Case No. 01-16034 (AJG), Jointly Administered.United States Bankruptcy Court, S.D. New York.
November 29, 2005
ORDER, PURSUANT TO SECTION 105 OF THE BANKRUPTCY CODE AND FEDERAL RULES OF BANKRUPTCY PROCEDURE 2002, 6004, AND 9019, AUTHORIZING AND APPROVING (A) THE PERFORMANCE OF SETTLEMENT AGREEMENT WITH THE CIBC PARTIES WITH RESPECT TO MEGACLAIM LITIGATION, THE MEGACLAIM OBJECTION, THE CIBC CLAIMS, THE ASCC LITIGATION AND THE TRANSFEREE SUIT AS SET FORTH THEREIN, AND (B) THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY
ARTHUR GONZALEZ, Bankruptcy Judge
Upon consideration of the motion, dated October 31, 2005 (the “Motion”),[1] of Enron Corp. (“ENE”), Enron North America Corp. (“ENA”), Enron Natural Gas Marketing Corp. (“ENGMC”), Enron Broadband Services, Inc. (“EBS”), Enron Energy Services, Inc. (“EES”), EES Service Holdings, Inc. (“EESH”), Enron International Inc. (“EII”), Enron Energy Services Operations, Inc. (“ESO”), ECT Merchant Investments Corp. (“ECT”), Enron Power Marketing, Inc. (“EPMI”), Atlantic Commercial Finance, Inc. (“ACFI”) and Enron Capital Trade Resources International Corp. (“ECTRIC”), as reorganized debtors (collectively, the “Reorganized Debtor Movants”), for an order, pursuant to section 105 of the Bankruptcy Code and Bankruptcy Rules 2002, 6004, and 9019, authorizing and approving: (a) the performance of the Settlement Agreement, dated as of October 31, 2005 (the “Settlement Agreement”), by and among the Reorganized Debtor Movants and Canadian Imperial Bank of Commerce (“CIBC”), CIBC World
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Markets Corp. (“CIBC World”), CIBC Capital Corporation, CIBC World Markets PLC (“CIBC Markets”), and CIBC, Inc., and (b) the consummation of the transactions contemplated thereby; and the Bankruptcy Court having jurisdiction to consider the Motion and the relief requested therein, pursuant to 28 U.S.C. §§ 157 and 1334 and Article XXXVIII of the Plan; and it appearing that due and proper notice of the Motion and the relief requested therein having been given, and no other or further notice need be given; and all parties in interest having been heard or having been afforded an opportunity to be heard at the hearing held on November 29, 2005 to consider the Motion and the relief requested therein (the “Hearing”); and the relief requested in the Motion being in the best interests of the Reorganized Debtor Movants and the other Debtors and Reorganized Debtors, their respective estates and creditors; and the Bankruptcy Court having determined that the legal and factual bases set forth in the Motion establish just cause for the relief granted herein and that the terms and provisions contained in the Settlement Agreement are fair and reasonable; and based upon the Motion, the exhibits thereto, the evidence adduced and the legal arguments presented at the Hearing and all other proceedings had before the Bankruptcy Court; and after due deliberation thereon and good and sufficient cause appearing therefor,
IT IS HEREBY FOUND AND DETERMINED THAT:
A. The Bankruptcy Court has jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. §§ 157 and 1334 and Article XXXVIII of the Plan. Venue of the Debtors’ chapter 11 cases and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409.
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B. As evidenced by the certificate of service filed with the Bankruptcy Court, proper, timely, adequate and sufficient notice of the Motion and the transactions contemplated thereby, and the Hearing to consider the Motion and the relief requested therein, has been provided to all interested persons and parties in accordance with the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules for the Southern District of New York (the “Local Rules”), and this Court’s Second Amended Case Management Order Establishing, Among Other Things, Noticing Electronic Procedures, Hearing Dates, Independent Website and Alternative Methods of Participation at Hearings, dated December 17, 2002, and such notice was good, sufficient and appropriate under the particular circumstances and no other or further notice of the Motion, this Order, or the Hearing is required.
