Case No. 02-43582-H4-11, JOINTLY ADMINISTEREDUnited States Bankruptcy Court, S.D. Texas, Houston Division
February 26, 2003
Robert G. Miller, O’Donnell, Ferebee McGonigal, Houston, Texas, attorney for Michael Hammes.
Alfredo R. Pérez, Lydia T. Protopapas and Shayne H. Newell, Houston, Texas, attorneys for Debtors and Debtors in possession.
STIPULATION AND ORDER [This document pertains to matter number 1249.]
WILLIAM R. GREENDYKE, United States Bankruptcy Judge.
Encompass Services Corporation and certain of its direct and indirect subsidiaries, as debtors and debtors-in-possession (collectively, “Encompass”), and Michael Hammes (“Hammes”) respectfully submit this Stipulation and Order (“Stipulation”):
RECITALS
WHEREAS, Hammes filed the action styled Michael Hammes v. Thermex/Thermatron, Inc. et al., File Number 62-C3-01-006918, in the 2d Judicial District Court of Ramsey County, Minnesota (“MinnesotaAction”), against, inter alia, the debtor, Gilbert Mechanical Contractor, Inc. (“Gilbert Mechanical”) for a claim for personal injuries allegedly sustained on or about August 11, 1999;
WHEREAS, on November 19, 2002 (“Petition Date”), Encompass Services Corporation and substantially all of its domestic direct and indirect subsidiaries (collectively, the “Debtors”), including Gilbert Mechanical, filed voluntary petitions for relief under chapter 11 title 11 of the United States Code (“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;
WHEREAS, Gilbert Mechanical has asserted in the Minnesota Action that it has no liability to Hammes;
WHEREAS, Gilbert Mechanical filed a Notice of Bankruptcy in the Minnesota Action stating that such action was stayed pursuant to section 362 of the Bankruptcy Code;
WHEREAS, on or about February 13, 2003, Hammes moved the Bankruptcy Court to modify the automatic stay to proceed with his claims against Gilbert Mechanical (“Hammes Motion”)
WHEREAS, Gilbert Mechanical has available coverage under one or more policies of insurance for the benefit of claims asserted against Gilbert Mechanical, such as those asserted in the Minnesota Action;
WHEREAS, Gilbert Mechanical and Hammes wish to resolve the issues raised by the Hammes Motion without the cost and expense of further litigation;
WHEREAS, Gilbert Mechanical and Hammes 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, Gilbert Mechanical and Hammes believe that this Stipulation is in their respective best interests.
in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto stipulate and agree as follows:
STIPULATION
1. Subject to the provisions herein, the automatic stay should be lifted solely to the extent necessary to permit Hammes to:
a. pursue his claims and causes of action against Gilbert Mechanical to conclusion in the Minnesota Action to the extent one or more applicable insurance policies provide for Gilbert Mechanical’s defense; and
b. proceed, if successful, with collection efforts on any judgment obtained, or settlement reached, only as against insurance policies that provide coverage to Gilbert Mechanical for the matters set forth in the Minnesota Action, provided, however, that to the extent Gilbert Mechanical is responsible for satisfying any amount in excess of one or more of its policies of insurance that provide coverage with respect to the Minnesota Action. Hammes affirmatively waives the right, if any, to collect that excess amount.
2. This Stipulation applies only to claims and causes of action of Hammes against Gilbert Mechanical that arose prior to the Petition Date or that are otherwise subject to the automatic stay and that have been or are assertable in the Minnesota Action. This Stipulation does not foreclose Hammes’s right or ability to recover future damages for causes of action that arose before the Petition Date.
3. Gilbert Mechanical and Hammes agree and state that they have read the entire Stipulation and know and understand its contents, and that they have had the opportunity to consult, and have consulted with, their attorneys retained to represent them in this matter, on terms and implications of this Stipulation and that they have executed this Stipulation under their own free will and action.
4. In the event the Court declines to enter this Stipulation for any reason, the agreements contained herein shall be deemed null and void and of no force or effect and Beers shall be able/required to proceed with the Hammes Motion, seeking relief from the automatic stay at a later hearing and allow Gilbert Mechanical an opportunity to answer such Motion. Hammes waives any and all rights to an automatic termination of the stay under Bankruptcy Code section 362(e) pending such later hearing.
5. This Stipulation is the entire agreement between the parties with respect to the subject matter of the Hammes Motion.
6. 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.
7. 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 Gilbert Mechanical and Hammes, shall be subject to the approval of this Bankruptcy Court.
8. Counsel for both Gilbert Mechanical and Hammes represent that they are authorized to execute this Stipulation, subject to this Bankruptcy Court’s approval.
So ordered