Case No. 04-08130-TOM-11 (Jointly Administered).United States Bankruptcy Court, N.D. Alabama, Southern Division.
January 9, 2006
Robert W. Tapscott, Jr., Esq., Attorneys for the Reorganized Debtor.
Dawn R. Copley, Esq., Attorneys for DaimlerChrysler.
CONSENT ORDER
TAMARA MITCHELL, Bankruptcy Judge
This matter is before the Court on the Motion of the post-confirmation Citation Corporation (the “Reorganized Debtor”) to Enforce the Confirmed Plan of Reorganization and for Declaratory Judgment against DaimlerChrysler Corporation (“DaimlerChrysler”) (DOC # 2338) (the “Motion”). By agreement of the parties, this Motion has been resolved and the Court hereby incorporates the terms of the parties’ agreement and orders as follows:
A. On September 18, 2004 (the “Petition Date”), Citation Corporation, its holding company, and certain of its direct and indirect subsidiaries[1] (collectively, the “Debtors”) filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of Alabama (Southern Division) (the “Court”), said bankruptcy case being styled In Re: Citation Corporation, et al., Chapter 11 Case No. 04-08130-TOM-11 (the “Bankruptcy Case”).
B. The bar date for filing claims was established by the Court as January 7, 2005.
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DaimlerChrysler did not file a claim in the Bankruptcy Case.
C. On March 10, 2005, DaimlerChrysler issued Debit Memo 3799 (“Debit Memo 3799”) to the Debtors for costs allegedly incurred in connection with defective bearing caps manufactured and delivered by Citation to DaimlerChrysler before the Petition Date.
D. On May 18, 2005, the Court issued an Order Confirming the Debtors’ Third Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Confirmation Order”).
E. On September 30, 2005, the Reorganized Debtor filed with the Court the Motion, pursuant to which the Reorganized Debtor asserted that, among other things, DaimlerChrysler’s use of pre-Petition Date claims in Debit Memo 3799 to reduce its post-Petition Date obligations to the Reorganized Debtor violated the automatic stay provisions of the Bankruptcy Code, the post-discharge injunction provided in the Confirmation Order, Article V of the Confirmed Third Amended Joint Plan of Reorganization (the “Confirmed Plan”) and Section 1141(d) of the Bankruptcy Code.
F. The parties desire to settle the Motion in its entirety pursuant to Section 4.6 of the Confirmed Plan and to release one another from all past, present and future claims that have, or could have been, brought in connection with the Motion.
G. The parties have determined that it is in their mutual best interests to avoid further costly and protracted litigation, and the parties have determined to settle and fully and finally resolve all of the disputes between them on the terms and conditions set forth in this Consent Order.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that by Agreement of the
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parties:
1. DaimlerChrysler shall cause to be paid to the Reorganized Debtor the amount of Eighty-Two Thousand Dollars ($82,000) in immediately available funds (the “Settlement Payment”). The Settlement Payment shall be made no later than ten (10) business days after entry by the Court of this Consent Order.
2. Upon the entry of the Consent Order, DaimlerChrysler shall immediately cancel and/or rescind Debit Memo 3799 such that no further debits, setoffs and/or recoupments will be taken by DaimlerChrysler against accounts payable by DaimlerChrysler to the Reorganized Debtor on account of Debit Memo 3799 or on account of any deliveries of defective or allegedly defective goods to DaimlerChrysler prior to May 18, 2005. DaimlerChrysler agrees that to the extent that any debits, setoff or recoupments that have been taken by DaimlerChrysler on account of Debit Memo 3799 exceed the aggregate amount of $199,396.14, DaimlerChrysler shall immediately cause a credit to be issued to the Reorganized Debtor’s account for such excess amount.
3. The Debtor and DaimlerChrysler shall each bear their own costs and fees in connection with their agreement.
4. Except for the obligations under this Consent Order, the Reorganized Debtor (for itself and, pursuant to Section 4.6 of the Confirmed Plan, for the Debtors) releases DaimlerChrysler, its subsidiaries, affiliates, successors and assigns, and their respective counsel, from any and all claims, rights, demands or causes of action of any kind or nature, known or unknown, relating to the claims made under the Motion and any and all claims that have been asserted, or could have been asserted relating to allegations in the Motion that DaimlerChrysler violated the terms of the Confirmed Plan and/or the Confirmation Order that was entered in the
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Bankruptcy Case.
5. The parties to this Consent Order agree that this Consent Order contains the complete agreement between them with respect to the settlement of the Motion, and that there are no contemporaneous oral or written agreements or representations between the parties other than those incorporated in this Consent Agreement. No term of this Consent Order may be waived, amended or modified except in a writing properly executed by an authorized representative of each of the parties.
6. Each party hereto acknowledges, represents, and warrants that it is duly authorized to execute this Consent Order, and those persons executing this Consent Order warrant that they have the power and authority to execute the Consent Order.
7. This Consent Order may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
8. This Consent Order is being entered into solely as a settlement of claims pursuant to Section 4.6 of the Confirmed Plan and does not represent an admission by any of the parties of any liability with respect to claims asserted or which could have been asserted in the Motion.
9. The rights and interests of the parties under this Consent Order are intended to benefit solely the parties to this Consent Order and their respective subsidiaries, affiliates, successors and assigns, and/or their counsel.
10. This Court shall have and retain jurisdiction to enforce the settlement and the terms of this Consent Order.
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