Opinion
No. 02-25434-TTG, (Jointly Administered), Adversary No. 05-01027-TTG.
November 17, 2005
FOSTER PEPPER SHEFELMAN PLLC Christopher M. Alston, WSBA No. 18823 Courtney M. Anderson, WSBA No. 34376 Attorneys for Trustee Diana K. Carey.
LANE POWELL PC Susan Brye Jahnke, WSBA No. 25125 Attorneys for Global Payments Direct, Inc.
CROWLEY, HAUGHEY, HANSON, TOOLE DIETRICH P.L.L.P. Alan C. Bryan, Montana Bar No. 4501 Attorneys for Frontline Processing Corporation.
WRIGHT ASSOCIATES, P.S. Gregory S. Wright, WSBA No. 20609 Attorneys for Cindy Britten
THIS MATTER came on before the Court on notice and hearing upon the motion of Diana K. Carey ("Trustee"), chapter 11 trustee for the jointly administered estates of the above named Debtors, for an order approving the Settlement and Mutual Release Agreement ("Settlement"), a copy of which is attached as Exhibit A, between she and Global Payments Direct, Inc. ("Global"), Frontline Processing Corporation ("Frontline"), and Cynthia Britten ("Cindy Britten"), pursuant to 11 U.S.C. § 704, Fed.R.Bankr.P. 9019, LR 9013-1(b)(6) and LR 9019-1. A hearing to consider the motion was held, and the Court, having reviewed the records and files herein, having heard the argument of counsel, if any, and good cause having been shown, hereby finds that notice to all creditors and parties in interest was proper, and no further notice is required.
Now therefore, it is hereby
ORDERED that the Settlement and Mutual Release Agreement between the Trustee, Global, Frontline, and Cindy Britten is hereby APPROVED.
SETTLEMENT AND MUTUAL RELEASE AGREEMENT
This Settlement and Mutual Release Agreement ("Agreement"), dated this ____ day of September, 2005, is by and between Global Payments Direct, Inc. ("Global"), Frontline Processing Corporation ("Frontline"), Cynthia Britten, and Diana K. Carey ("Trustee"), as chapter 11 trustee of the substantively consolidated bankruptcy estates of Wade Cook Financial Corporation ("WCFC"), the Stock Market Institute of Learning ("SMILe"), Information Quest, Inc., and Lighthouse Books, Inc., fka Lighthouse Publishing Group, Inc. (collectively "Debtors"). In exchange for the consideration described herein, the parties agree as follows:
1. Recitals.
a. Separate involuntary petitions were filed against WCFC and SMILe on December 19, 2002. An order administratively consolidating the two cases was entered on December 20, 2002, and on January 17, 2003, an Order for relief was entered against both entities. On January 23, 2003, this Court entered an order appointing Diana K. Carey the chapter 11 trustee.
b. On January 18, 2005, the Trustee commenced an adversary proceeding against Global and Frontline in the United States Bankruptcy Court for the Western District of Washington ("Bankruptcy Court"), under case number 05-01027 ("Adversary Proceeding"). In her complaint, the Trustee alleged breach of contract, avoidance of preferential and postpetition transfers, violation of the automatic stay, and turnover.
c. Frontline and Global denied the allegations in the Trustee's complaint. Frontline also asserted counterclaims against the Trustee, and third-party claims against Cynthia Britten, former CFO of WCFC ("Cindy Britten").
d. Without admitting any liability, and to avoid the uncertainty and expense of litigation, Frontline, Global, the Trustee, and Cindy Britten desire to settle all claims subject to the terms of this Agreement, and pending approval of this Agreement by the Bankruptcy Court.
2. Settlement Payments.
(a) Initial Payment. No later than the close of business on November 14, 2005, Global and Frontline shall pay the Trustee the sum of three hundred thousand ($300,000) United States Dollars (the "Initial Payment") by wiring said amount to the Trustee's trust account at Karr Tuttle Campbell. Global and Frontline are jointly liable for this Initial Payment. This Initial Payment shall be held in trust until the Bankruptcy Court has approved this Agreement.
(b) Future Payments. In addition, Frontline shall pay the Trustee the additional total sum of one hundred thousand ($100,000) United States Dollars, payable in ten (10) payments on the following schedule: Beginning November 15, 2005, and continuing for nine (9) consecutive months thereafter, Frontline will pay to the Trustee the sum of ten thousand ($10,000.00) United States Dollars, which must be received by the Trustee on or before the fifteenth day of each month by sending said payments to Diana K. Carey, Trustee, Karr Tuttle Campbell, 1201 Third Avenue, Suite 2900, Seattle, Washington 98101.