C. Pursuant to the MegaClaim Complaint, the Plaintiffs have brought claims (1) against the Financial Institution Defendants (as defined in the MegaClaim Complaint), including, but not limited to, the CIBC Entities, for damages based upon, among other claims and causes of action, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, and civil conspiracy; (2) against various of the Financial Institution Defendants, including, but not limited to, the CIBC Entities, and other entities, for (a) disallowance and/or equitable subordination of their respective claims against the Plaintiffs, and (b) recovery of certain payments or other deliveries and commitments made to the Financial Institution Defendants by the Plaintiffs and assertedly constituting avoidable transfers, and (3) for an accounting, punitive damages, interest and costs.
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D. In addition to the MegaClaim Litigation, on November 14, 2003, ENE and ENA commenced an adversary proceeding, style Enron Corp. and Enron North America Corporation v. Asset Securitization Corp., Adversary Proceeding No. 03-93210, currently pending in the Bankruptcy Court, seeking the recovery of alleged preferential and fraudulent transfers in the aggregate amount of $5,075,715.03 (the “ASCC Litigation”).
E. In addition to the MegaClaim Litigation and the ASCC Litigation, on January 10, 2005, ENE commenced an adversary proceeding, styled Enron Corp. v. Rushmore Capital-I LLC and Rushmore Capital-II LLC, Adversary Proceeding No. 05-01024 (AJG), currently pending in the Bankruptcy Court (the “Transferee Suit”), seeking equitable subordination of claims against ENE transferred by the CIBC Entities to Rushmore Capital-I, L.L.C. and Rushmore Capital-II, L.L.C. (collectively, “Rushmore Capital”), subsequent to the Petition Date.
F. The CIBC Entities have contested, and continue to vigorously contest, that (1) any grounds exist for their liability to the Enron Entities, whether in the MegaClaim Litigation or by disallowance of their claims under the MegaClaim Objection or the Plan and (2) validly transferred claims may be subordinated in the hands of the transferee.
G. The CIBC Entities have denied and continue to deny each and all of the claims and allegations of wrongdoing made by the Enron Entities in the MegaClaim Litigation and the ASCC Litigation and steadfastly maintain that they have meritorious defenses and counterclaims thereto. The CIBC Entities have denied and continue to deny
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all charges of wrongdoing or liability against them arising out of any of the conduct, statements, acts or omissions alleged or that could have been alleged, in the MegaClaim Litigation or the ASCC Litigation. The CIBC Entities have denied and continue to deny the allegations that the Enron Entities, the Debtors or their estates were harmed by any CIBC Entity’s conduct alleged in the MegaClaim Litigation or otherwise.
H. Over a period of several months, principals of the Plaintiffs and the CIBC Parties held several meetings and telephone conversations to address whether a settlement of the MegaClaim Litigation, the MegaClaim Objection, the CIBC Claims, the ASCC Litigation, and the Transferee Suit might be possible and, if so, on what terms and conditions. Those discussions, which included participation by senior executives of both the Plaintiffs and the CIBC Parties, intensified in August 2005 and eventually resulted in the Settlement Agreement.
I. The negotiations were conducted at arms’ length, over an extended period, between very sophisticated parties that were in an adversarial relationship throughout their dealings with each other. All the terms of the settlement are set out in the Settlement Agreement presented to the Court. There are no side agreements or additional consideration of any kind apart from what is included in the Settlement Agreement. In particular, there is no evidence or indication from the terms of the Settlement Agreement that it represents or includes any effort by Plaintiffs to secure, or by the CIBC Entities to assist Plaintiffs in securing, unfair or inequitable treatment of others against whom Plaintiffs or the other Enron Entities have asserted or may assert claims. The Settlement Agreement does not establish or seek to preserve for the CIBC Entities a right of
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contribution or indemnity, in whole or in part, as to any Non-Settling Defendants or others who are themselves precluded by the terms of the settlement from bringing like claims against the CIBC Entities.
