Opinion
Case No. 02-13533 (AJG), (Jointly Administered).
July 15, 2003.
Adam P. Strochak, Esq., Marcia L. Goldstein, Esq., Lori R. Fife, Esq., Alfredo R. Perez, Esq., Weil, Gotshal Manges LLP, Washington, DC, Attorneys for Debtors and Debtors In Possession.
Rosanne Thomas Matzat, Esq., Hahn Hessen, LLP, New York, NY, Attorneys for Staton Holdings, Inc.
STIPULATION AND ORDER RESOLVING MOTION OF STATON HOLDINGS, INC. FOR RELIEF FROM AUTOMATIC STAY TO PURSUE ADMINISTRATIVE RELIEF
WHEREAS, on July 21, 2002 and November 8, 2002, WorldCom, Inc. and substantially all of its direct and indirect domestic subsidiaries (the "Debtors") commenced cases under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"). The Debtors continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code;
WHEREAS, from September 1999 to September 2001, the Debtors provided long distance and other telecommunications services to Staton Holdings, Inc. ("Staton") under the MCI WorldCom On-Net Voice Agreement (the "MCI Agreement");
WHEREAS, on September 25, 1998, the Debtors agreed by counter-signing Staton's request letter dated April 21, 1998 (the "Letter Agreement") to extend services provided under the MCI Agreement to permit Staton's use of the toll-free vanity telephone number, 888-888-8888 (the "All Eights Number");
WHEREAS, in or about December 17, 2002, Staton filed a formal complaint with the Federal Communications Commission ("FCC") under FCC File No. EB-02-TC-F-003 (the "FCC Action"), alleging that the Debtors and Sprint willfully and without authorization disconnected, or were involved in the re-assignment of, the All Eights Number;
WHEREAS, the FCC Action was immediately stayed pursuant to 11 U.S.C. § 362(a) of the Bankruptcy Code by the commencement of these chapter 11 cases;
WHEREAS, on April 22, 2003, Staton filed its Motion for Relief from the Automatic Stay to Pursue Administrative Relief (the "Motion") seeking to proceed with the FCC Action in order to resolve its issues with the Debtors and reclaim such rights, if any, it may have to the All Eights Number.
Upon agreement of the parties to resolve the Motion, it is hereby stipulated, agreed, and ordered that
1. The Motion is granted pursuant to the terms of this stipulation.
2. The automatic stay arising in these chapter 11 cases, pursuant to section 362(a) of title 11, United States Code, is modified to permit Staton and WorldCom to continue and conclude the FCC Action solely with respect to a determination of liability and adjudication of claims for injunctive relief with respect to the disconnection and reassignment of the All Eights Number.
3. Except as provided in paragraph 5, below, if the Debtors are found to be liable for any claims asserted in the FCC Action, all further proceedings regarding determination and liquidation of damages shall take place in the Bankruptcy Court, absent further modification of the stay made after further motion by Staton or upon the Debtors' express written consent.
4. This stipulation is without prejudice to the right of Staton to seek, and the right of WorldCom to oppose, further relief from the stay in accordance with paragraph 3 above, seeking to permit adjudication of damages before the FCC.
5. In the event that the FCC determines that the Debtors are liable for negligent, and not willful, reassignment of the All Eights Number, then the parties hereby agree that Staton's claim for damages only shall be liquidated at the tariff cap amount of $1000, and shall be allowed in that amount and not subject to further appeal by either party.
6. The parties hereby stipulate and agree that all claims for relief in the FCC Action constitute prepetition general unsecured claims against the Debtors.
7. Except as specifically provided herein, the Debtors and Staton each reserve all rights and remedies under the Letter Agreement, MCI Agreement, the Bankruptcy Code, and any other applicable law.