Case No. 02-12059 (Jointly Administered).United States Bankruptcy Court, N.D. Illinois, Eastern Division.
April 14, 2005
SAUL EWING LLP, Mark Minuti, Donald J. Deweller, Wilmington, DE, Co-counsel to the Post-Confirmation Committee of Unsecured Creditors.
JPMorgan Trust Company, National Association (successor in interest to Bank One, NA), Kevin M. Ryan, Chicago, IL.
STIPULATION AND AGREED ORDER RESOLVING ALL CLAIMS OF BANK ONE, N.A.
CAROL DOYLE, Bankruptcy Judge
WHEREAS, on July 30, 2001, HA-LO Industries, Inc., and its affiliated debtors (collectively the “Debtors”) filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. §§ 101–1330; and
WHEREAS, Bank One, NA (formerly known as American National Bank and Trust Company of Chicago and predecessor in interest to JPMorgan Trust Company, National Association) (“Bank One”), provided certain escrow agent services under eight escrow agreements between American National Bank, as escrow agent, HA-LO Industries, Inc., as escrowee, and certain third parties as escrowers, respectively (the “Escrow Agreements”), pursuant to which certain common and preferred stock of HA-LO Industries was held in escrow; and
WHEREAS, specifically, the Escrow Agreements consist of (i) that certain Pledge and Escrow Agreement, made and entered as of December 1, 1998, by and among the Irving and Linda Rubenstein Family Revocable Trust Dated June 13, 1988, HA-LO Industries, Inc. (“HA-LO”), and American National Bank and Trust Company of Chicago (“ANB”) (originally designated as Account No. 40844003, now No. 10214944); (ii) that certain Employment Escrow Agreement, made and entered as of May 3, 2000, by and among Coventry Partners Family Limited Partnership, HA-LO, and ANB (Account No. 44386001); (iii) that certain Employment Escrow Agreement, made and entered as of May 3, 2000, by and among Bloomfield Partners Family Limited
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Partnership, HA-LO, and ANB (Account No. 44387009); (iv) that certain Indemnification Escrow Agreement, made and entered as of May 3, 2000, by and among Coventry Partners Family Limited Partnership, HA-LO, and ANB (originally Account No. 44388007, now No. 10215105); (v) that certain Indemnification Escrow Agreement, made and entered as of May 3, 2000, by and among Bloomfield Partners Family Limited Partnership, HA-LO, and ANB (originally Account No. 44389005, now No. 10215106); (vi) that certain Indemnification Escrow Agreement, made and entered as of May 3, 2000, by and among Chase Venture Capital Associates, L.P., HA-LO, and ANB (originally Account No. 44390003, now Account No. 10215107); (vii) that certain Indemnification Escrow Agreement, made and entered as of May 3, 2000, by and among Zebra Investments, L.P., HA-LO, and ANB (originally Account No. 44391001, now No. 10215108); and (viii) that certain Indemnification Escrow Agreement, made and entered as of May 3, 2000, by and among Carramore Limited, HA-LO, and ANB (originally Account No. 44392009, now No. 10215109);
WHEREAS, as part of its Schedules and Statements of Financial Affairs, the Debtors scheduled two potential unsecured claims on behalf of Bank One: (i) Scheduled Claim Number 30343, in the amount of $24,500; and (ii) Scheduled Claim Number 30344 in the amount of $27,952.84; and
WHEREAS, Bank One never filed proofs of claim in the Debtors’ cases and maintains that it never received any notices of any claims bar date or plan confirmation proceedings; and
WHEREAS, on or about July 29, 2003, a preference action styled The Official Committee of Unsecured Creditors of HA2003, formerly known as HA-LO Industries, Inc., et al v. Bank One,
Adv. No. 03 A 02408, was filed in this Court against Bank One (the “Action”); and
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WHEREAS, on January 28, 2004, this Court entered an order confirming (the “Confirmation Order”) the Second Amended Plan of Reorganization (Liquidating) Of HA2003, Inc. f/k/a HA-LO Industries, Inc., LW2003, Inc. f/k/a Lee Wayne Corporation And Starbelly.com, Inc. As Proposed By The Debtors And Debtors-In-Possession And The Official Committee Of Unsecured Creditors Dated As Of October 30, 2003 (the “Plan”); and
WHEREAS, the Plan went effective February 10, 2004 (the “Effective Date”); and
