Opinion
Case No. 02-13533 (AJG), (Jointly Administered).
February 14, 2003
ORDER PURSUANT TO BANKRUPTCY RULE 9019 APPROVING THE SETTLEMENT AGREEMENT WITH WALLACE COMPUTER SERVICES, INC.
Upon the motion, dated January 17, 2003 (the "Motion"), of WorldCom, Inc. and certain of its direct and indirect subsidiaries, as debtors and debtors in possession (collectively, "WorldCom"), for an order, pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), approving a settlement (the "Settlement") between WorldCom and Wallace Computer Services, Inc. ("Wallace"), as more fully set forth in the Motion; and the Court having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. § 157 and 1334; and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. § 157(b); and venue being proper before this Court pursuant to 28 U.S.C. § 1408 and 1409; and due and proper notice of the Motion having been provided, and it appearing that no other or further notice need be provided; and the relief requested in the Motion being in the best interests of WorldCom and its estates and creditors; and the Court having reviewed the Motion and having heard the statements in support of the relief requested therein at a hearing before the Court (the "Hearing"); and the Court having determined that the legal and factual bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before the Court and after due deliberation and sufficient cause appearing therefore, it is
ORDERED that the Motion is granted; and it is further
ORDERED that the Settlement, a copy of which is annexed as Exhibit A to the Motion, is approved pursuant to Bankruptcy Rule 9019; and it is further
ORDERED that the Settlement was entered into following good faith, arm's-length negotiations between WorldCom and Wallace and the compromise and settlement reflected in the Settlement is in the best interests of WorldCom, its creditors and all other parties in interest; and it is further
ORDERED that Wallace shall not receive or take any setoff against the Debtors, as requested in Wallace's motion for relief from stay; and it is further
ORDERED that Wallace shall pay MCI WORLDCOM Communications, Inc. $303,642.95 within 10 days of the entry of this Order. Wallace shall also pay all postpetition amounts due and owing to WorldCom, or which become due and owing in the future, in accordance with the terms of the governing agreements and applicable invoices, subject to any right of setoff Wallace may have and ordinary course account disputes; and it is further
ORDERED that Wallace is hereby granted an allowed, pre-petition, nonpriority, unsecured claim in the amount of $410,397.24. This claim shall be allowed in the MCI WORLDCOM Network Services, Inc. bankruptcy (Case No. 02-42229), without limitation to Wallace's right to file and seek allowance of such claim in certain of the other jointly administered cases; and it is further
ORDERED that Wallace is hereby granted an administrative expense claim ("Administrative Expense Claim") pursuant to 11 U.S.C. § 503(a) in the amount of $250,000 on its reclamation complaint and Wallace may deduct the Administrative Expense Claim from Wallace's Prepetition Debt (as defined in the Motion). Wallace shall have no further relief on its reclamation complaint in adversary proceeding no. 02-03105. In the event Wallace deducts the Administrative Expense Claim from Wallace's Prepetition Debt, Wallace shall not be entitled to any payment from WorldCom on the Administrative Expense Claim. The bankruptcy estate in which the Administrative Expense Claim will be allowed shall be determined by subsequent order of the Bankruptcy Court, as necessary; and it is further
ORDERED that the "MCI Billing Contract" between Wallace Computer Services, Inc. and WorldCom Purchasing, LLC (the "Billing Contract") shall be amended and extended through December 31, 2003, and shall be assumed by WorldCom Purchasing, LLC, as amended by an amendment to be executed by the parties consistent with the terms of the Settlement. The cure payment for this assumption shall total $250,000 (the "Cure Payment"). Wallace shall recognize the Cure Payment by deducting it from Wallace's Prepetition Debt. WorldCom shall not otherwise be obligated to make a payment to Wallace as a result of the assumption of the Billing Contract; and it is further
ORDERED that WorldCom and Wallace are authorized and directed to execute, deliver, implement, and fully perform any and all obligations, instruments, documents and papers and to take any and all actions reasonably necessary or appropriate to consummate and fully execute the Settlement; and it is further
ORDERED that the requirement under Rule 9013-1(b) of the Local Bankruptcy Rules for the Southern District of New York for the filing of a memorandum of law is waived.