3. Agreement Subject to Bankruptcy Court Approval. This Agreement is subject to approval by the Bankruptcy Court. The Trustee represents that she will move for approval of this Agreement after its execution by all parties. In the event that this Agreement is not approved by the Bankruptcy Court for any reason, this Agreement shall be without effect, and all of the rights, remedies, claims and defenses the Trustee, Global, Frontline, and Cindy Britten may have against one another shall be reinstated as if this Agreement did not exist, and any funds paid to the Trustee under this Agreement shall be returned.
4. Mutual Releases. The Trustee, the Debtors, Cindy Britten, their agents, attorneys, partners, predecessors, successors and assigns, hereby release Global and Frontline from all Released Claims. Global and Frontline, their agents, attorneys, partners, predecessors, successors and assigns, hereby release the Trustee, the Debtors, and Cindy Britten from all Released Claims.
(a) "Released Claims" means any and all claims, cross claims, counter-claims, setoffs, demands, causes of action, actions, rights, liabilities, contract obligations, damages, attorneys' fees, costs, torts, suits, debts, sums of money, accountings, reckonings, bills, covenants, controversies, agreements, promises, variances, trespasses, extents and executions whatsoever, at law or in equity or otherwise, whether direct or indirect, known or unknown, which the releasing parties now own or hold, or have at any time heretofore owned or held, or may in the future own or hold, against the persons and entities they are releasing or any of them, in any capacity, which (i) are related in any way, directly or indirectly, to the Adversary Proceeding, (ii) are or may be based upon any facts, acts, omissions, conduct, purchases, representations, contracts, agreements, claims, events, causes or matters of any kind occurring or existing at any time on or before the date of this Agreement, and (iii) all claims, however designated, whether prepetition, postpetition or administrative, that could be or could have been filed in the Debtors' bankruptcy case.
(b) Global and Frontline expressly reserve all rights to assert any claims against any and all persons or entities not specifically identified as a released party herein, including, but not limited to, Wade B. Cook. Global and Frontline additionally reserve any and all claims, defenses and rights as between them that arise from or in any way relate to this Agreement or claims asserted by the Trustee in the Adversary Proceeding.
(c) The releases set forth in Section 4(a) of this Agreement shall not extend to any claims that arise out of this Agreement or out of any other document executed or delivered pursuant to this Agreement.
5. Finality of Mutual Releases of Claims. It is intended by the undersigned that this Agreement shall be complete and shall not be subject to the claim of mistake of fact or law by the undersigned, and that it expresses a full and complete settlement of liability claimed against the undersigned, and regardless of inadequacies of the consideration, this Agreement is intended to avoid litigation, is entered into in good faith, and is final and complete.
6. Default. A party shall be in default under this Agreement if 1) it fails to make any payment when due and does not make the required payment within fifteen (15) calendar days after receipt of a written notice that the payment has not been made when due, 2) if any payment received under this Agreement is recovered by a trustee in bankruptcy, a receiver, or an assignee for the benefit of creditors, and/or 3) if it fails to perform any other obligation or act required under this Agreement.
7. Dismissal of Adversary Proceeding. After entry of a final order by the Bankruptcy Court approving this Agreement, the parties shall execute and file, or cause to be executed and filed, a Stipulated Order of Dismissal with Prejudice of the Adversary Proceeding in the form attached hereto as Exhibit A, dismissing with prejudice all claims, counterclaims, and third-party claims in the Adversary Proceeding, with each party paying its own fees and costs. The parties hereby waive any rights to appeal from the Stipulated Order of Dismissal.
