Opinion
Case No. 04-13819 Jointly Administered.
November 22, 2004.
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., Michael J. Canning, Esq., ARNOLD PORTER LLP, Denver, Colorado, and Washington, DC, and New York, New York, and Lawrence E. Rifken, Esq. (VSB No. 29037), Douglas M. Foley, Esq. (VSB No. 34364), David I. Swan, Esq., McGUIREWOODS LLP, McLean, Virginia, Counsel to the Debtors and Debtors-in-Possession.
ORDER AUTHORIZING THE DEBTORS TO ENTER INTO FORMS OF STIPULATION MODIFYING THE AUTOMATIC AND COMPROMISING CLAIMS
Upon the motion (the "Motion") of the Debtors and debtors-in-possession in the above-captioned cases for an order pursuant to section 362 of the Bankruptcy Code and Bankruptcy Rule 9019 (i) modifying the Automatic Stay to permit certain pre-Petition Date litigation claims to proceed to settlement or judgment solely to the extent of available insurance proceeds and (ii) approving and authorizing the Debtors to enter into Stipulations, the form of which is attached hereto as Exhibit 1, with respect to the release of such claims; and this Court having determined that granting the relief requested in the Motion is in the best interests of the Debtors, their estates and creditors; and it appearing that proper and adequate notice has been given and that no other or further notice is necessary; and upon the record herein; and after due deliberation thereon; and good and sufficient cause appearing therefore,
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Motion.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1. The Motion is GRANTED. Any responses thereto, to the extent they have not been withdrawn, are overruled.
2. Any Stipulation, in a form substantially similar to the form attached hereto as Exhibit 1, is approved in all respects.
3. Any Stipulation entered into between the Debtors and a Claimant must be served via facsimile on (i) counsel (if retained) for the applicable insurance carrier(s), (ii) the insurance carrier(s), (iii) the Office of the United States Trustee, and (iv) counsel for the official committee of unsecured creditors. If no objection is received by the Debtors within five (5) business days of service of the proposed Stipulation, then the Debtors are authorized to file such Stipulation with the Court and such Stipulation will become final upon filing without further order of this Court.
4. Each such Stipulation filed with this Court shall be immediately effective to modify the Automatic Stay to permit the litigation or potential litigation described therein to proceed only to the extent of available insurance coverage of the Debtors and without further liability to the Debtors.
5. The Debtors do not, by this Order or in connection with the procedures established hereby, acknowledge the validity of any pre-Petition Date Claim, make any admission of liability or waive any of their employees' rights or remedies.
6. Claimants that received prior relief to proceed against available insurance pursuant to a stipulation in the Debtors' previous chapter 11 cases, do not need to file a motion for relief from the Automatic Stay in the Debtors' new chapter 11 cases in order to receive a new Stipulation. The Debtors shall complete a new Stipulation and send it to all such Claimants' counsel for signature within twenty (20) business days following the date of entry of this Order.
7. Nothing in this Order or any Stipulation shall create jurisdiction of the Bankruptcy Court over any existing or future claims asserted by any Claimants against the Debtors or any insurer whose policies are implicated.
8. Nothing in this Order or any Stipulation shall be deemed or construed to impact, impair, affect or determine any of the rights, remedies, defenses to coverage or other defenses of any insurer under or in respect of any insurance policy, and all rights and remedies of any insurer with respect to any such policy and all defenses to coverage and other defenses of any insurer under any such policy are expressly reserved and preserved.
Exhibit 1
Brian P. Leitch, Esq. Daniel M. Lewis, Esq. Michael J. Canning, Esq. ARNOLD PORTER LLP
370 Seventeenth Street, Suite 4500 Denver, Colorado 80202 (303) 863-1000 — and —
555 Twelfth Street, NW Washington, DC 20004 (202) 942-5000 — and —
399 Park Avenue New York, New York 10022 (212) 715-1000
Lawrence E. Rifken, Esq. (VSB No. 29037) Douglas M. Foley, Esq. (VSB No. 34364) David I. Swan, Esq. McGUIREWOODS LLP
1750 Tysons Boulevard, Suite 1800 McLean, Virginia 22102-4215 (703) 712-5000
Counsel to the Debtors and Debtors-in-Possession
IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION
In re: ) ) Case No. 04-13819 ) Jointly Administered US AIRWAYS, INC., et al., ) Chapter 11 ) Hon. Stephen S. Mitchell Debtors . ) )
The Debtors are the following entities: US Airways, Inc., US Airways Group, Inc., PSA Airlines, Inc., Piedmont Airlines, Inc. and Material Services Company, Inc.
