Opinion
Case No. 02-13533 (AJG), (Jointly Administered).
July 28, 2003
Linda J. Casey, Pepper Hamilton LLP, Philadelphia, PA, Attorneys for IKON Office Solutions, Inc.
Marcia L. Goldstein, Esq., Lori R. Fife, Esq., Adam P. Strochak, Esq., Weil, Gotshal Manges LLP, New York, NY, Attorneys for Debtors and Debtors In Possession.
Alfredo R. Perez, Esq., Weil, Gotshal Manges LLP, Houston, TX, Attorneys for Debtors and Debtors In Possession.
STIPULATION AND ORDER
WorldCom, Inc. and certain of its affiliates ("Debtors"), as debtors-in-possession, and IKON Office Solutions, Inc. ("IKON") respectfully submit this Stipulation and Order ("Stipulation"):
RECITALS
WHEREAS, the Debtors filed voluntary petitions for relief under chapter 11 title 11 of the United States Code, with the United States Bankruptcy Court for the Southern District of New York ("Bankruptcy Court");
WHEREAS, the Debtors' chapter 11 cases have been procedurally consolidated, and the Debtors continue to manage their properties and operate their businesses as debtors in possession pursuant to Bankruptcy Code sections 1107(a) and 1008;
WHEREAS, on or about March 18, 2003 IKON filed its Motion of IKON Office Solutions, Inc. for Relief from the Automatic Stay Pursuant to 11 U.S.C. § 362(d)(1) and (2) ("IKON Setoff Motion") to setoff pre-petition amounts owed from and owing to IKON and the Debtors;
WHEREAS, MCI WORLDCOM Network Services, Inc. ("Network Services") alleges it owes IKON a prepetition debt of $269,754.11 for pre-petition goods and/or services provided to Network Services (the "Network Services Debt");
WHEREAS, Network Services alleges IKON owes Network Services a prepetition debt of $64,443.47 (the "IKON Debt");
WHEREAS, the Debtors and IKON 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 Debtors and IKON believe that this Stipulation is in their respective best interests.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Debtors and IKON hereto stipulate and agree as follows:
STIPULATION
1. Setoff. The Debtors agree to lift the automatic stay only to the extent necessary and solely to allow IKON to set off the Network Services Debt against the IKON Debt. After IKON sets off the mutual debts between IKON and Network Services, IKON's total remaining pre-petition claim against Network Services equals $202,310.64 ("Unsecured Claim").
2. Unsecured Claim. The Unsecured Claim shall be and is an allowed, prepetition, non-priority, unsecured claim. The Unsecured Claim is subject to and governed by the orders, procedures, laws, and rules applicable to the Debtors' Chapter 11 cases.
3. IKON's Pre-Petition Claim(s). IKON reserves its rights regarding the proofs of claim filed against other Debtors in this administratively consolidated bankruptcy proceeding. IOS Capital, Inc. ("IOS") reserves its rights regarding proofs of claims filed against any Debtor in this administratively consolidated bankruptcy proceeding. This Stipulation and Order finally resolves the pre-petition amounts owed to IKON and/or IOS for all claims unrelated to equipment leases.
4. Entire Agreement. This Stipulation is the entire agreement between the parties with respect to the subject matter of the Network Services Debt and/or the IKON Debt. All representations, warranties, inducements, and/or statements of intention made by the parties hereto 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.
5. Counterparts. This Stipulation may be executed in any number of counterparts, and all such counterparts, taken together, shall be deemed to constitute one and the same instrument.
6. Modifications. This Stipulation may not be modified, except in a written instrument signed by each of the parties hereto, which modification, if material in the discretion of the Debtors and IKON, shall be subject to the approval of the Bankruptcy Court. Should the parties hereto seek to modify this Stipulation, they shall provide notice to counsel for the Official Committee of Unsecured Creditors. To the extent the Official Committee of Unsecured Creditors objects to any such modification, the parties hereto shall seek Bankruptcy Court approval of such modification.
7. Authority. Both the Debtors and IKON represent that they are authorized to execute this Stipulation, subject to this Bankruptcy Court's approval.
8. Effective Date. This Stipulation shall be binding on the parties from the date of its execution, but is expressly subject to and contingent upon its approval by the Bankruptcy Court. If the Bankruptcy Court does not approve this Stipulation, this Stipulation shall be null and void.
9. Retention of Jurisdiction The Bankruptcy Court shall retain exclusive jurisdiction over any and all disputes arising out of or otherwise relating to this Stipulation, to the Network Services Debt, and/or the IKON Debt.
10. No Admissions. This Stipulation and Order shall be without any admission as to any of the alleged grounds asserted by WorldCom for disallowance of any part of IKON's claim.
11. Resolution of Motion and Objection. This Stipulation and Order finally resolve the IKON Setoff Motion and the Debtors' Ninth Omnibus Objection to Proofs of Claims, as it relates to pre-petition claims unrelated to claims arising from or related to equipment leases. Provided further that this Stipulation and Order do not resolve $4,258.06 in IKON's proof of claim that is the subject of the Debtors' Ninth Omnibus Objection to Proofs of Claims and which IKON alleges is a valid administrative claim that is the subject of a separate proof of claim. This Stipulation and Order, however, does not amount to the Debtors' concession or admission to amount or validity of this $4,258.06 administrative expense claim.
12. Preservation of Rejection Damages. This Stipulation and Order shall not prevent IKON from asserting additional pre-petition claims arising out of the rejection of any executory contract, aside from the contract(s) at issue in the IKON Setoff Motion, or equipment leases.
13. Preservation of Administrative Claims. This Stipulation and Order shall not be deemed to disallow or ratify any administrative claims asserted by IKON or IOS, nor shall it prevent IKON or IOS from asserting administrative claims, including, without limitation, those asserted in the Consolidated Motion of IOS Capital, Inc. et al., for (I) Allowance and Payment of Administrative Claims and (1) an Order Compelling the Debtors to Pay Lease Obligations as Required by 11 U.S.C. § 365(d)(10).
So ordered.