Opinion
Case No. 01-16034 (AJG), (Jointly Administered)
December 3, 2003
Melanie Gray, Martin J. Bienenstock, Brian S. Rosen, Martin A. Sosland, WEIL, GOTSHAL MANGES LLP, New York, NY, for the Debtors and Debtors in Possession
BARRY A. BROWN, BARRY A. BROWN P.C., Houston, TX, for the Upstream Energy Services LLC
STIPULATION AND AGREED ORDER REGARDING TEMPORARY ALLOWANCE UNDER FEDERAL RULE OF BANKRUPTCY PROCEDURE 3018
This Stipulation and Order (the "Stipulation") is made as of November 14, 2003, by and among Enron Corp. and certain of its direct and indirect subsidiaries, as debtors and debtors in possession (collectively, the "Debtors") and Upstream Energy Services LLC as undisclosed agent for certain Texas Natural Gas Producers ("Upstream/Agent"), and together with the Debtors (the "Parties") by their respective undersigned counsel.
Pursuant to this Stipulation, the Parties hereby agree and stipulate as follows:
RECITALS
WHEREAS, on December 2, 2001 and continuing thereafter (the "Commencement Date"), the Debtors commenced cases under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"). The Debtors continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. By order dated December 3, 2001 and subsequent orders, the Debtors' chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered.
WHEREAS, in October 2001, Enron North America Corp. ("ENA") and Upstream/Agent executed a series of agreements for the delivery of natural gas to ENA
WHEREAS, on or about July 18, 2002, Upstream/Agent filed a proof of claim (claim # 2500) alleging a secured claim in the amount of $2,863,419.00 against ENA An exact duplicate of the Claim (claim # 2625) appears in the database of the Debtors' claims agent, Bankruptcy Services Incorporated, LLC ("BSI"), as a filed claim against ENA by Upstream.
WHEREAS, on October 7, 2002, Upstream/Agent filed a motion for relief from the automatic stay pursuant to section 362 of the Bankruptcy Code (the "Motion to Lift Stay").
WHEREAS, on December 6, 2002, ENA filed an objection to claim numbers 2500 and 2625 based upon, among other things, ENA's belief that the claims are unsecured.
WHEREAS, on January 31, 2003, Upstream/Agent filed a motion for summary judgment to ENA's claim objection based upon, among other things, Upstream/Agent's assertion that the claims are secured by fully perfected liens under Tex. Bus. Comm. Code § 9.343 attaching to, inter alia, the gas, and ENA's rights to payment from third parties by reason of the gas or resales from the pool or "mass" into which ENA commingled its rights in the gas, (the "Summary Judgment Motion").
WHEREAS, on February 17, 2003, ENA filed a response to the Summary Judgment Motion and sought entry of an order declaring the claims to be unsecured.
WHEREAS, the Debtors filed the eighth omnibus objection on June 23, 2003 (the "Omnibus Objection"). The Omnibus Objection objects to claim number 2500 on the grounds that it is duplicative of claim number 2625.
WHEREAS, ENA and Upstream/Agent agree that claim numbers 2500 and 2625 are duplicates and if the claims are determined to be unsecured Upstream/Agent is only entitled to vote claim number 2500 in the amount of $2,863,419.00 (the "Claim").
WHEREAS, on August 28, 2003, as supplemented on September 18, 2003, the Debtors filed a motion for an order pursuant to sections 105(a), 502(c), 1125 and 1126 of title 11 of the Bankruptcy Code and Rules 3003, 3017 and 3018 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), establishing voting procedures in connection with the plan process and temporary allowance of claims procedures related thereto (as supplemented, the "Temporary Allowance Procedures Motion").
WHEREAS, the Bankruptcy Court has taken the Summary Judgment Motion under advisement. In the event that the Bankruptcy Court determines that the Claim is unsecured, or has not ruled upon the secured status of the Upstream/Agent claim, the Parties desire that Upstream/Agent be able to vote the Claim as a general unsecured claim against ENA without further proceedings before the Bankruptcy Court under the Temporary Allowance Procedures Motion.
WHEREAS, on September 22, 2003, Upstream/Agent filed an objection to the Temporary Allowance Procedures Motion (the "Procedures Objection").
WHEREAS, the Parties enter into this Stipulation to temporarily allow the Claim for voting purposes as a general unsecured claim against ENA as set forth below.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged, the parties hereto stipulate and agree as follows:
1. All of the Recitals are incorporated herein by reference.
2. Upon approval by the Bankruptcy Court of this Stipulation, the Procedures Objection will be deemed withdrawn by Upstream/Agent.
3. In the event that the Bankruptcy Court enters an order determining that the Claim is unsecured, or has not ruled on the secured status of the Claim by the final date set by the Bankruptcy Court for the entry of orders temporarily allowing claims for voting purposes (the "Temporary Allowance Order Deadline"), the Claim shall be temporarily allowed for voting purposes in the amount of $2,863,419.00, as provided for by Bankruptcy Rule 3018, for the limited purpose of voting on the Debtors' plan of reorganization as a general unsecured claim against ENA. In the event that the Court rules that the Claim is unsecured in whole or in part, the Claim may be voted in accordance with the Court's determination without regard to any appeal having been taken from such order.
5. In the event that the Bankruptcy Court enters an order determining that the Claim is a secured claim against ENA by the Temporary Allowance Order Deadline, the Claim will be treated as a secured claim for voting purposes and will not vote on the Plan to the extent of the security, and may be voted as an unsecured claim or an 1111(b) election made with respect to the un-secured or under-secured portion
6. Claim number 2625 is duplicative of the Claim and is not entitled to vote on the Plan. Upon approval by the Bankruptcy Court of this Stipulation, claim number 2625 will be deemed withdrawn in its entirety by Upstream/Agent.
7. Nothing in this Stipulation is intended to be, nor shall it be construed to be, an allowance of the Claim or waiver of any right to security for the Claim for any purpose other than voting or a waiver by the Debtors or any other parties in interest of any right to object on any grounds to any claims or proofs of claim filed or to be filed by Upstream/Agent.
8. Nothing in this Stipulation is intended, nor shall it be construed, to affect the current dispute between the parties as to whether the Claim is secured or unsecured.
IT IS SO ORDERED.