Opinion
Case No. 302-00979, Jointly Administered
January 23, 2004
David E. Lemke, Waller Lansden Dortch Davis A Professional Limited Liability Company, Tennessee, FOR THE BANK OF NEW YORK, AS INDENTURE TRUSTEE;
Keith M. Aurzada Esq., Akin Gump Strauss Hauer Feld, LLP, TX, Randal S. Mashburn Esq., Baker, Donelson, Bearman, Caldwell Berkowitz, PC, TN, FOR THE COMMITTEE,
Craig V. Gabbert Jr. Esq., Harwell Howard Hyne Gabbert Manner, P.C., TN, Joel M. Walker, Duane Morris LLP, PA, FOR THE DEBTORS AND THE REORGANIZED DEBTORS
AGREED ORDER GRANTING THE BANK OF NEW YORK, AS INDENTURE TRUSTEE, AN ADMINISTRATIVE EXPENSE CLAIM FOR MAKING A SUBSTANTIAL CONTRIBUTION IN THE CASE
As evidenced by the signatures of counsel below, the Debtors, the Reorganized Debtors, the Official Committee of Unsecured Creditors, and The Bank of New York, as Indenture Trustee ("BNY" or "Trustee"), hereby agree, pursuant to 11 U.S.C. § 503(b), that BNY's fees and expenses in the amount of $135,520.84 shall be paid as an administrative expense claim in this case on the basis that BNY made a substantial contribution in this case. This Court accordingly finds and orders as follows:
1. On January 24, 2002 (the "Petition Date"), the Debtors filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code,
2. BNY is indenture trustee for holders of those certain 9 7/8% Senior Notes (the "Notes") issued by the Debtors on June 8, 1998, in the original principal amount of $100,000,000, pursuant to that certain indenture dated as of June 8, 1998 (the "Indenture") between Pen Holdings, Inc., et al, (the "Debtors").
3. On the Petition Date, the Debtor was indebted to BNY in its capacity as indenture trustee in the amount of $106,088,897.57.
4. At the time this case was filed, and for the entirety of the case, the claim of BNY under the Indenture represented, by far, the largest single unsecured claim of the Debtors.
5. To the best of BNY's knowledge, numerous individuals and several institutions hold the Notes.
6. On or about February 4, 2002, BNY, along with two institutions which owned some of the Notes, was appointed to the official unsecured creditors' committee (the "Committee").
7. Following the Company's bankruptcy filing, BNY retained the law firm of Waller Lansden Dortch Davis, A Profession Limited Liability Company, to represent its legal interests in this case.
8. For the period while this case progressed, BNY took an active part in the activities of the Committee.
9. During the course of the case, a majority of the Committee's meetings were held telephonically. BNY representatives and/or its counsel attended a vast majority of those meetings.
10. BNY's efforts and advocacy for certain positions was effective in moving many issues that came before the Committee toward compromise and consensus.
11. During the course of the case, BNY sent numerous notices to Noteholders about the progress of the case and significant events occurring in the case. In addition to notices, BNY or its counsel fielded and provided non-confidential information to numerous investors concerned about their investment and return on their investment. BNY also prepared and filed a proof of claim in the case on behalf of all Noteholders.
12. BNY and its counsel had substantial input and involvement in the structure, negotiation and resolution of the terms and conditions of the plan of reorganization ultimately confirmed in this case (the "Plan"), as well as the solicitation of the Noteholders.
13. On October I, 2003, this Court confirmed the Plan. The Plan provides that all reasonable post-petition fees and expenses of BNY will be paid as an Administrative Claim to the extent such fees and expenses are agreed to by the Debtors, the Reorganized Debtors, and BNY, and are approved by the Court. As evidenced by their counsels' signatures below, the Debtors, the Reorganized Debtors, and BNY have agreed to the fees and expenses provided in this Order.
14. BNY has provided to this Court, the Office of the United States Trustee, the Reorganized Debtors, the Debtors, and the Committee the detail of its billings.
15. BNY seeks the allowance and payment of its fees and expenses in the amount of $135,520.84 on account of the substantial contribution BNY and its counsel made to this bankruptcy case and the Debtor's bankruptcy estate, pursuant to 11 U.S.C. § 503(b).
16. The efforts of BNY in this case, as set forth herein, have fostered and enhanced the progress of reorganization. BNY has shown that the fees it seeks resulted in an actual and demonstrable benefit to the Debtors' estate and the creditors. A substantial contribution is appropriate where a two-part inquiry is met: (1) whether the benefit was rendered solely for the party's individual self-interest or for the benefit of the estate; and (2) whether the party's action conferred a direct, substantive, or meaningful benefit to the bankruptcy estate. BNY has demonstrated above that these factors have been met in this case.
IT IS, THEREFORE, ORDERED that BNY shall be and hereby is granted an Administrative Claim in the amount of $135,520.84 as a substantial contribution under 11 U.S.C. § 503(b), and that this Administrative Claim shall be paid in the manner set forth in the Plan for payment of other Administrative Claims in this case.