J. As a further result of such negotiations, the Debtors reasonably determined that the settlement could not be achieved unless the CIBC Entities were protected from the risk of post-settlement exposure to Non-Settling Defendants and others for contribution and indemnity, predicated upon actions taken by, through, on behalf of or for the benefit of any Enron Releasees. The provision of the Settlement Agreement affording that protection constitutes an essential term of the Settlement Agreement without which the compromise and settlement could not have been achieved. Neither the Debtors nor any other Person is harmed or disadvantaged by this provision in the context of the other terms of the Settlement Agreement.
K. The Enron Entities have determined that it is desirable and beneficial to them and their beneficiaries that the MegaClaim Litigation and MegaClaim Objection insofar as they relate to the CIBC Entities, as well as the ASCC Litigation and the Transferee Suit, be settled in the manner and upon the terms and conditions set forth in the Settlement Agreement.
L. The Reorganized Debtors and the Debtors have advanced sound and sufficient business justifications, and it is a reasonable exercise of their respective business judgment, to execute, deliver and consummate the Settlement Agreement and the transactions contemplated thereby.
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M. The consummation of the Settlement Agreement and the settlement contemplated thereby, is properly authorized under all applicable provisions of the Bankruptcy Code, including, without limitation, section 105 of the Bankruptcy Code, and all applicable Bankruptcy Rules, including, without limitation, Bankruptcy Rules 2002, 6004, and 9019, as well as Local Rule 9013-1(c), and all of the applicable provisions of such sections have been complied with in respect thereof.
N. Subject to the entry of this Order, the Reorganized Debtor Movants, directly or indirectly, have the power and the authority to bind each other Debtor, Reorganized Debtor and Enron Entity to the terms of the Settlement Agreement or otherwise have been duly authorized by such Debtor, Reorganized Debtor and other Enron Entity to execute and deliver the Settlement Agreement on its behalf.
O. The consideration set forth the Settlement Agreement constitutes reasonably equivalent value and fair consideration pursuant to the Bankruptcy Code and applicable state law.
P. The Settlement Agreement was proposed, negotiated, and entered into by the parties thereto without collusion and in good faith.
Q. Except as otherwise provided in this Order, no consents or approvals, other than this Order and those expressly provided for in the Settlement Agreement, are required for the parties to consummate the transactions contemplated by the Settlement Agreement. Without limiting the generality of the foregoing, upon entry of this Order, no further action, approval or consent of any person shall be required to enter into, deliver, perform, and comply with the Settlement Agreement.
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THEREFORE, IT IS HEREBY ORDERED THAT:
1. The findings of fact and the conclusions of law stated herein shall constitute the Bankruptcy Court’s findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014. To the extent any finding of fact shall later be determined to be a conclusion of law, it shall be so deemed, and to the extent any conclusion of law shall later be determined to be a finding of fact, it shall be so deemed.
2. The Motion is granted in its entirety.
3. All objections, including, without limitation, any objections interposed at the Hearing, to the Motion or the relief requested therein that have not been withdrawn, waived or settled, and all reservations of rights included therein, are overruled.
4. The Settlement Agreement and the transactions contemplated thereby are approved in their entirety pursuant to section 105 of the Bankruptcy Code and Bankruptcy Rules 2002, 6004, and 9019, and Local Rule 9013-1(c).
5. The Reorganized Debtor Movants are authorized and directed for themselves and on behalf of each other Debtor, Reorganized Debtor and Enron Entity, pursuant to section 105 of the Bankruptcy Code and Bankruptcy Rule 9019, to execute and deliver the Settlement Agreement and each of the Debtors, Reorganized Debtors and other Enron Entities are authorized and directed to perform all of their obligations with respect thereto, and to execute and deliver, or cause their respective subsidiaries and affiliates to execute and deliver, such Settlement Agreement, and perform all of their obligations with
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respect thereto and take such other actions as are necessary to effectuate the transactions contemplated thereby.