WHEREAS, pursuant to the Plan, the Post-Confirmation Committee of Unsecured Creditors of HA2003, Inc., Formerly Known as HA-LO Industries, Inc., et al. (the “PCC”) was established and is responsible for managing and winding up the affairs of the Debtors, liquidating the assets of the Debtors, and pursuing all claims and causes of action on behalf of the Debtors, all in furtherance of the Plan and for the sole benefit of the PCC claimants; and
WHEREAS, pursuant to the terms of the Plan and the Confirmation Order, the Escrow Agreements were rejected pursuant to sections 365 and 1123 of the Bankruptcy Code as of the Effective Date; and
WHEREAS, pursuant to the terms of the Plan and the Confirmation Order, all of the common and preferred stock of HA-LO was cancelled and extinguished as of the Effective Date; and
WHEREAS, after reviewing the Debtors’ books and records the PCC objected to Scheduled Claims 30343 and 30344 pursuant to the Thirteenth Omnibus Objection of the Post-Confirmation Committee of Unsecured Creditors of HA2003, Inc., Formerly Known as HA-LO Industries, Inc., et al., to Claims (the “Objection”) [Docket No. 4993]; and
WHEREAS, Bank One has informally responded to the Action and the Objection; and
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WHEREAS, the Debtors and Bank One have been engaged in ongoing settlement discussions to resolve the Action, the Objection, Scheduled Claims 30343 and 30344, and certain other unfiled claims asserted by Bank One against the Debtor’s estates; and
WHEREAS, the PCC and Bank One (the “Parties”) have agreed to resolve the Action, the Objection, Scheduled Claims 30343 and 30344, and any and all other claims that the parties may have or hold against each other related to the Escrow Agreements, the Action, the Objection, or Scheduled Claims 30343 and 30344, whether known or unknown and whether asserted or not in the Debtors’ cases:
IT IS HEREBY STIPULATED AND AGREED that:
1. Scheduled Claim Number 30343 is hereby finally allowed as a general unsecured claim in the amount of $24,500.
2. Scheduled Claim Number 30344 is hereby finally allowed as a general unsecured claim in the amount of $27,952.84.
3. By this Stipulation and Agreed Order the Parties and their respective affiliates mutually release and forever discharge any and all claims, whether known or unknown, and whether filed in these cases or not, that arise out of or relate in any way to any one or more of the Escrow Agreements, the Action, the Objection, and Scheduled Claims 30343 and 30344; provided, however, that Bank One’s release shall not extend to or affect its rights as the holder of Scheduled Claims 30343 and 30344. For the avoidance of doubt, the foregoing mutual releases shall not include any claims of the Debtors and Bank One for breach or enforcement of this Stipulation or otherwise arising out of it.
4. The Debtors shall reasonably promptly dismiss with prejudice the Action, Adv. No. 03 A 02408 pending in the United States Bankruptcy Court for the Northern District of Illinois.
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5. By virtue of the rejection of the Escrow Agreements and the cancellation and extinguishment of the common and preferred stock of HA-LO, Bank One has been excused from further performance and all of its other obligations under the Escrow Agreements. Bank One shall dispose of such stock of HA-LO in its possession as escrow agent under the Escrow Agreements by releasing and delivering it to the undersigned co-counsel for the PCC by means of first class U.S. mail, postage prepaid, or prepaid overnight delivery.
6. The signatories to this Stipulation represent that they have the authority to bind the Parties on whose behalf they are signing.
7. This Court shall retain jurisdiction over any matters related to or arising from the Objection or the implementation of this Stipulation and Agreed Order.
8. This Order fully and finally resolves any and all claims of Bank One against the Debtors’ estates, whether entitled to secured, priority, administrative or unsecured status, that relate to the Escrow Agreements, the Action, the Objection, or Scheduled Claims 30343 and 30344.
9. Debtors’ Objection to the claims of Bank One is hereby withdrawn.
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SO ORDERED.