Case No. 02-43582-H4-11 Jointly Administered.United States Bankruptcy Court, S.D. Texas, Houston Division.
September 14, 2004
Marcy E. Kurtz, BRACEWELL PATTERSON, L.L.P. Houston, Texas, Counsel to the Debtors’ Disbursing Agent.
Daniel J. Garfield, BROWNSTEIN HYATT FARBER, P.C. Denver, Colorado, Counsel to the Claimants.
STIPULATION, RELEASE OF CLAIMS AND AGREED ORDER ON THE DISBURSING AGENT’S SECOND OMNIBUS OBJECTION TO CONTINGENT PROOFS OF CLAIM (DOCKET NO. 3996) WITH REGARD TO PRATT MANAGEMENT CO., LLC
ROBERT McGUIRE, Chief Judge, Bankruptcy
Encompass Services Corporation and its subsidiaries (the “Debtors”) and Pratt Management Co., LLC and its affiliates (collectively, the “Claimants” and together with the Debtors, the “Parties”) stipulate and agree 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 28, 2003, this Court entered an order confirming the Immaterially Modified Second Amended Joint 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 “Effective Date”), the Plan became effective.
3. WHEREAS, as of the Effective Date, and pursuant to Article 5.3 of the Plan, the Debtors assert that 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 of the Debtors is deemed filed against the consolidated Debtors and is deemed one Claim against, and obligations of, the consolidated Debtors.
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4. WHEREAS, on April 15, 2003, the Claimants filed proof of claim number 3367 in Bankruptcy Case No. 02-43582 (the “Proof of Claim”) alleging an unsecured claim in the amount of $926,291.00.
5. WHEREAS, on February 25, 2004, the Disbursing Agent filed his Second Omnibus Objection to Contingent Proofs of Claim (Docket No. 3996) (the “Objection”) objecting to the Proof of Claim.
6. WHEREAS, on April 7, 2004, the Claimants filed their Response to the Objection (Docket No. 4385).
NOW THEREFORE, THE PARTIES HERETO STIPULATE AND AGREE ASFOLLOWS:
1. That, in full and final settlement of the disputes and claims existing among the Parties hereto, the Claimants will be permitted, without objection by the Debtors, to amend the Proof of Claim (the “Amended Proof of Claim”) to allege a general unsecured claim totaling $1,300,671.00 (including Pratt’s claim that it continues to incur attorney fees, costs, and other charges to remedy the Debtors’ alleged design flaws); however, the Debtors take no position regarding, and neither admit nor deny, any liability for the dispute underlying the Proof of Claim and Amended Proof of Claim.
2. That the Amended Proof of Claim will be allowed against the Debtors’ estate, but will be capped at $250,000.00 for purposes of distribution from the Debtors’ estate.
3. That the Debtors, to the best of their ability and as set forth in the Letter Agreement, attached hereto as Exhibit A, shall use reasonable efforts to assist the Claimants in any action brought pursuant to any of the Debtors’ applicable insurance policies to collect payment for the remaining portion of the Amended Proof of Claim over and above the $250,000 cap.
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4. That the Claimants and the Debtors, for themselves and on behalf of each of the respective affiliates, hereby RELEASE, ACQUIT, and FOREVER DISCHARGE each other from any and all claims, including all claims filed against the Debtors in the bankruptcy case, demands, and causes of action of any nature whatsoever, whether arising under any contract or in tort, which in any way related to any of the acts, events, dealings or transactions, and agree that this Stipulation releases any and all claims, demands, and causes of action of any nature whatsoever that they may have, whether or not asserted at the time of the execution of this Stipulation, for any injuries or damages of any kind whatsoever, whether known or unknown that occurred as a result of or are in any way related to any course of dealings between the Claimants, the Debtors or any of their respective affiliates, or any of the acts, events, dealings, or transactions. The release provided in this paragraph 4 shall not apply, however, to the Parties’ rights and obligations under this Stipulation, to any third party not a Debtor in the above-captioned bankruptcy case, or to Claimants’ ability to pursue payment for the remaining portion of the Amended Proof of Claim over and above the $250,000 cap from the Debtors’ applicable insurance policies, including additional claims for attorney fees and other costs associated with the Amended Proof of Claim. Each Party hereto further acknowledges and agrees that it may hereafter discover claims or facts in addition to or different from those now known or believe to be true with respect to the matters described and released herein. Nevertheless, it is each Party’s intention fully, finally, and forever to release each other from all claims relative to such matters, which now exist or which may exist in the future, other than as stated in this paragraph 4. In furtherance of such intention, this Stipulation shall remain in effect as a full and complete release of all such claims, other than as stated in this paragraph 4.
