Case No. 03-15299 (PSH), (Jointly Administered).United States Bankruptcy Court, N.D. Illinois, Eastern Division.
March 31, 2005
John Wm. Butler, Jr., George N. Panagakis, Ron E. Meisler, SKADDEN, ARPS, SLATE, MEAGHER FLOM LLP, Chicago, Illinois. Attorney for the Reorganized Debtor.
Jeffrey S. Endick, Malcolm C. Slee, SLEVIN HART, P.C., Washington, DC., and Thomas J. Angell, JACOBS, BURNS, ORLOVE, STANTON HERNANDEZ, Chicago, Illinois. Attorneys for United Food and Commercial Workers International Union-Industry Pension Fund.
STIPULATION AND AGREED ORDER BETWEEN EAGLE FOOD CENTERS, INC. AND UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION-INDUSTRY PENSION FUND IN CONNECTION WITH THE RESOLUTION OF ALL REMAINING CLAIMS [EOD # 1398]
PAMELA S. HOLLIS, Bankruptcy Judge
United Food and Commercial Workers International Union-Industry Pension Fund (the “National Fund”), by and through its attorneys, Slevin Hart, P.C. and Jacobs, Burns, Orlove, Stanton
Hernandez and Eagle Food Centers, Inc. (“Eagle Foods,” or in reference to itself, the “Reorganized Debtor” and together with the National Fund, the “Parties”), by and through its attorneys, Skadden, Arps, Slate, Meagher Flom LLP, hereby stipulate, as follows:
RECITALS
WHEREAS, on April 7, 2003 (the “Petition Date”), Eagle Foods and four of its affiliates (the “Affiliate Debtors” and together with Eagle Foods, the “Debtors”) filed voluntary petitions for chapter 11 protection with the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division (the “Bankruptcy Court”) pursuant to 11 U.S.C. §§ 101–1330 (as amended, the “Bankruptcy Code”);
WHEREAS, in connection with that certain Order Pursuant to 11 U.S.C. §§ 105(a), 501, 502, and 1111(a) and Rules 2002(a)(7), 3003(c)(3) and 5005(a) of the Federal Rules of Bankruptcy Procedure Establishing Bar Dates for Filing Proofs of Claim and Approving Form and Manner of Notice Thereof (Docket No. 319), the Bankruptcy Court approved the establishment of 4:00 p.m. (Prevailing Eastern Time) on September 8, 2003 as the
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last date and time to file certain claims, including, without limitation, general unsecured claims, against the Debtors (the “General Bar Date”);
WHEREAS, on January 29, 2004, the Debtors filed the First Amended Joint Plan of Liquidation of Eagle Food Centers, Inc. and Its Affiliated Debtors and Debtors in Possession (Docket No. 862) (the “First Amended Plan”) and on March 25, 2004 (the “Confirmation Date”), the Bankruptcy Court entered its Findings of Fact, Conclusions of Law, and Order under 11 U.S.C. §§ 1129(a) and (b) and Fed.R.Bankr.P. 3020 Confirming the First Amended Plan (Docket No. 974) (the “Confirmation Order” and the First Amended Plan, as modified by the Confirmation Order, the “Plan”), and after satisfying certain conditions precedent, the Plan became effective on April 8, 2004;
WHEREAS, the National Fund is a multiemployer employee pension benefit plan within the meaning of sections 3(2) and (37) and 4001(a)(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), which is funded in part by contributions remitted by various employers pursuant to collective bargaining agreements between employers and local unions affiliated with the United Food and Commercial Workers International Union;
WHEREAS, pursuant to certain of its collective bargaining agreements, Eagle Foods was a participating employer in the National Fund;
WHEREAS, by October 31, 2003, Eagle Foods permanently closed all facilities employing employees covered by the National Fund and effective October 31, 2003 the related collective bargaining agreements were terminated and accordingly, Eagle Foods effected a complete withdrawal from the National Fund within the meaning of section 4203(a) of ERISA;
WHEREAS, on or about September 8, 2003, the Debtors’ claims agent, Logan Company, Inc. (“Logan”) received Proof of Claim numbered 1388 filed by the National Fund asserting claims against the Debtors in unliquidated amounts on account of an arbitration award determining outstanding contributions owed to the National Fund (the “Arbitration Award”) and a contingent claim for anticipated withdrawal liability related to Eagle Foods’ participation in the National Fund (“Claim No. 1388”);
WHEREAS, the National Fund subsequently amended Claim No. 1388 with Proof of Claim numbered 1794, which was received by Logan on February 25, 2004, which asserted (a) a priority claim under 11 U.S.C. § 507(a)(4) in the amount of $1,150.00 and a general unsecured claim in the amount of $19,180.00 both on account of the Arbitration Award
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and (b) a general unsecured claim in the estimated amount of $1,190,000.00 on account of withdrawal liability (“Claim No. 1794”);
WHEREAS, the National Fund subsequently amended Claim No. 1794 with Proof of Claim numbered 1819, which was received by Logan on April 7, 2004, which asserted a claim amount on account of withdrawal liability of $2,350,560.00 and asserted the same claim as provided in Claim No. 1794 on account of the Arbitration Award (“Claim No. 1819”);
WHEREAS, on April 27, 2004, the Reorganized Debtor filed that certain Third Omnibus Objection to Claims Under 11 U.S.C. §§ 102(1), 105(a), and 502(b) and Fed.R.Bankr.P. 3007
(Docket No. 1000) pursuant to which the Reorganized Debtor moved to disallow Claim No. 1388 and Claim No. 1794 on the grounds that both claims were superseded by Claim No. 1819, and on May 27, 2004, the Bankruptcy Court granted the relief requested and entered an order disallowing Claim No. 1388 and Claim No. 1794;
WHEREAS, on March 11, 2004, the National Fund filed a Motion for Payment of Administrative Expenses (Docket No. 943) and on May 14, 2004, the National Fund filed a Supplement to Motion for Payment of Administrative Expenses (Docket No. 1030), pursuant to which the National Fund asserted a portion of its withdrawal liability as an administrative claim against the Debtors in the amount of $265,613.28 (the “Administrative Claim”);
WHEREAS, on December 30, 2004, the Reorganized Debtor’s Ninth Omnibus Objection to Claims under 11 U.S.C. §§ 102(1), 105(a), and 502(b) and Fed.R.Bankr.P. 3007 (Docket No. 1317) (the “Objection”) was filed with the Bankruptcy Court, which included, among other claims, Claim No. 1819 and the Administrative Claim; and
WHEREAS, pursuant to negotiations between the National Fund and the Reorganized Debtor, the parties wish to enter into the following agreement to settle all claims asserted by the National Fund against the Reorganized Debtor and the Debtors.
