CASE NO. 02-43582-H4-11, Jointly AdministeredUnited States Bankruptcy Court, S.D. Texas.
December 18, 2003
Marcy E. Kurtz, BRACEWELL PATTERSON, L.L.P., Houston, Texas, Counsel to the Debtors’ Disbursing Agent
Jack C. O’Donnell, GRAY BECKER, P.C., Austin, TX, Counsel to the Osbornes
STIPULATION AND AGREED ORDER REGARDING THE DISBURSING AGENT’S SECOND OMNIBUS OBJECTION TO INSURANCE-FUNDED PROOFS OF CLAIM (DOCKET #3291) WITH REGARD TO PHILLIP DEBORAH QSBORNE’S PROOF OF CLAIM NO. 2393
WILLIAM GREENDYKE, Bankruptcy Judge
Encompass Services Corporation and its subsidiaries (the “Debtors”) and Phillip and Deborah Osborne (the “Osbornes” and together with the Debtors, the “Parties”) stipulate as follows:
1. WHEREAS, on November 19, 2002, the Debtors filed their voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code.
2. WHEREAS, on May 21, 2003, this Court entered an order confirming the Immaterially Modified Second Amended Join Plan of Reorganization of Encompass Services Corporation and its Affiliated Debtors Under Chapter 11 of the Bankruptcy Code and supplemented by the Plan Supplement, the First Amended Plan Supplement, and the Second Amended Plan Supplement (collectively, the “Plan”). On June 9, 2003, the Plan became effective.
3. WHEREAS, as of the Effective Date, and pursuant to Article 5.3 of the Plan, each of Debtor’s assets and liabilities were merged with and pooled with the assets and liabilities of each of the other Debtors, and each and every Claim filed or to be filed in the Chapter 11 case of any
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of the Debtors is deemed lied against the consolidated Debtors and is deemed one Claim against, and obligations of, the consolidated Debtors.
4. WHEREAS, on April 8, 2003, the Osbornes filed proof of claim number 2393 in Bankruptcy Case No. 02-43621 (the “Proof of Claim”). The Proof of Claim alleges an unsecured non-priority claim in the amount of $5,400,000.
5. WHEREAS, on or about November 24, 2003, the Disbursing Agent filed his Second Omnibus Objection to Insurance-Funded Proofs of Claim (Docket #3291) (the “Objection”) objecting, inter alia, to the Proof of Claim because the Disbursing Agent believes it is covered by one of the Debtors’ insurance policies.
6. WHERAS, the Disbursing Agent believes that the Osbornes’ claim, if determined to be otherwise valid, is fully funded by the Debtors’ insurance policies.
NOW THEREFORE, THE PARTIES HERETO STIPULATE AS FOLLOWS:
1. Subject to paragraph 4 below, that the Osbornes’ claim is initially disallowed for purposes of distribution from the Debtors’ estate;
2. That the Osbornes may pursue compensation for their claim pursuant to any of the Debtors’ applicable insurance policies;
3. That this Stipulation is neither an admission nor denial of liability on the underlying obligation of the Osbornes’ claim;
4. That the Qsbornes5 claim for distribution from the Debtors’ estate is automatically reasserted if the Osbornes’ claim is denied coverage under the Debtors’ applicable policies and the Osbornes1 notify the Court of such within twenty (20) days of notification of the denial of coverage; “denial of coverage” means (1) the Debtors’ insurance policies do not cover the act and/or omission found by a Court or jury to have been committed by the Debtors, or (2) although
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covered, there is no money left in the applicable insurance policies; provided, however, that a denial of payment due to failure to establish liability against the Debtor Airtron, Inc. does not constitute a denial of coverage;
5. That the Osbornes do not have any other claims in the Debtors’ bankruptcy cases;
6. That the Debtors expressly reserve the right to object to any Claim not subject to this Stipulation.
IT IS HEREBY ORDERED that the Stipulation is approved.
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