Case No. 02-43582-H4-11, JOINTLY ADMINISTEREDUnited States Bankruptcy Court, S.D. Texas, Houston Division.
June 4, 2003
STIPULATION AND ORDER
WILLIAM GREENDYKE, Bankruptcy Judge.
[This document pertains to docket number 2396.]
TO THE HONORABLE WILLIAM R. GREENDYKE, UNITED STATES BANKRUPTCY JUDGE:
Encompass Services Corporation and certain of its direct and indirect subsidiaries, as debtors and debtors-in-possession, and Thrifty Payless, Inc. d/b/a Rite Aid (“Rite Aid”), Peggy Ross (“Ross”), and Clean Pro, Inc. (“Clean Pro”) respectfully submit this Stipulation and Order (“Stipulation”):
RECITALS
WHEREAS, Ross filed the action styled Peggy Ross v. Thrifty Payless, Inc. d/b/a Rite Aid, United Service Solutions, Inc., Building One Service Solutions, Inc. and Clean Pro, Inc., Case Number A43 1992, in the District Court in Clark County, Nevada (the “Nevada Action”), against inter alia, the debtor, Building One Service Solutions, Inc. (“BuildingOne”) for a claim for personal injuries allegedly sustained on or about April 7, 1999;
WHEREAS, Rite Aid filed in the Nevada Action its cross-claim style Thrifty Payless, Inc. d/b/a Rite Aid v. Building One Solutions, Inc. and Clean Pro, Inc.;
WHEREAS, on November 19, 2002 (“Petition Date”), Encompass Services Corporation and substantially all of its domestic direct and indirect subsidiaries (collectively, “Encompass” or “the Debtors”), 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, Building One has asserted in the Nevada Action that it has no liability to Peggy Ross or Rite Aid;
WHEREAS, Building One filed a Notice of Bankruptcy in the Nevada Action stating that such action was stayed pursuant to section 362 of the Bankruptcy Code;
WHEREAS, on or about May 13, 2003 Rite Aid filed its motion moving the Bankruptcy Court to modify the automatic stay to allow it to proceed with its claim against Building One (the “Rite Aid Motion”);
WHEREAS, Ross and Clean Pro joined in the Rite Aid Motion to move the Bankruptcy Court to modify the automatic stay and requested they be afforded the same relief to allow them to proceed in litigating the Nevada Action;
WHEREAS, Building One has available coverage under one or more policies of insurance for the benefit of claims asserted against Building One, such as those asserted in the Nevada Action;
WHEREAS, Building One, Rite Aid, Ross, and Clean Pro wish to resolve the issues raised by the Rite Aid Motion without the cost and expense of further litigation;
WHEREAS, Building One, Rite Aid, Ross, and Clean Pro 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, Building One, Rite Aid, Ross, and Clean Pro 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 Rite Aid, Ross, and Clean Pro to:
a. pursue their claims and causes of action against Building One to conclusion in the Nevada Action to the extent one or more applicable insurance policies provide for Building One’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 Building One for the matters set forth in the Nevada Action, provided, however, that to the extent Building One is responsible for satisfying any amount in excess of one or more of its policies of insurance that provide coverage with respect to the Nevada Action, Rite Aid, Ross, and Clean Pro affirmatively waive the right, if any, to collect that excess amount.
2. This Stipulation applies only to claims and causes of action of Rite Aid, Peggy Ross and Clean Pro against Building One 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 Nevada Action. This Stipulation does not foreclose the Rite Aid, Ross, and/or Clean Pro’s right or ability to recover future damages for causes of action that arose after the Petition Date.
3. Building One, Rite Aid, Ross, and Clean Pro 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 Rite Aid, Ross, and Clean Pro shall be able/required to proceed with the Rite Aid Motion, seeking relief from the automatic stay at a later hearing and allowing Building One an opportunity to answer such Motion. Rite Aid, Ross, and Clean Pro waive 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 Rite Aid 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 any of the parties alone, Building One, Rite Aid, Ross, or Clean Pro, shall be subject to the approval of this Bankruptcy Court.
8. Counsels for Building One, Rite Aid, Ross, and Clean Pro represent that they are authorized to execute this Stipulation, subject to this Bankruptcy Court’s approval.
So ordered.