6. On the Closing Date, CIBC shall pay to ENE, by wire transfer of immediately available funds, Two Hundred Fifty Million Dollars ($250,000,000.00) in exchange for the full and final satisfaction of the claims and causes of action asserted against the CIBC Entities in the MegaClaim Litigation, the ASCC Litigation and of any and all other claims, causes of action and other disputes, including, but not limited to, Derivative Claims, the Enron Entities hold or may hold against any of the CIBC Entities and for the granting of the releases provided in the Settlement Agreement and to be provided in this Order.
7. On the Closing Date, (a) CIBC or CIBC, Inc., as appropriate, shall pay to ENE, by wire transfer of immediately available funds, an amount equal to thirty percent (30%) of the claim amount set forth in the chart in Section 2.2 of the Settlement Agreement and (b) in consideration therefor, such CIBC Claims shall be deemed to be Allowed Claims against those Debtors and in the amounts set forth in the chart in Section 2.2 of the Settlement Agreement and with respect to the classes identified in such chart pursuant to the Plan (the “CIBC Allowed Claims”);provided, however, that no distributions shall be made with respect to the portion of Claim No. 14196 until the current holder of such Claim complies with the requirements of Section 4(b) of that certain Amended and Restated Stipulation and Order Resolving Reorganized Debtors’ Objection and Request for Alternate Forms of Relief with Respect to Claims Based Upon the 364-Day
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Revolving Credit Agreement, Including, Without Limitation, Reclassification of Claims as General Unsecured Claims, dated August 9, 2005, Docket No. 26960.
8. On the Closing Date, all CIBC Claims, other than those referred to in Sections 2.2, 2.4, 2.5 and, to the extent not elected to be allowed, 2.6 of the Settlement Agreement, shall be deemed subordinated in accordance with the terms and provisions of section 510 of the Bankruptcy Code, and, to effectuate such subordination, all Plan distributions with respect to such CIBC Claims shall be deemed assigned to ENE or, to the extent the Litigation Trust is formed, to the Litigation Trust pursuant to Section 22.13(b) of the Plan. Without limiting the foregoing, the Claims set forth in Section 2.3 of the Settlement Agreement shall be deemed subordinated in accordance with the terms and provisions of section 510 of the Bankruptcy Code (the “CIBC Subordinated Claims”).
9. On the Closing Date, each of the CIBC Claims listed on Exhibit “D” to the Settlement Agreement shall be deemed withdrawn, disallowed and expunged and ENE shall cause BSI to reflect such withdrawal, disallowance and expungement on the Claim’s Registry in the Debtors’ chapter 11 cases.
10. Notwithstanding any provision contained in the Settlement Agreement to the contrary, the Settlement Agreement shall have no negative effect upon the rights of the CIBC Entities with respect to, and the CIBC Entities shall be entitled to retain indefeasibly any distributions made or proceeds delivered pursuant to the Hawaii Order, the Choctaw/Zephyrus Order, the Rawhide Order or the KStar Order. Any distribution made or to be made pursuant to such orders and permitted in accordance with the provisions of Section 2.5 of the Settlement Agreement shall not be subject to challenge
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by the Debtors or the Reorganized Debtors or to any restriction or condition, including as to use or further transfer.
