Opinion
Case No. 02-13533 (AJG), (Jointly Administered).
June 22, 2005
Timothy W. Walsh, Esq. (TW-7409), DLA Piper Rudnick Gray Cary US LLP, New York, New York, and
Eric B. Miller, Esq., Heather A. Klink, Esq., DLA Piper Rudnick Gray Cary US LLP, Baltimore, Maryland, Attorneys for Debtors and Reorganized Debtors.
Lawrence C. Gottlieb, Esq. (LG 2565), Jeffrey L. Cohen, Esq. (JC 2556), Kronish Lieb Weiner Hellman LLP, New York, New York, Attorneys for Metromedia Fiber Network Services, Inc. and all affiliated entities.
STIPULATION AND AGREED ORDER RESOLVING PROOFS OF CLAIM FILED BY METROMEDIA FIBER NETWORK SERVICES, INC.
MCI, Inc. and certain of its direct and indirect subsidiaries (collectively, "MCI" or the "Reorganized Debtors") and Metromedia Fiber Network Services, Inc. ("MFN" and together with MCI, the "Parties") hereby agree and stipulate as follows:
RECITALS
WHEREAS, on July 21, 2002 (the "Commencement Date") and November 8, 2002, WorldCom, Inc. and certain of its direct and indirect subsidiaries (the "Debtors") commenced cases under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"). By Orders dated July 22, 2002 and November 12, 2002, these chapter 11 cases were consolidated for procedural purposes. During the chapter 11 cases, the Debtors operated their business and managed their properties as debtors and debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code;
WHEREAS, on or about January 22, 2003, MFN filed the following proofs of claim against the Debtors: (i) Claim No. 17789 in the amount of $652,336.88 ("Claim 17789"); (ii) Claim No. 17790 in the amount of $384,302.60 ("Claim 17790"); (iii) Claim No. 25693 in the amount of $10,407,240.00; and (iv) Claim No. 34510 in an unliquidated amount seeking rejection damages ("Claim 34510", and collectively with Claim 17789, Claim 17790 and Claim 25693, the "MFN Claims");
WHEREAS, on or about April 30, 2003, the Parties entered into that certain Asset Exchange Agreement by and between MCI Worldcom Network Services, Inc. and Metromedia Fiber Network Services, Inc. (the "Asset Exchange Agreement") and associated IRU Agreement dated October 20, 2003 (the "IRU Agreement"), pursuant to which, inter alia, the Parties resolved various disputes related to a Joint Build Agreement dated February 15, 2000;
WHEREAS, since April 30, 2003, the Parties have performed under the terms of the Asset Exchange Agreement;
WHEREAS, MCI has asserted that MFN has breached certain of its obligations under the Asset Exchange Agreement with respect to the exchange of a fiber route located in Houston, TX-NASA (the "NASA Fiber Route");
WHEREAS, MFN disputes that it has failed to deliver the NASA Fiber Route;
WHEREAS, except with respect to the NASA Fiber Route, both Parties hereby acknowledge that neither party has asserted or is aware of any breach or default under the Asset Exchange Agreement;
WHEREAS, on October 31, 2003, this Court entered an order confirming the Debtors' Modified Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the "Plan");
Unless otherwise defined herein, capitalized terms shall have the meanings that are ascribed to such terms in the Plan.
WHEREAS, on April 20, 2004, the Plan became effective in accordance with its terms, and pursuant to the Plan, WorldCom, Inc. merged with and into MCI, Inc. with MCI, Inc. being the surviving entity;
WHEREAS, on or about October 15, 2004, MCI filed Reorganized Debtors' Objection to Proofs of Claim filed by Metromedia Fiber Network Services, Inc. (the "Claim Objection");
WHEREAS, the Debtors and Reorganized Debtors dispute owing the amounts asserted in the MFN Claims;
WHEREAS, the Parties are prepared to resolve all disputes and outstanding balances in connection with the MFN Claims and the NASA Fiber Route;
WHEREAS, in order to resolve the foregoing issues and disputes, the Parties have negotiated this Stipulation in good faith and at arms' length and, therefore, desire that it shall be binding upon each of them, their successors, heirs, and assigns; and
WHEREAS, the Parties believe this Stipulation is in their respective best interests.
In consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby stipulate and agree as follows:
STIPULATION
1. MFN shall have an Allowed Class 12 Intermedia General Unsecured Claim in the amount of $6,000,000 (the "Allowed MFN Claim").
2. Except as expressly provided herein, the MFN Claims will be, and hereby are, expunged and disallowed in their entirety.
3. MCI and MFN shall simultaneously execute an amendment to the Asset Exchange Agreement and the IRU Agreement pursuant to which MCI shall deliver an additional 22 fiber strands on the Chantilly, VA fiber route (the "Amendment to Asset Exchange Agreement" and "Amendment to IRU Agreement", respectively), the effectiveness of the Amendment to the Asset Exchange Agreement and the Amendment to IRU Agreement being subject to the effectiveness of this Stipulation.
4. MFN shall deliver, and MCI shall have accepted, the NASA Fiber Route within sixty (60) days from the date of execution of this Stipulation. In the event that MFN fails to deliver the NASA Fiber Route as provided herein, MCI may exercise any rights and remedies available under the Asset Exchange Agreement, provided that any claim for damages shall be limited to those damages accruing after the date of the execution of this Stipulation, any claim for damages accruing prior to the date of execution of this Stipulation being hereby waived and released.
5. This Stipulation shall become effective and binding on the Parties from the date of its execution, but is expressly subject to and contingent upon its approval by the Bankruptcy Court. In the event that this Stipulation is not approved by the Court, it shall be null and void and have no force or effect and the parties agree that, in such circumstances, this Stipulation shall be of no evidentiary value whatsoever in any proceedings.
6. Except as otherwise provided herein, MFN and its shareholders, owners, officers, directors, and employees hereby release and forever discharge MCI and all related persons, partnerships, corporations or other entities and their predecessors, successors, parents, subsidiaries, affiliates, assigns, transferees, agents, directors, officers, employees, shareholders and attorneys from and against all actions, causes of action, claims, suits, debts, damages, judgments, liabilities, and demands whatsoever, whether matured or unmatured, whether at law or in equity, whether now known or unknown that MFN now has or may have had, on behalf of itself or any other person or entity, with respect to any pre-petition or administrative claims against MCI in the MCI bankruptcy cases.
7. Except as otherwise provided herein, MCI and its shareholders, owners, officers, directors, and employees hereby release and forever discharge MFN and all related persons, partnerships, corporations or other entities and their predecessors, successors, parents, subsidiaries, affiliates, assigns, transferees, agents, directors, officers, employees, shareholders and attorneys from and against all actions, causes of action, claims, suits, debts, damages, judgments, liabilities, and demands whatsoever, whether matured or unmatured, whether at law or in equity, that MCI now has or may have had, with respect to the NASA Fiber Route, through the date of this Stipulation.
8. This Stipulation shall be governed, in all respects, by the laws of the State of New York, irrespective of its choice of law rules.
9. This Stipulation is the entire agreement between the Parties with respect to the subject matter of this Stipulation. All representations, warranties, inducements, and/or statements of intention made by the Parties are embodied in this Stipulation, and no party hereto relied upon, shall be bound by, or shall be liable for any alleged representation, warranty, inducement, or statement of intention that is not expressly set forth in this Stipulation.
10. This Stipulation may be executed in identical counterparts, each of which shall constitute an original and all of which shall constitute one and the same instrument.
11. This Stipulation may not be modified, except in a written instrument signed by each of the Parties hereto.
12. The Bankruptcy Court shall retain exclusive jurisdiction over any and all disputes arising out of or otherwise relating to the matter in this Stipulation.
IT IS SO ORDERED.