STIPULATION MODIFYING AUTOMATIC STAY BETWEEN DEBTORS AND [CLAIMANT]
WHEREAS, on September 12, 2004 (the "Petition Date"), the Debtors and debtors-in-possession in the above-captioned cases, each filed with the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division (the "Court") its respective voluntary petition for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101- 1330 (as amended, the "Bankruptcy Code") commencing the above-captioned chapter 11 proceedings, consolidated jointly for administrative purposes only;
WHEREAS, prior to the Petition Date, [CLAIMANT] (the "Claimant") [commenced] [intended to commence] a civil action against, among others, [DEBTOR DEFENDANT(S)] (the "Debtor Defendant(s)"), in the [COURT], captioned [CASE CAPTION], asserting liability against the Debtor Defendant for property damage or injury to the Claimant (the "Claim");
WHEREAS, on the Petition Date, the Claimant was automatically stayed under 11 U.S.C. § 362(a) (the "Automatic Stay") from commencing or continuing an action to seek recovery for damages on the Claim;
[WHEREAS, on [DATE], Claimant filed a proof of claim ("Claim No. ____") in the Debtor Defendant's chapter 11 case;]
[WHEREAS, as of the date of this stipulation (the "Stipulation"), Claimant has not filed a proof of claim in the Debtor Defendant's chapter 11 case;]
[WHEREAS, on [DATE], Claimant filed a motion seeking a modification of and/or relief from the Automatic Stay (Docket No. ____) (the "Motion") in the Debtor Defendant's chapter 11 case;]
WHEREAS, the Claimant is willing to waive any and all claims against the Debtors and to seek recovery solely from the insurance coverage, if any, available under an insurance policy issued to the Debtor Defendant to satisfy the Claim (the "Available Coverage");
WHEREAS, the parties to the Stipulation have agreed to modify the Automatic Stay solely on the terms and conditions set forth herein;
WHEREAS, the Debtors are authorized under the Order Authorizing the Debtors to Enter Into Forms of Stipulation Modifying the Automatic Stay and Compromising Claims (Docket No. ____) (the "Compromise Order") to enter into and file this Stipulation with the Court; and
WHEREAS, pursuant to the Compromise Order, upon execution by the Debtors and filing of this Stipulation with the Court, the Stipulation will be fully effective without further order of Court;
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, subject to and in accordance with the Compromise Order, by and among the parties, as follows:
1. The Automatic Stay is hereby modified solely to the limited extent necessary to enable (a) the Claim to proceed to final judgment or settlement and (b) the Claimant to attempt to recover any liquidated final judgment or settlement on the Claim from Available Coverage, if any; provided, however, that any final judgment or settlement shall be reduced by (i) the amount of any applicable deductible or self-insured retention under the applicable insurance policy; and (ii) the share of liability under the applicable insurance policy of any insolvent or non-performing insurer or co-insurer (or any reinsurer of any insolvent or non-performing insurer or co-insurer); and further provided, however, that the Automatic Stay shall not be modified for purposes of permitting the Claimant to attempt to recover for intentional conduct or punitive damages.
2. It is expressly understood by the Claimant that the Claimant may seek satisfaction of the Claim only as set forth herein, and that in no event will the Debtors or their estates be liable to the Claimant in any other way whatsoever with respect to the Claim.
3. In connection with this modification of the Automatic Stay, the Claimant on behalf of herself/himself, her/his heirs, representatives and assigns, does hereby waive and/or release the Debtors and their estates, and their respective heirs, successors, assigns, affiliates, officers, directors and employees, from any and all claims, actions, causes of action, suits, debts, obligations, liabilities, accounts, damages, defenses or demands whatsoever, known or unknown, of any nature, except for their claim to the Available Coverage.
4. Claim No. ____ is hereby deemed to be withdrawn without further order of Court and the Debtors' claims and noticing agent is authorized and directed to remove Claim No. ____ and any and all other claims filed by or on behalf of Claimant from the Debtors' claims register; provided, however, that the withdrawal of any proof of claim shall not prejudice Claimant's ability to collect his/her Claim from the Available Coverage.
5. [The Motion is hereby deemed to be withdrawn without further order of Court.]
6. The agreement by the Debtors to the modification of the Automatic Stay on the terms and conditions set forth herein shall not be deemed an agreement by the Debtors to provide assistance to or to cooperate with the Claimant in any way in the efforts of the Claimant to prosecute the Claim or secure payment on the Claim under the Available Coverage.
7. Nothing contained herein shall be deemed an admission of liability or otherwise on the part of the Debtors or their insurance carriers with respect to the Claim.
8. Nothing in this Stipulation shall be deemed or construed to impact, impair, affect, determine, release, waive, modify, limit or expand: (i) the terms and conditions of any insurance policy; (ii) any of the rights, remedies, defenses to coverage and other defenses of any insurer under or in respect of any insurance policy; or (iii) any claim or payment right of any insurer against any of the Debtors including, but not limited to, any claim or payment right for, on account of, arising from or related to any premium, deductible, reimbursement, self-insured retention or otherwise. All such rights, remedies, defenses, defenses to coverage, claims and payment rights are expressly reserved and preserved. Further, all rights of subrogation and contribution of any insurer also are expressly reserved and preserved.
9. This Stipulation may be signed in counterpart originals, which, when fully executed, shall constitute a single original.
10. The Court shall retain jurisdiction to hear any matters or disputes arising from or relating to this Stipulation.
11. This Stipulation is effective upon filing without further order of Court.
Dated: McLean, Virginia STIPULATED AND AGREED: ____, 2004
Brian P. Leitch, Esq. Daniel M. Lewis, Esq. Michael J. Canning, Esq. ARNOLD PORTER LLP
370 Seventeenth Street, Suite 4500 Denver, Colorado 80202 (303) 863-1000 — and — 555 Twelfth Street, NW Washington, DC 20004 (202) 942-5000 — and — 399 Park Avenue New York, New York 10022 (212) 715-1000 — and —
________________________________________ Lawrence E. Rifken, Esq. (VSB No. 29037) Douglas M. Foley, Esq. (VSB No. 34364) David I. Swan, Esq. McGUIREWOODS LLP 1750 Tysons Boulevard, Suite 1800 McLean, Virginia 22102-4215 (703) 712-5000Counsel to the Debtors and Debtors-in-Possession STIPULATED AND AGREED:
_____________________________ [NAME] [ADDRESS] [PHONE]Counsel to the Claimant