11. Upon the liquidation of the Omegron Guaranty Claim, by consent of the parties or entry of a Final Order of the Bankruptcy Court, (a) fifty percent (50%) of the Liquidated Omegron Guaranty Claim shall be deemed disallowed, and (b) at the option of CIBC World, which option must be exercised within five (5) Business Days of the liquidation of the Omegron Guaranty Claim, fifty percent (50%) of the Liquidated Omegron Guaranty Claim shall be deemed allowed; provided, however, that, in order to effectuate the exercise of the option, CIBC World shall pay to ENE, by wire transfer of immediately available funds, an amount equal to thirty percent (30%) of such allowed portion of the Liquidated Omegron Guaranty Claim; and, provided, further, that, in the event that CIBC World elects not to exercise the option available pursuant to Section 2.5 of the Settlement Agreement, the remaining fifty percent (50%) of the Liquidated Omegron Guaranty Claim shall be deemed subordinated in accordance with the provisions of Section 2.3 of the Settlement Agreement; and, provided, further, that solely for purposes of the Disputed Claims Reserve to enable the Enron Entities to make distributions to holders of Allowed General Unsecured Claims pursuant to the Plan, and expressly not for purposes of allowance or distribution, the Disbursing Agent shall, on and after the Closing Date, reserve and hold, for the benefit of CIBC World, an amount of Plan Currency (collectively, the “Reserve”), equal to the pro rata share of distributions which would be made to CIBC World if the Omegron Guaranty Claim were an Allowed Claim in the amount of Eighteen Million Dollars ($18,000,000.00) against ENE in Class 4 of the
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Plan. Until such time as the Omegron Guaranty Claim shall be compromised and settled or determined by a Final Order, the Disbursing Agent shall maintain the Reserve for the benefit of CIBC World, unless otherwise agreed by the Parties in writing, or unless otherwise ordered by the Court upon prior written notice to CIBC World. The Parties also agree and acknowledge that the Reserve shall constitute the maximum recovery on account of the Omegron Guaranty Claim if CIBC World exercises the option described above. BSI shall make appropriate entries in the Claims Registry to reflect that the Omegron Guaranty Claim is liquidated solely against ENE in Class 4 in the amount of Eighteen Million Dollars ($18,000,000.00).
12. On the Closing Date, any claims, causes of action, damages, obligations, rights and interests that the Enron Entities, the Debtors or the Reorganized Debtors may have against the CIBC Entities, including, without limitation, those asserted by the Plaintiffs in the MegaClaim Litigation or in the MegaClaim Objection, automatically shall be deemed completely, finally and fully satisfied and the CIBC Entities shall be deemed dismissed as Defendants from the MegaClaim Litigation with prejudice. For procedural clarity, within five (5) Business Days of the Closing Date, the Plaintiffs shall take any and all action as is appropriate to cause the clerk’s office to record the dismissal with prejudice of the CIBC Entities from the MegaClaim Litigation, including, without limitation, filing with the Bankruptcy Court a Stipulation of Dismissal With Prejudice, in the form annexed to the Settlement Agreement as Exhibit “E”.
13. On the Closing Date, the ASCC Litigation and the Transferee Suit automatically shall be deemed completely, finally and fully satisfied and the ASCC
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Litigation and the Transferee Suit shall be deemed dismissed, with prejudice, and distributions available to the holders of Allowed Claims with respect thereto shall be made as soon as practicable thereafter in accordance with the provisions of the Plan. For procedural clarity, within five (5) Business Days of the Closing Date, the Enron Entities shall take any and all action as is appropriate to cause the clerk’s office to record the dismissal with prejudice of the ASCC Litigation and the Transferee Suit, including, without limitation, filing with the Bankruptcy Court Stipulations of Dismissal With Prejudice, in the forms annexed to the Settlement Agreement as Exhibits “F” and “G”, respectively.
