Opinion
Case No. 399-02649, Jointly Administered
January 28, 2004
Paul G. Jennings, BASS, BERRY SIMS PLC, Nashville, TN, for Debtors and Debtors-in-Possession
Beth A. Dunning, BASS, BERRY SIMS PLC, Nashville, TN, for Debtors and Debtors-in-Possession
John Wm. Butler, Jr., George N. Panagakis, Chicago, IL, for Debtors and Debtors-in-Possession
David W. Houston, IV GREENEBAUM DOLL MCDONALD PLLC, Nashville, TN, for the Movant
Douglas L. Bates, FLASTER, KOPPEL BATES, Plantation, FL, for the Movant
AGREED ORDER RESOLVING MOTION OF WESLEY SNYDER FOR RELIEF FROM THE AUTOMATIC STAY
This matter is before the Court upon the Motion of Wesley Snyder for Relief from the Automatic Stay (the "Motion"), filed by Wesley Snyder (the "Movant"), pursuant to which the Movant seeks relief from the automatic stay to continue a certain workers compensation proceeding (the "Compensation Proceeding") commenced by the Movant against Service Merchandise Company, Inc. ("Service Merchandise"); and the Movant and Service Merchandise having agreed, as signified by the signatures of counsel below, to a resolution of the Motion on the terms and conditions set forth herein; and the Court being otherwise sufficiently advised,
IT IS HEREBY FOUND:
(a) On March 27, 1999 (the "Petition Date"), Service Merchandise and 31 of its affiliates (collectively, the "Reorganized Debtors") each filed voluntary petitions in this Court for reorganization relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. § 101, et seq., as amended (the "Bankruptcy Code"). On March 29, 1999, the Court granted the Reorganized Debtors' motion for an order consolidating a prior involuntary chapter 11 petition filed only against Service Merchandise on March 15, 1999 (the "Involuntary Petition"), and for joint administration and procedural consolidation of these chapter 11 cases.
(b) The Court entered its Findings of Fact, Conclusions of Law, and Order Under 11 U.S.C. § 1129(a) and (b) and F.R.Bankr.P. 3020 Confirming the First Amended Joint Plan of the Reorganized Debtors, as Modified, (the "Confirmation Order") on May 13, 2003. The First Amended Joint Plan of Service Merchandise Company, Inc. and its Affiliated Debtors, as modified (the "Plan") became effective on May 27, 2003 (the "Effective Date"). Between the Petition Date and the Effective Date, the Reorganized Debtors remained as debtors-in-possession pursuant to section 1107(a) and 1108 of the Bankruptcy Code.
(c) Prior to the Petition Date, the Movant commenced the Compensation Proceeding in Broward County, Florida, seeking to establish a right to additional workers compensation benefits against Service Merchandise related to an alleged accident that occurred on March 15, 1993 (the "Accident").
(d) By prior Order, this Court set May 15, 2000 as the general claims bar date and required all persons or entities with claims against the Reorganized Debtors to file proof of such claims by such date, except to the extent such claim is entitled to priority as an administrative expense of the Reorganized Debtors' estates. The Movant has never filed any proof of any claim against the Reorganized Debtors in these cases.
(e) On the Petition Date, all acts to proceed with and continue the Compensation Proceeding were automatically stayed under 11 U.S.C. § 362(a) (the "Automatic Stay"). Moreover, pursuant to the Confirmation Order all such acts were permanently enjoined (the "Discharge Injunction").
(f) The Movant desires to continue the Compensation Proceeding against Service Merchandise to conclusion in order to attempt to establish a right to benefits and pursue recovery of any liquidated, final right to additional benefits (an "Established Compensation Claim") from any insurance coverage (the "Insurance Coverage") that is available to satisfy such an Established Compensation Claim under any valid insurance policy (an "Insurance Policy") insuring the Reorganized Debtors, excluding any self-insured retention of liability by the Reorganized Debtors under such Insurance Policy.
(g) Except as expressly provided herein, the Movant, on behalf of himself, his heirs, representatives and assigns, has agreed, notwithstanding any right heretofore or in the future asserted by the Movant to participate in any distribution of assets of the Reorganized Debtors, and notwithstanding any self-insured retention of liability or deductible to be paid by the Debtors under any applicable Insurance Policy, to waive any and all claims they may have against the Debtors in these bankruptcy cases and any corresponding rights to participate in any distribution of assets of the Debtors. The Movant expressly understands that he, his heirs, representatives and assigns, may not seek satisfaction of any Established Compensation Claim, any other claim for benefits, any claim for payment of a deductible or self-insured retention of liability and/or any other claim from any assets of the Debtors, and in no event will the Debtors, their assets or their estates be liable in any other way whatsoever with respect to the payment or satisfaction of any Established Compensation Claim, any other claim for benefits, any claim for payment of a deductible or self-insured retention of liability and or any other claims or rights that the Movant might otherwise now or in the future have against the Reorganized Debtors related to the Compensation Proceeding, the Accident, any injuries or damages arising from or related to the Accident and/or any Insurance Policy held by the Reorganized Debtors.
