Opinion
No. 02-13533 (AJG) Jointly Administered.
October 31, 2005
John Waters, Esq., Iowa Department of Revenue, Des Moines, IA, Attorney for Iowa Department of Revenue.
STINSON MORRISON HECKER LLP, Marc E. Albert, Esq., Washington, D.C., Counsel to Reorganized Debtors.
STIPULATION AND CONSENT ORDER CONCERNING CLAIM NUMBER 38042 FILED BY IOWA DEPARTMENT OF REVENUE
WorldCom, Inc., et al., the Reorganized Debtors in the above referenced case, (the WorldCom entities) and the Iowa Department of Revenue (IDR) stipulate as follows:
WHEREAS:
1. On March 24, 2004, the IDR filed a proof of claim 38042 for unpaid 2003 Iowa corporation income taxes owed by MCI WorldCom Communications, Inc., in the estimated amount of $1,600,000. The IDR asserts that its claim is entitled to priority as an administrative expense under 11 U.S.C. § 503(b).
2. On August 31, 2005, an objection to IDR's proof of claim number 38042 was filed in Debtors' Eighty-Third Omnibus Objection to Proofs of Claims (Objection).
3. On September 9, 2005 the Objection to the IDR's proof of claim 38042 was withdrawn and the proof of claim was again subject to the Order Extending Deadline to File Objections to Claims dated August 30, 2005.
4. The IDR is a party to the Settlement Agreement and Release ("Agreement") under which the Royalty Claims, as defined in the Agreement, are completely and finally settled, and which also includes certain provisions related to tax year 2003.
5. The WorldCom entities intend to file an amended 2003 Iowa corporation income tax return and pay the amount shown due.
6. Any remaining disputes concerning the 2003 Iowa income tax liabilities, including penalty and interest, should be resolved outside of the pending bankruptcy case and consistent with the provisions of the Agreement.
7. To date, the Bankruptcy Court has not set a bar date for filing requests for payment of administrative expenses under 11 U.S.C. § 503(b).
WHEREFORE:
1. Proof of claim number 38042 in the amount of $1,600,000 is withdrawn without prejudice.
2. Notwithstanding the withdrawal of Claim No. 38042, the IDR shall retain all rights to assert any claims for 2003 corporation income tax liabilities, including penalty and interest, against the WorldCom entities or their successors and assignees.
3. If the IDR believes that the WorldCom entities or their successors and assignees have an unpaid Iowa corporation income tax liability for 2003, the IDR may assess and collect such taxes, including penalty and interest, in the manner and within the time frame provided by Code of Iowa and the Iowa Administrative Code.
4. Notwithstanding paragraphs 3 and 4 above, any right to assert a claim for 2003 and any assessment for 2003 are subject to the provisions of the Agreement.
5. In making any assessment for 2003, the IDR shall not be required to file a proof of claim or a request for payment of administrative expense with the Bankruptcy Court concerning 2003 Iowa corporation income tax liabilities. Neither the WorldCom entities, nor their successors and assignees, shall assert that either this Stipulation and Order or the bankruptcy case provides a defense in any future action concerning 2003 Iowa corporation income tax liabilities.
6. This Stipulation can be modified only by the written assent of both parties.
IT IS SO ORDERED.