8. Notices. All notices, requests, demands and other communications called for or contemplated by this Agreement shall be in writing, and shall be deemed to have been duly given by mailing the same by first-class mail, postage prepaid; by delivering the same by hand; or by sending the same by facsimile; to the following addresses, or to such other addresses as the parties may designate by written notice in the manner aforesaid, provided that communications that are mailed shall not be deemed to have been given until three business days after mailing:
If to the Trustee: Christopher M. Alston or Courtney M. Anderson Foster Pepper Shefelman PLLC 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 Telephone: (206) 447-4400 Facsimile: (206) 447-9700
If to Global: Susan Brye Jahnke Lane Powell PC 1420 Fifth Avenue, Suite 4100 Seattle, Washington 98101 Telephone: (206) 223-6259 Facsimile: (206) 223-7107
If to Frontline: Alan C. Bryan 490 N. 31st Street, Suite 500 Billings, Montana 59101-1288 Telephone: (406) 252-3441 Facsimile: (406) 256-8526
If to Cindy Britten: Gregory S. Wright Wright Associates, P.S. 10900 NE Fourth Street, Suite 2300 Bellevue, Washington 98004 Telephone: (425) 818-2155 Facsimile: (800) 621-2949
9. Governing Law. This Agreement is entered into under the laws of the state of Washington, and if it becomes necessary to interpret or enforce any of its terms, it is the intent of all parties that the laws of the state of Washington shall apply, without giving effect to principles or provisions thereof related to conflicts of laws or choice of laws.
10. Consent To Jurisdiction And Venue. All parties shall submit and not object to jurisdiction and venue in the United States Bankruptcy Court for the Western District of Washington at Seattle in connection with any claims arising out of this Agreement.
11. Attorneys' Fees. Should it be necessary for any party to this Agreement to initiate legal proceedings to adjudicate any issues arising hereunder or under any document executed pursuant to the Exhibit attached hereto, the party or parties to such legal proceedings who prevail shall be entitled to reimbursement of their attorneys' fees, costs, expenses and disbursements (including the fees and expenses of expert and fact witnesses) reasonably incurred or made by the prevailing parties in preparing to bring suit, during suit, on appeal, on petition for review, and in enforcing any judgment or award, from the party or parties who do not prevail.
12. Finality of Agreement. This Agreement constitutes the complete and final expression of the agreement of the parties. This Agreement may not be modified, interpreted, amended, waived, or revoked orally, but only by a writing that is both (a) signed by the party against whom such changes or interpretations are to be enforced, and that (b) expressly provides that it is intended to change or interpret this Agreement.
13. Equal Participation in Drafting. The parties have had an equal opportunity to participate in the drafting of this Agreement and the Exhibit attached. No ambiguity shall be construed against any party based upon a claim that the party drafted the ambiguous language.
14. Integration. Except as otherwise set out in this Agreement, this Agreement supersedes and replaces all earlier agreements, discussions, and representations, all of which are merged into and superseded by this Agreement. No party is entering into this Agreement in reliance on any oral or written promises, inducements, representations, understandings, interpretations, or agreements other than those contained in this Agreement.
15. Survival. If any provision of this Agreement is held, for any reason, to be invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.
16. Counterparts. This Agreement may be executed in identical facsimile counterparts, notwithstanding that all parties have not signed the same counterpart, with the same effect as if all parties had signed the same document. Such counterparts shall be construed as and shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date first above mentioned.
DIANA K. CAREY, as Trustee of the bankruptcy estate of Wade Cook Financial Corporation, the Stock Market Institute of Learning, Information Quest, Inc., and Lighthouse Books, Inc., fka Lighthouse Publishing Group, Inc.
DIANA K. CAREY Dated: 10/27/05
GLOBAL PAYMENTS DIRECT, INC., a New York corporation
By: ______________________ Dated: ________________
______________________ (print name)
Its: _________________
FRONTLINE PROCESSING CORPORATION, a Nevada corporation
By: _______________________
Christopher Kittler (print name)
Its: President and CEO
STIPULATED ORDER OF DISMISSAL OF ADVERSARY PROCEEDING WITH PREJUDICE
THIS MATTER having come on before this Court on the motion of Diana K. Carey, chapter 11 Trustee for the estates of the above named Debtors ("Trustee"), for this Court to approve the Settlement and Mutual Release Agreement ("Settlement Agreement") between the Trustee, Global Payments Direct, Inc. ("Global"), Frontline Processing Corporation ("Frontline"), and Cynthia Britten, and this Court having entered an order approving the Settlement Agreement, and the Trustee, having received the $300,000 payment from Global and Frontline, and such Settlement Agreement providing for the dismissal of this adversary proceeding after entry of an order by this Court approving the Settlement Agreement, it is now, therefore, hereby
ORDERED that this adversary proceeding shall be and hereby is dismissed with prejudice and without fees or costs to any party.