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5. Each Party hereto covenants and agrees not to bring, file, charge, claim, sue, cause, assist, or permit to be brought, filed, charged or claimed any action, cause of action, or proceeding based upon any of the claims released under this Stipulation, and further covenants and agrees that this Stipulation is, will constitute and may be pleaded as, a bar to any such claim, action, cause of action or proceeding, other than as provided in paragraph 4 of this Stipulation.
6. Each Party hereto represents and warrants:
a. Such Party has all requisite power and authority to enter into this Stipulation. The execution, delivery, and performance of this Stipulation has been duly and validly authorized by all necessary action on the part of such Party, including without limitation obtaining all necessary consents or waivers. This Stipulation constitutes a valid and binding obligation of such party, enforceable in accordance with its terms.
b. The execution, delivery, and performance of this Stipulation will not conflict with or result in a breach of any of the terms, conditions or provisions of any agreement or instrument to which such Party is a party or by which it is bound.
7. That this Stipulation constitutes the entire understanding of the Parties with respect to the subject matter hereof and may not be modified or amended except by a writing executed by or on behalf of the Parties.
8. That, except as provided herein, the Claimants do not have any surviving claim against the Debtors in these bankruptcy cases.
9. That the Debtors expressly reserve the right to object to any Claim not subject to this Stipulation.
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IT IS HEREBY ORDERED that the Stipulation is approved.
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September 13, 2004
Daniel J. Garfield Brownstein Hyatt Farber 410 Seventeenth Street, 22nd Floor Denver, Colorado 80202-4437
Re: Stipulation, Release of Claims And Agreed Order on the Disbursing Agent’s Second Omnibus Objection to Contingent Proofs of Claim (Docket No. 3996) With Regard to Pratt Management Co., LLC (the “Stipulation”) entered in In re Encompass Services Corp., et al. (the “Debtors”), Bankruptcy Case No. 02-43582
Dear Dan:
This letter agreement (the “Letter Agreement”) evidences an agreement by and between Todd Matherne, the duly-appointed disbursing agent in the above-captioned bankruptcy case (the “Disbursing Agent”), and Pratt Management Co., LLC (“Pratt”), with regard to the following:
1. Pratt shall have the right to access the Debtors’ books, records, documents and communications in the Debtors’ possession, for so long as any such shall exist, to pursue compensation, pursuant to any of the Debtors’ applicable insurance policies, for Pratt’s claim relating to remediation of Encompass’ design and alleged construction flaws at the Maxtor Corporate Campus Project in Longmont, Colorado (the “Building”), for defects associated with the HVAC system in the Building.
2. The Disbursing Agent and Pratt hereby agree that the Disbursing Agent’s agreement to use reasonable efforts to assist Pratt to the best of the Disbursing Agent’s ability in any action brought pursuant to any of the Debtors’ applicable insurance policies shall terminate on December 31, 2004, at 11:59 p.m. (Central), or when the above-referenced bankruptcy case is closed, whichever occurs first.
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Dan Garfield September 13, 2004
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Please evidence Pratt’s agreement to the terms set forth herein by signing this Letter Agreement in the space provided below and returning an executed copy to my attention at your earliest convenience.
Very truly yours,
Bracewell Patterson, L.L.P.
Marcy E. Kurtz
Agreed to and Acknowledged by:
Daniel J. Garfield Brownstein Hyatt Farber 410 Seventeenth Street, 22nd Floor Denver, Colorado 80202-4437 Tel: (303) 223-1147 Fax: (303) 223-0947
Counsel for Pratt Management Co., LLC