit the Reorganized Debtors' estates by eliminating unnecessary litigation costs.
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 or business representative, as set forth below, stipulate and agree as follows:
AGREEMENT
1. The Recitals are fully incorporated herein by reference.
2. Claim No. 14957 is disallowed as of the Effective Date (as defined below).
3. All Scheduled Liabilities related to CES, as set forth in the schedules of liabilities filed by ENA with the Bankruptcy Court shall be disallowed as of the Effective Date (as defined below).
4. On or before the fifth Business Day after the Effective Date (as defined below) (the "Payment Date"), CES shall pay ENA $325,291 (the "Settlement Payment") (in one lump sum in immediately available United States funds, without setoff, recoupment, counterclaim, or reduction of any kind) by wire transfer to the following account:
JPMorgan Chase Bank ABA No.: 021000021 Acct. No.: 304-194077 Reference: ENA-CenterPoint (CEGS) Settlement
For purposes of this Stipulation and Order, the term "Business Day" shall mean any day other than Saturday or Sunday or any other day on which banks in New York City, New York, are permitted or required to close.
5. Interest shall accrue on any overdue portion of the Settlement Payment from the Payment Date until the date of receipt thereof by ENA at a rate equal to (a) the lesser of the per annum rate of interest equal to the prime lending rate published in The Wall Street Journal under "Money Rates" for the applicable period plus 2%, or (b) the maximum non-usurious rate under applicable law. Any interest to be paid by CEGS to ENA under this Section 4 shall be net of any taxes that may be levied or assessed on such interest. When requested by ENA, CEGS shall provide ENA with the appropriate tax forms indicating CES's tax identification number and, to the extent applicable, verifying that CES is exempt from the payment of any such taxes. For purposes of clarification, it is acknowledged and agreed by CES that it is responsible for paying all taxes, if any, arising out of the transaction contemplated herein and that it shall pay all such taxes in accordance with applicable law.
6. The Seventy-Fourth Objection to the Proof of Claim No. 14957, as contained in the objections referenced herein, is resolved as provided herein.
7. For the purposes of this Stipulation and Order, the term "Effective Date" shall be defined as the date when all of the following conditions have been satisfied: (a) the Stipulation and Order has been signed by each of the Parties; and (b) the Bankruptcy Court has entered the Stipulation and Order on the docket of the Bankruptcy Court. This Stipulation and Order is expressly subject to and contingent upon its approval by the Bankruptcy Court. If this Stipulation and Order, or any portion hereof, is not approved by the Bankruptcy Court or if it is overturned or modified on appeal, this Stipulation and Order shall be of no further force and effect, and, in such event, neither this Stipulation and Order nor any negotiations and writings in connection with this Stipulation and 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, or otherwise.
8. Mutual Release. On the Effective Date, and with exception only to the Parties' rights and obligations under this Stipulation and Order, the Enron Parties and CES shall be deemed to have released, acquitted and discharged one another and their respective directors, officers, employees and agents, including any subsidiary corporation or parent corporation, from any and all liabilities, claims, demands, obligations, losses, actions, causes of action, liens, suits, attorneys' fees, damages, costs, and compensation or recoupment of any nature whatsoever that any of the Parties have, had or may in the future have solely in connection with or arising out of Claim No. 14957, the ENA/CEGS Receivable, the Contracts, and the Scheduled Liabilities and the Contracts and any associated corporate guarantees are hereby terminated.
9. This Stipulation and Order sets forth the entire understanding of the Parties hereto 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 Bankruptcy Court.
10. 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.
11. This Stipulation and Order shall be governed by the laws of the State of New York. The Bankruptcy Court shall retain jurisdiction over any disputes arising hereunder.
SO ORDERED.
SCHEDULE I
CenterPoint Energy Gas Services Inc., f/k/a Entex Gas Marketing Company (96031541) — Master Firm Sale Firm Agreement with ENA, dated October 1, 1999
CenterPoint Energy Gas Marketing Company, f/k/a MRT Energy Marketing Company — General Terms and Conditions with EES
CenterPoint Energy Gas Services Inc., f/k/a MRT Energy Marketing Company (96029122) — GISB Base Contract with ENA, dated January 1, 1998
CenterPoint Energy Gas Services Inc., successor-in merger with CenterPoint Gas Resources Corp. (f/k/a Entex Gas Resources Corp.), (96063475) — GTC Spot Agreement with ENA
CenterPoint Energy Gas Services Inc., successor-in-merger with CenterPoint Gas Resources Corp. (f/k/a Entex Gas Resources Corp.), (96062170) — Online GTC Gas Short-term Firm Agreement with ENA