NOW, THEREFORE, the National Fund and the Reorganized Debtor agree and the Bankruptcy Court hereby orders as follows:
1. Claim No. 1819 and the Administrative Claim (collectively, the “National Fund Claims”) are the sole claims the National Fund holds against the Reorganized Debtor and the Debtors in these chapter 11 cases.
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2. The National Fund Claims shall be reduced, reclassified and allowed as follows (the “Allowed Claims”) in full satisfaction of any and all claims the National Fund may have against the Debtors, the Reorganized Debtor and their estates:
(a) Claim No. 1819 shall be reduced and allowed as follows:
(i) on account of the Arbitration Award, $1,150.00 shall be allowed as a priority claim under 11 U.S.C. § 507(a)(4), which shall be treated pursuant to section 5.1(b) of the Plan and $10,000.00 shall be allowed as a general unsecured claim, which shall be treated pursuant to section 5.2(a) of the Plan; and
(ii) on account of withdrawal liability, $1,122,422.96 shall be allowed as a general unsecured claim, which shall be treated pursuant to section 5.2(a) of the Plan.
(b) The Administrative Claim shall be reduced and allowed in the aggregate amount of $52,857.04 and shall be treated pursuant to section 2.1 of the Plan;
3. Upon the entry of this Stipulation and Agreed Order, the Objection, as it relates to the National Fund Claims only, shall be withdrawn.
4. The National Fund may seek satisfaction of the Allowed Claims against the Debtors and Eagle Foods only as set forth herein, and except as provided in paragraph 6 below, in no event shall the Reorganized Debtor, the Debtors or their estates be liable in any other way whatsoever with respect to the Allowed Claims.
5. Logan Company, Inc. is directed to amend the Debtors’ claims register to reflect the terms of this Stipulation and Agreed Order.
6. This Stipulation and Agreed Order shall not affect the National Fund’s rights to any residual value remaining in Talon Insurance Company, Inc. (“Talon”), the Debtors’ wholly owned captive insurance company, as memorialized in that certain Settlement Agreement by and between the Pension Benefit Guaranty Corporation, Central States Southeast Southwest Areas Pension Fund, Indiana Area United Food and Commercial Workers Unions and Retail Food Employers Joint Pension Plan. United Food and Commercial Workers.
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International Union-Industry Pension Fund, Talon Insurance Company, Inc. and Eagle Food Centers, Inc. in Connection with the Sharing of Residual Value Resulting from the Wind Down of Talon Insurance Company, Inc. (the “Settlement Agreement”).
7. The National Fund warrants that it has not assigned, hypothecated or otherwise transferred any alleged claim or cause of action against the Debtors or Reorganized Debtor to any other person or entity. To the extent that any claim may be brought against the Debtors or the Reorganized Debtor by persons or entities claiming by, through or under the National Fund on the basis that the National Fund has assigned, hypothecated or otherwise transferred any alleged claim or cause of action against the Debtors or Reorganized Debtor to such person or entity, the National Fund agrees to indemnify and hold the Debtors and the Reorganized Debtor harmless from any damages, liabilities, obligations, costs or expenses (including reasonable attorneys’ fees) or reasonable settlement payments to the extent relating to, arising out of, or resulting from the National Fund’s breach of the foregoing warranty, if any.
8. The National Fund, on its behalf and on behalf of any of its respective successors, assigns, affiliates and any other party claiming through any of them (the “National Fund Releasors”), for good and sufficient consideration, the receipt of which is hereby acknowledged, hereby absolutely and forever, releases and discharges the Reorganized Debtor, the Debtors, the Debtors’ estate, and any of their respective former or current representatives, administrators, officers, directors, employees, advisors, attorneys and agents (collectively “Eagle Release”) from any and all actions, claims, counterclaims, suits, charges, demands, debts, liabilities, damages, judgments, extents, executions, accounts, sums of money, rights of setoff and recoupment, reckonings, obligations, controversies, losses and causes of action of every kind and nature whatsoever, whether or not known or suspected at this time, which the National Fund Releasors, or any of them have, ever had, owned or held or hereafter shall or may have against the Eagle Releases or any of them, based upon or arising out of any event, occurrence, act or omission existing from the beginning of time through the date of the execution of this Stipulation and Agreed Order; provided,however, that nothing herein shall constitute a release or discharge of any obligations under this Stipulation and Agreed Order or the Settlement Agreement.
9. The Bankruptcy Court shall retain jurisdiction and shall be the selected venue to hear, address and adjudicate any disputes arising under this Stipulation and Agreed Order.
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