Case No. 02-43582-H4-11, JOINTLY ADMINISTEREDUnited States Bankruptcy Court, S.D. Texas, Houston Division.
April 22, 2003
ORDER APPROVING BREAK-UP FEE AND EXPENSE REIMBURSEMENT PROVISIONS RELATED TO THE PROPOSED SALE OF THE DEBTORS’ RESIDENTIAL SERVICES GROUP [This instrument pertains to Docket # 1972]
WILLIAM R. GREENDYKE, United States Bankruptcy Judge.
Upon consideration of the Expedited Motion for an Order Approving Break-Up Fee and Expense Reimbursement Provisions Related to the Proposed Sale of the Debtors’ Residential Services Group (the “Motion”), filed by Encompass Services Corporation and certain of its direct and indirect subsidiaries, as debtors and debtors in possession (collectively, the “Debtors”) seeking an order approving Break-Up Fee[1] and Expense Reimbursement provisions, as more fully set forth in the Motion; and all objections to the Motion having been overruled on the conditions set forth on the record at the hearing on April 9, 2003 (the “Record”); and it appearing that this Court has jurisdiction to consider this matter; and it appearing that the relief requested in the Motion is in the best interests of the Debtors and their estates; and it appearing that due notice of this Motion has been given and that no other or further notice need be given and sufficient cause appearing therefor,
IT IS HEREBY FOUND AND DETERMINED THAT:
A. The findings and conclusions set forth herein and on the Record constitute the Court’s findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052, as made applicable to these proceedings pursuant to Federal Rule of Bankruptcy Procedure 9014. To the extent that any finding of fact shall later be determined to be a conclusion of law, it shall be so deemed and vice versa.
B. The Court has jurisdiction over the subject matter of the Motion pursuant to 28 U.S.C. § 1334 (b). This matter is a core proceeding pursuant to 28 U.S.C. § 157 (b)(2)(A).
C. Venue in this Court is proper under 28 U.S.C. § 1408 and 1409.
D. In the Motion, the Debtors moved this Court for the entry of an order approving Break-Up Fee and Expense Reimbursement provisions related to the Proposed Sale of the Debtors’ Residential Services Group.
E. Attached to the Motion as Exhibit A is a Letter of Intent relating to the proposed sale of the Debtors’ Residential Services Group to the Buyer for gross cash consideration in the amount of $40,000,000 (the “Proposed Sale”). In addition, attached to the Motion as Exhibit B is the Due Diligence Agreement which further describes the proposed terms of the Break-Up Fee and the Expense Reimbursement which the Debtors propose to pay to the Buyer.
BASED ON THE FOREGOING, IT IS THEREFORE
ORDERED that the Motion of the Debtors is hereby granted on the terms and conditions set forth on the Record; that this Order constitutes a Final Order within the meaning of 28 U.S.C. § 158 (a); and that the provisions of this Order are non-severable and mutually dependent; and it is further
ORDERED that the Due Diligence Agreement, including without limitation, the Break-Up Fee and Expense Reimbursement provisions set forth therein (a copy of which is attached to the Motion as Exhibit B), is hereby approved as modified on the Record, which modifications include the requirement that the Acquisition Agreement, prior to execution, be in a form and substance acceptable to the Debtors, Buyer, and Committee, unless otherwise ordered by the Court; and it is further
ORDERED that any Expense Reimbursement and/or Beak-Up Fee awarded to the Buyer pursuant to the terms of the Due Diligence Agreement and this Order be accorded administrative expense priority pursuant to sections 503(b)(1)(A) and 507(a)(1) of the Bankruptcy Code, provided, however,
that this allowance of administrative expense priority is without prejudice to the right of any party to seek a surcharge against the assets of the Residential Debtors or any proceeds thereof in an amount equal to any Expense Reimbursement and/or Break-Up Fee paid to Buyer pursuant to this Order or to otherwise request that such amounts be paid from any sale proceeds; and it is further
ORDERED that this Court shall retain jurisdiction over any matters or disputes related to or arising from the implementation of this Order, including, but not limited to, the right to amend this Order.