(h) The Movant acknowledges that the Reorganized Debtors have made no representations or warranties that there is any available Insurance Coverage and that he has had an opportunity to consult with counsel concerning the waiver as expressly provided in this Order and acknowledge that, in agreeing to such waiver, they have not relied on any promises or representations by the Reorganized Debtors or any party acting on behalf of the Reorganized Debtors, including any representations concerning the availability of Insurance Coverage.
(i) In exchange for the waivers granted by the Movant herein, the Reorganized Debtors have agreed to modify the Discharge Injunction solely on the terms set forth herein.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED:
1. The Discharge Injunction with respect to the Compensation Proceeding is hereby modified in accordance with the terms set forth in this Agreed Order.
2. The Discharge Injunction is partially lifted (1) to permit the Compensation Proceeding to proceed and continue to a final judgment, award or settlement, and (2) to permit the Movant to attempt to recover any Established Compensation Claim from the Insurance Coverage; provided that no proceedings in the Compensation Proceeding, including, without limitation, oral argument or discovery, shall be scheduled for any date prior to thirty (30) days after entry of this order; and provided that the Movant, and all persons acting on behalf of the Movant shall use best efforts in proceeding with the Compensation Proceeding, including, without limitation, scheduling discovery or other proceedings, so as not to interfere with the administration of these bankruptcy cases and the wind up of the bankruptcy estates under the Plan.
3. Except as expressly provided for herein, notwithstanding the partial lifting of the Discharge Injunction as set forth herein, the Discharge Injunction remains in effect with respect to any and all actions to collect or enforce any claims against the Reorganized Debtors or the Reorganized Debtors' estates and/or assets, and any Established Compensation Claim in the Compensation Proceeding shall be enforceable and collectable, if at all, only from, and to the extent of, any Insurance Coverage.
4. Except as expressly provided for herein, notwithstanding any proof of claim filed, or to be filed, by or on behalf of the Movant in these cases, and except as expressly provided herein, (i) the Movant, on behalf of himself, his heirs, representatives and assigns, shall be and hereby is deemed to have waived, and the Reorganized Debtors, their estates, successors, assigns, affiliates, officers, directors and employees are hereby released from, any and all claims they may have against the Debtors in these bankruptcy cases and any corresponding rights to participate in any distribution of assets of the Debtors; (ii) the Movant, his heirs, representatives and assigns, may not seek satisfaction of any Established Compensation Claim, any other claim for benefits, any claim for payment of a deductible or self-insured retention of liability and/or any other claim from any assets of the Debtors; (iii) in no event will the Debtors, their assets or their estates be liable in any other way whatsoever with respect to the payment or satisfaction of any Established Compensation Claim, any other claim for benefits, any claim for payment of a deductible or self-insured retention of liability and/or any other claims or rights that the Movant might otherwise now or in the future have against the Reorganized Debtors related to the Compensation Proceeding, the Accident, any injuries or damages arising from or related to the Accident and/or any Insurance Policy held by the Reorganized Debtors; and (iv) any and all claims asserted, or to be asserted, by or on behalf of the Movant in a proof of claim or other pleading filed in these bankruptcy cases are hereby disallowed.
5. Notwithstanding anything in this Order, to the contrary, no waiver or release of claims granted hereunder shall be deemed to be a waiver or release of liability as against the Reorganized Debtors, but rather a waiver, release and/or limitation only of any right to assert or have allowed a claim in these cases, to collect any such liability from the Reorganized Debtors and/or to participate in any distribution of assets of the Reorganized Debtors.
6. Nothing in this Order shall be deemed an agreement, admission or acknowledgment by the Reorganized Debtors of the existence or availability of any Insurance Coverage or the non-existence of any defenses by any insurance company to liability for any Insurance Coverage.
7. Nothing in this Order shall be deemed an admission of fact on the part of the Reorganized Debtors with respect to any of the claims of the Movant or any facts alleged in the Motion or in the Compensation Proceeding.
8. Nothing in this Order shall be deemed an agreement or acknowledgment by the Reorganized Debtors to provide assistance or to cooperate with the Movant or any other party in the efforts to prosecute or defend against any asserted in the Compensation Proceeding, except to the extent that the Reorganized Debtors can be compelled to produce discovery and/or testimony in the Compensation Proceeding.
9. Notwithstanding anything in this Order to the contrary, the Discharge Injunction shall be fully reimposed and the partial lifting of the Discharge Injunction provided for herein shall be revoked immediately upon any party, including, without limitation, any insurance company or other indemnitor, asserting any new, additional or modified claims or causes of action against any of the Reorganized Debtors in the Compensation Proceeding or otherwise related to the Compensation Proceeding or the claims asserted by the Movant in such proceeding, except that the Movant may continue to assert against the Reorganized Debtors a right to additional benefits in accordance with any existing and valid determination of right to permanent workers compensation benefits related to the Accident and in accordance with the limitations in this Order for payment, satisfaction and/or recovery of any Established Compensation Claim.
10. This Court shall retain jurisdiction to hear any matters or disputes arising from or relating to this Order.