14. On the Closing Date, and without the need for the execution and delivery of additional documentation or the entry of any additional orders of the Bankruptcy Court, except as expressly provided in the Settlement Agreement, the CIBC Entities, each of their subsidiaries and affiliates and the successors and assigns of any of them and any other Person that claims or might claim through, on behalf of or for the benefit of any of the foregoing (collectively, the “CIBC Releasors”) shall be deemed to have irrevocably and unconditionally, fully, finally and forever waived, released, acquitted and discharged the Enron Entities, the other Debtors, if any, each of the Debtors’ estates, the Reorganized Debtors, their past or present parents, subsidiaries, affiliates, directors, officers, employees, and the successors and assigns of any of them, other than those Persons set forth on Exhibit “H” to the Settlement Agreement (the “Enron Excluded Parties”) (collectively, excluding the Enron Excluded Parties, the “Enron Releasees”) from any and all claims, demands, rights, liabilities, or causes of action of any and every kind,
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character or nature whatsoever, in law or in equity, known or unknown (including Unknown Claims), whether asserted or unasserted, which the CIBC Releasors, or any of them, or anyone claiming through them, on their behalf or for their benefit have or may have or claim to have, now or in the future, against any Enron Releasee that are based upon, relate to, or arise out of or in connection with the Claims, the CIBC Transactions or any claim, act, fact, transaction, occurrence, statement or omission in connection with the CIBC Transactions, or alleged in the MegaClaim Litigation or that could have been alleged in the MegaClaim Litigation or other similar proceeding (the “Enron Released Claims”). Notwithstanding anything contained in the Settlement Agreement or elsewhere to the contrary, (i) the foregoing is not intended to release, nor shall it have the effect of releasing, the Enron Releasees from the performance of their obligations in accordance with the Settlement Agreement and the terms of this Order; (ii) the foregoing is not intended to release, nor shall it have the effect of releasing, the rights of the CIBC Entities to receive and retain the payments or other distributions permitted pursuant to the provisions of Section 2.5 of the Settlement Agreement; and (iii) the CIBC Releasors specifically retain all rights they otherwise have or may obtain to seek discovery from the Enron Releasees, to name or identify any or all of the Enron Releasees as responsible parties in any litigation, and to seek to establish the legal liability of such Enron Releasees solely for defensive purposes or purposes of showing proportional responsibility and not for purposes of obtaining any affirmative recovery from the Enron Releasees; provided, however, that the CIBC Releasors are not permitted and agree not to join any of the Enron Releasees as parties to any suit or proceeding.
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15. On the Closing Date, and without the need for the execution and delivery of additional documentation or the entry of any additional orders of the Bankruptcy Court, except as expressly provided in the Settlement Agreement, the Enron Entities, the other Debtors, if any, each of the Debtors’ estates, the Reorganized Debtors, each of their subsidiaries and affiliates and the successors and assigns of any of them and any other Person that claims or might claim through, on behalf of or for the benefit of any of the foregoing (collectively, the “Enron Releasors”) shall be deemed to have irrevocably and unconditionally, fully, finally and forever waived, released, acquitted and discharged the CIBC Entities, their past or present parents, subsidiaries, affiliates, directors, officers, employees, and the successors and assigns of any of them (collectively, the “CIBC Releasees”) from any and all claims, demands, rights, liabilities, or causes of action of any and every kind, character or nature whatsoever, in law or in equity, known or unknown (including Unknown Claims), whether asserted or unasserted, which the Enron Releasors, or any of them, or anyone claiming through them, on their behalf or for their benefit have or may have or claim to have, now or in the future, against any CIBC Releasee that are based upon, relate to, or arise out of or in connection with the Claims, the CIBC Transactions, or any claim, act, fact, transaction, occurrence, statement or omission in connection with the CIBC Transactions, or alleged in the MegaClaim Litigation or the ASCC Litigation or that could have been alleged in the MegaClaim Litigation, the ASCC Litigation or other similar proceeding (the “CIBC Released Claims”). Notwithstanding anything contained in the Settlement Agreement or elsewhere to the contrary, the foregoing is not intended to release, nor shall it have the effect of releasing, the CIBC
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Releasees from the performance of their obligations in accordance with the Settlement Agreement and the terms of this Order.
16. Without in any way limiting the scope of decretal paragraph 14 hereof, from and after the Closing Date, if any claim or cause of action is commenced, asserted, continued or pursued by, on behalf of, or for the benefit of any of the CIBC Releasors against any Person other than the Enron Releasees and, as a direct or indirect result thereof, any Person seeks and successfully obtains, by way of judgment, settlement or otherwise, directly or indirectly, any contribution or indemnity from any of the Enron Releasees based upon, arising from, or related for the Enron Released Claims or any transaction underlying any Enron Released Claim, then no such CIBC Releasor shall execute on, collect on, obtain a lien based upon, or otherwise perfect or use in any manner any judgment or settlement in its favor unless the CIBC Releasor first reduces the judgment or settlement amount or otherwise structures such judgment or settlement, by agreement or otherwise, such that all liability of the Enron Releasees based upon contribution or indemnity is eliminated. Nothing contained in this decretal paragraph 16 shall require any CIBC Releasor to pay or otherwise be responsible for any attorneys’ fees or other costs of litigation incurred by any Enron Releasee in defense of a claim for contribution or indemnity, all such fees and costs being the sole responsibility and obligation of the Enron Releasee.
