Opinion
Case No. 04-33192, (Jointly Administered).
November 29, 2004.
Seth Kirschbaum, Hauppauge, NY, Counsel for the Plaintiff.
Edward M. King, FROST BROWN TODD LLC, Louisville, KY, and James H.M. Sprayregen, P.C., James W. Kapp III, Ryan S. Nadick, Sven T. Nylen, KIRKLAND ELLIS LLP, Chicago, IL, Counsel for the Debtors.
STIPULATION AND AGREED ORDER BY AND BETWEEN THE DEBTORS AND ELIZABETH LANE TO MODIFY THE AUTOMATIC STAY
WHEREAS, Elizabeth Lane, as Administrator of the Estate of Erika J. Lane, Deceased, and Elizabeth Lane, Individually (the "Plaintiff") filed a personal injury action on July 22, 2004 alleging claims against the above-captioned debtors and debtors in possession (collectively, the "Debtors") for the death of Erika J. Lane stemming from an incident that allegedly occurred on March 21, 2004. The action is currently pending in the Supreme Court of the State of New York, County of Suffolk (the "State Court") as Case No. 04-15553 (the "Action").
WHEREAS, on May 23, 2004, each of the Debtors filed a voluntary petition (the "Chapter 11 Cases") for relief under chapter 11 of title 11 of the United States Code (as amended, the "Bankruptcy Code").
WHEREAS, the Action was stayed by the filing of the Debtors' Chapter 11 Cases.
WHEREAS, the Debtors and the Plaintiff agree that the damages sought by the Plaintiff are limited to those damages covered by the Debtors' general liability insurance carriers; provided, however, that the Debtors admit neither liability nor the validity of any damages with respect to the Action.
NOW, THEREFORE, IT IS HEREBY STIPULATED by the undersigned parties, subject to the approval of this Court, that:
1. The foregoing recitals are hereby fully incorporated into and made an express part of this Stipulation and Agreed Order.
2. Upon Court approval of this Stipulation and Agreed Order, the automatic stay provision of section 362 of the Bankruptcy Court shall be modified for the sole and limited purpose of permitting (a) the Action to proceed against the Debtors in the State Court to and including the entry of judgment against the Debtors and/or (b) the Plaintiff to conduct negotiations directly with the Debtors' applicable insurance carriers;provided, however, that no monetary settlement or judgment associated with the Action, if any, may be enforced against the assets of the Debtors' estates.
3. The Plaintiff shall have authority to collect all monetary or other forms of remuneration or relief, if any, to which such parties may be determined to be entitled in connection with the Action only from the Debtors' applicable insurance carriers. The Plaintiff hereby waives his rights to collect any such monetary or other forms of remuneration or relief from the Debtors or the Debtors' estates.
4. The Plaintiff is not waiving any claims against the Debtors' applicable insurance carriers.
5. The Debtors shall have no obligation whatsoever to make any distribution of any property to the Plaintiff, including on account of any proof of claim the Plaintiff has filed, could have potentially filed or could potentially file against the Debtors and the Debtors' estates.
6. The Plaintiff agrees to execute a release in favor of the Debtors and the Debtors' general liability insurance carrier upon the resolution and/or satisfaction of the Action or settlement negotiations from the applicable general liability policy as determined by the State Court or by the mutual agreement of the parties.
7. Neither this Stipulation and Agreed Order nor any terms contained herein shall be offered or received in evidence or in any way referred to in any legal action or administrative proceeding among or between the parties hereto, other than as may be necessary (a) to obtain approval of or to enforce this Stipulation and Agreed Order in the Debtors' Chapter 11 Cases; (b) to seek damages or injunctive relief in connection therewith; or (c) to move that the automatic stay provision of section 362 of the Bankruptcy Code has been modified to allow prosecution of the Action to proceed in the State Court.
8. Nothing herein is intended or shall be construed to waive any defenses, setoffs, objections or counterclaims that the Debtors or the Debtors' applicable insurance carriers may have with respect to the Action.
9. This Court shall retain jurisdiction to hear and determine all matters related to the entry of this Stipulation and Agreed Order. The Plaintiff consents to the jurisdiction of this Court to resolve any disputes or controversies between the parties hereto arising from or related to this Stipulation and Agreed Order.
10. This Stipulation and Agreed Order is subject to the approval of this Court, and the terms and provisions of the agreement contained herein shall be void and of no further force and effect if such approval is not granted.
11. Each of the undersigned counsel represents that he or she is authorized to execute this Stipulation and Agreed Order on behalf of his or her respective client.
12. This Stipulation and Agreed Order may be executed in multiple facsimile or original counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
13. The modification of the automatic stay under section 362 of the Bankruptcy Code, as set forth in this Stipulation and Agreed Order, is limited to the Plaintiff and nothing herein is intended or shall be construed to modify, terminate or in any way affect the automatic stay provision of section 362 of the Bankruptcy Code as it pertains to any other party involved in the Action. The automatic stay provision of section 362 of the Bankruptcy Code as it pertains to such other parties shall remain in full force and effect.