Opinion
Case No. 02-13533 (AJG), (Jointly Administered)
December 17, 2002
Adam P. Strochak, Marcia L. Goldstein, Lori R. Fife, Alfredo R. Perez, Esq., Adam P. Strochak, Esq., WEIL, GOTSHAL MANGES LLP, New York, NY, Attorneys for Debtors and Debtors in Possession.
JAMES B. COMEY, United States Attorney for the Southern District of New York, Attorney for the United States.
Meredith E. Kotler, MEREDITH E. KOTLER, WENDY H. SCHWARTZ, New York, New York, Assistant United States Attorneys.
STIPULATION AND ORDER MODIFYING AUTOMATIC STAY
WHEREAS, on July 21, 2002, Debtors filed their Chapter 11 petition herein and continue to operate their businesses as debtors in possession; and
WHEREAS, on August 20, 2002, in the United States Court of Federal Claims, Debtor MCI WorldCom Communications, Inc. (AMCI@), filed a Complaint (the AComplaint@) against the United States of America (the AGovernment@), alleging breach of contract and equitable estoppel in connection with payment of payphone surcharges under a contract for telecommunications services between the General Services Administration and MCI, styled MCI WorldCom Communications, Inc. v. United States of America, Case No. 02-1011C (the ACourt of Federal Claims Action@); and
WHEREAS, in response to the Complaint, the Government intends to, inter alia, assert counterclaim(s) seeking a refund of surcharges that the Government believes were improperly billed by MCI and paid by the Government or by other authorized customers; and
WHEREAS the Government's time to respond to the Complaint is December 20, 2002; and
WHEREAS the Government requested, and the Debtors have agreed, to lift the automatic stay to permit adjudication of any counterclaim(s) asserted by the Government before the Court of Federal Claims;
IT IS HEREBY STIPULATED AND ORDERED that the automatic stay provisions of 11 U.S.C. § 362(a) are modified to permit the Government to file and prosecute its counterclaim(s) in the Court of Federal Claims Action, solely for purposes of determining liability and liquidating the amount of such counterclaim(s); and
IT IS FURTHER STIPULATED AND ORDERED that nothing herein shall authorize the Government to enforce any judgment on its counterclaim(s) that may be entered in its favor, which judgment shall constitute a prepetition claim, without further order of this Court; and
IT IS FURTHER STIPULATED AND ORDERED that to the extent any judgment in the Government's favor with respect to its counterclaim(s) is subject to a right of setoff, the Government shall not effect such setoff against the Debtors without further order of this Court.