Opinion
Case No. 01-16034 [AJG], Jointly Administered (Post Confirmation).
July 14, 2005
Frank A. Oswald (FAO-1223), Neil Berger (NB-3599), Daniel F.X. Geoghan (DG-3132), TOGUT, SEGAL SEGAL LLP, Bankruptcy Co-Counsel for Enron Corp., et al., New York, New York, Reorganized Debtors.
STEPHEN V. FALANGA, ESQ., A Member of the Firm, CONNELL FOLEY LLP, Roseland, New Jersey.
WHEREAS, commencing on December 2, 2001 (the "Petition Date"), Enron Corp., and certain of its subsidiaries and affiliates as debtors and debtors in possession (collectively the "Debtors") filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"); and
WHEREAS, the Effective Date of the Debtors' Plan occurred on November 17, 2004 and the Debtors emerged from Chapter 11 as Reorganized Debtors; and
WHEREAS, on October 28, 2003, the Debtors made a demand (the "Demand") upon Connell Foley LLP ("Connell Foley") seeking, pursuant to, inter alia, sections 547, 548 and/or 550 of the Bankruptcy Code, the return of alleged preferential transfers aggregating $166,161.49 (the "Transfers") made within 90 days of the Petition Date; and
WHEREAS, by Stipulation dated November 24, 2003 (the "Tolling Stipulation"), Connell Foley agreed to toll the statute of limitations: (i) for any claim or cause of action against Connell Foley that may be asserted by one or more of the Debtors under or through sections 502, 506, 541, 544, 547, 548, 549, 550 and 553 of the Bankruptcy Code (the "Claims"); or (ii) any defenses, setoffs and counterclaims to such Claims which might be asserted by Connell Foley; and
WHEREAS, Connell Foley filed a proof of claim in the Debtors' bankruptcy cases, Claim No. #18286, in the amount of $71,416.57 (the "Claim No. 18286"); and
WHEREAS, as a result of arms-length negotiations and an exchange of documents, the Reorganized Debtors and Connell Foley have agreed to settle by: (a) Connell Foley's payment of $75,000 to the Reorganized Debtors (the "Settlement Amount"); and (b) the waiver by Connell Foley of any and all claims against the Debtors and the Reorganized Debtors arising from or relating to the Transfers, including, but not limited to, the Claim No. 18286 and claims arising pursuant to section 502(h) of the Bankruptcy Code, pursuant to the terms of this agreement (the "Settlement Agreement"); and
WHEREAS, pursuant to an Order of the Bankruptcy Court dated September 11, 2003 (the "Procedures Order"), the Reorganized Debtors are authorized to consummate this Settlement Agreement without (i) a further Order of the Bankruptcy Court and (ii) notice to, or consent from, any other party, nonetheless, in light of, among other things, the release granted herein, the Parties seek Bankruptcy Court approval of this Stipulation; and
WHEREAS, the Procedures Order is deemed a part hereof and incorporated by reference herein; and
WHEREAS, the Reorganized Debtors have concluded that the proposed settlement is in the best interests of their estates, considering, among other things, the defenses asserted by Connell Foley and the cost, expense and delay associated with litigating the matter, the result of which is uncertain; and
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by and between the Parties as follows:
1. On or before September 30, 2005, Connell Foley shall deliver to Togut, Segal Segal LLP a check made payable to Enron Corp. for the Settlement Amount.
2. After the date that this Settlement Agreement is "So Ordered" by the Bankruptcy Court (the "Effective Date"), upon timely, full and complete payment of the Settlement Amount (the "Consummation Date"), the Reorganized Debtors shall be deemed to have waived and released any and all claims that they may have against Connell Foley arising out of or relating to the Transfers; provided however, that the Tolled Period provided for in the Tolling Stipulation is further extended through and including the Consummation Date, provided further that, in the event this Stipulation is not "So Ordered" by the Bankruptcy Court, the Parties agree that the "Tolled Period" provided for in the Tolling Stipulation is extend to and including 20 days after the denial of the relief requested herein.
3. On the Effective Date, Connell Foley shall be deemed to have waived and released any and all claims (to be interpreted in the broadest manner possible) they may have against the Debtors and the Reorganized Debtors arising out of or relating to the Transfers, including any claim for, or on account of, its payment of the Settlement Amount pursuant to Bankruptcy Code section 502(h), and Claim No. 18286.
4. Connell Foley shall not file any proofs of claim in the Debtors' or the Reorganized Debtors' Chapter 11 cases in connection with Connell Foley's payment of the Settlement Amount and any such claim shall be deemed immediately expunged without any further Order of the Court.
5. Upon the Consummation Date, any filed or scheduled claims in favor of Connell Foley, including, but not limited to, the Claim No. 18286, shall be deemed immediately expunged without any further Order of the Court, and the same shall be reflected as expunged on the claims register maintained for the Debtors' cases.
6. All proceeds received by the Reorganized Debtors in connection with this Settlement Agreement, including the Settlement Amount, shall be retained by the Reorganized Debtors and neither disbursed nor used by them unless such disbursement or use is consistent with the Supplemental Modified Fifth Amended Plan of Affiliated Debtors which was confirmed on July 15, 2004, and as may be amended by further Order of the Bankruptcy Court. This Paragraph does not impose any obligation upon Connell Foley.
7. This Settlement Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same agreement. This Settlement Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their legal representatives, predecessors, successors and assigns, including any Chapter 11 or Chapter 7 trustee that may be appointed in the Debtors' or Reorganized Debtors' cases.
8. It is expressly understood and agreed that the terms hereof, including the recital paragraphs and headings, are contractual and that the agreement herein contained and the consideration transferred is to compromise disputed claims and avoid litigation, and that no statement made herein, payment, release or other consideration given shall be construed as an admission by the parties of any kind or nature.
9. The Bankruptcy Court shall retain exclusive jurisdiction to interpret and enforce the terms of this Settlement Agreement and to resolve any disputes in connection herewith.
So Ordered.