Opinion
Case No. 02-13533 (AJG), (Jointly Administered)
August 7, 2003
Marcia L. Goldstein, Esq. (MG 2606), Lori R. Fife, Esq. (LF 2839), Alfredo R. Perez, Esq., WEIL, GOTSHAL MANGES LLP, 767 Fifth Avenue, New York, N.Y. 10153-0119, Attorneys for the Debtors and Debtors in Possession.
Kent Yalowitz, 399 Park Avenue, New York, N.Y. 10022-4690, Brian P. Leitch, Timothy Macdonald, Andrew Meyers, ARNOLD PORTER, 370 17th Street, Suite 4500, Denver, CO 80202, Attorneys for Motorola, Inc.
STIPULATION AND AGREED ORDER REGARDING MOTOROLA, INC.'S MOTION FOR TEMPORARY ALLOWANCE OF CLAIM FOR VOTING PURPOSES PURSUANT TO BANKRUPTCY RULE 3018
This Stipulation and Order (the "Stipulation") is made as of this 4th day of August, 2003, by and between WorldCom, Inc. ("WorldCom") and certain of its direct and indirect subsidiaries, as debtors and debtors in possession (collectively, the "Debtors") and Motorola, Inc. ("Motorola") by their respective undersigned counsel. Pursuant to this Stipulation, the Debtors and Motorola hereby agree and stipulate as follows:
RECITALS
WHEREAS, on July 21, 2002 and continuing thereafter (the "Commencement Date"), 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. By order dated July 22, 2002 and subsequent orders, the Debtors' chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered.
WHEREAS, on or about January 23, 2003, Motorola filed Proofs of Claim numbers 22242, 22207, 22208, 22241, 28990, 29365, 29255, 29256, 29257 and 29259 (the "Claims") against various Debtors in the above referenced Bankruptcy Cases. In these Claims, Motorola asserts, among other things, a secured claim in excess of $27 million. As a basis for the Claims, Motorola alleges that, on or about April 1, 2001, it entered into a Unified Wireless Products Supply Agreement (the "Agreement") with WorldCom Wireless, Inc. ("Wireless"), one of the Debtors herein. The Claims further assert that this Agreement granted Motorola a security interest in, and a lien on, Wireless' inventory, accounts, chattel paper, instruments, contract rights, general intangibles, accounts receivable, as well as any proceeds therefrom. In connection with this alleged security interest, Motorola alleges that it filed a UCC-1 with the Arizona Secretary of State, on or about June 14, 2002.
WHEREAS, on or about March 11, 2003, Motorola filed a related adversary proceeding, Cause No. 03-02169 (the "Lawsuit"), that is currently pending before this Court. Motorola filed the Lawsuit against WorldCom, Inc., Wireless, Skytel Corp., Skytel Communications, Inc., MCI WorldCom Communications, Inc., MCI WorldCom Network Services, Inc., MCI Communications Corp., and WorldCom Purchasing, LLC (collectively, the "WorldCom Defendants"). The WorldCom Defendants are the same entities against whom the Claims have been filed.
WHEREAS, on or about April 14, 2003, the WorldCom Defendants filed their Answer and Counterclaim in the Lawsuit (the "Counterclaim").
WHEREAS, on July 8, 2003, the Debtors filed an objection to the Claims asserting (i) that the Claims should be characterized as unsecured claims because the alleged security interest is subject to avoidance by operation of 11 U.S.C. § 547; and (ii) that the Claims are for amounts for which the Debtors dispute they owe. Consequently, the Debtors requested that the Claims be disallowed for voting purposes.
WHEREAS, Motorola is listed on Schedule F of the Debtors' Schedules as holding an unsecured, non-priority claim in the amount of $20,479,812 (the "Scheduled Claim").
WHEREAS, on April 24, 2003, the Debtors filed their Motion for entry of an Order (I) Approving the Debtors' Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code, dated May 23, 2003 (as the same has been or may be amended, the "Disclosure Statement"); (II) Fixing a Record Date; (III) Approving Solicitation Packages and Procedures for Distribution Thereof; (IV) Approving Forms of Ballots and Establishing Procedures for Voting on the Debtors' Joint Plan of Reorganization; and (V) Scheduling a Hearing and Establishing Notice and Objection Procedures in Respect of Confirmation of the Debtors' Joint Plan of Reorganization (the "Disclosure Statement Motion").
WHEREAS, on May 28, 2003, the Bankruptcy Court for the Southern District of New York (the "Court") entered an Order granting the Disclosure Statement Motion.
WHEREAS, on July 3, 2003, the Debtors filed their Motion for entry of an Order Approving Supplement to the Debtors' Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code, dated July 3, 2003 (the "Supplement Motion").
WHEREAS, on July 10, 2003, the Court entered an Order granting the Supplement Motion.
WHEREAS, pursuant to the Court's Orders, dated May 28, 2003 and dated July 10, 2003, the Debtors are soliciting acceptances to the Debtors' Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated July 9, 2003 (the "Plan").
WHEREAS, Motorola filed its Motion for Temporary Allowance of Claim for Voting Purposes on July 22, 2003 (Docket No. 7575), in which it requested that it be allowed to vote an unsecured claim in the amount of the Scheduled Claim.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged, the parties hereto stipulate and agree as follows:
1. Motorola's Claim No. 22208 is temporarily allowed in the amount of $20,479,812.00, as provided for by Federal Rule of Bankruptcy Procedure 3018, for the limited purpose of voting on the Debtors' Plan by Class 6 Ballot for Voting WorldCom General Unsecured Claims.
2. Nothing in this Stipulation is intended to, nor shall it be construed to be, an allowance of such claims for any purpose other than voting, or a waiver by any of the Debtors or any other parties in interest of any right to object on any grounds to any claims or proofs of claim filed or to be filed by Motorola.
3. Nothing in this Stipulation is intended to be, nor shall it be construed to be, a waiver of any of the arguments contained in Motorola's Objection to Plan Confirmation filed July 28, 2003, or any arguments that Motorola may raise at the confirmation hearing.
4. The parties reserve all rights with respect to the Lawsuit.
5. Motorola agrees to withdraw its Motion for Temporary Allowance of Claim for Voting Purposes filed on July 22, 2003.
IT IS SO ORDERED.