17. Without in any way limiting the scope of decretal paragraphs 14 and 16 hereof, in the event: (1) any of the CIBC Releasors commences, asserts, continues or pursues an action, suit, or other proceeding against any of the Enron Excluded Parties or
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any agent of any of the Enron Releasees (a “CIBC Target”) with respect to any Enron Released Claim (the “CIBC Target Claims”), (2) the CIBC Target has a claim for contribution or indemnity against any of the Enron Releasees with respect to costs and expenses incurred by the CIBC Target in connection with such CIBC Target Claim, and (3) a final judgment or Final Order is entered by a court of competent jurisdiction requiring the payment of any contribution or indemnity amount by any of the Enron Releasees (the “CIBC Indemnification Amount”), then(y) if the CIBC Target Claims are the sole claims against a CIBC Target in a given suit or other proceeding giving rise to a CIBC Indemnification Amount (a “Pure CIBC Claim Over”), the applicable CIBC Releasor shall indemnify the applicable Enron Releasee for the CIBC Indemnification Amount, but only to the extent of any actual payments made to the CIBC Target by the Enron Releasee, or (z) if the CIBC Target Claims are not the sole claims against a CIBC Target in a given suit or other proceeding giving rise to a CIBC Indemnification Amount, the applicable CIBC Releasor shall indemnify the applicable Enron Releasee for a per capita share of the CIBC Indemnification Amount (as determined by dividing the CIBC Indemnification Amount by the number of separately represented parties or groups of parties giving rise to the CIBC Indemnification Amount in that suit or other proceeding), but only to the extent of the per capita share of actual payments made to the CIBC Target by the Enron Releasee. In connection with any action or proceeding against an Enron Releasee with respect to any claim for contribution or indemnity, the Enron Releasee agrees to use its best good faith efforts to defeat such claim;provided, however, that, in a Pure CIBC Claim Over, the CIBC Entities shall have the right (but not the duty) to elect to
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direct the defense by such Enron Releasee of the claim for contribution or indemnity (a “Defense Election”). Nothing contained in this decretal paragraph 17 shall require any CIBC Releasor to pay or otherwise be responsible for any attorneys’ fees or other costs of litigation incurred by any Enron Releasee in defense of a claim for contribution or indemnity against any Enron Releasee, all such fees and costs being the sole responsibility and obligation of the Enron Releasee; provided,however, that, in the event of a Defense Election, the CIBC Entities shall act reasonably in directing the defense of a claim for contribution or indemnity.
18. Without in any way limiting the scope of decretal paragraph 15 hereof, from and after the Closing Date, if any claim or cause of action is commenced, asserted, continued or pursued by, on behalf of, or for the benefit of any of the Enron Releasors against any Person other than the CIBC Releasees and, as a direct or indirect result thereof, any Person seeks and successfully obtains, by way of judgment, settlement or otherwise, directly or indirectly, any contribution or indemnity from any of the CIBC Releasees based upon, arising from, or related to the CIBC Released Claims or any transaction underlying any CIBC Released Claim, then no such Enron Releasor shall execute on, collect on, obtain a lien based upon, or otherwise perfect or use in any manner any judgment or settlement in its favor unless the Enron Releasor first reduces the judgment or settlement amount or otherwise structures such judgment or settlement, by agreement or otherwise, such that all liability of the CIBC Releasees based upon contribution or indemnity is eliminated. Nothing contained in this decretal paragraph 18 shall require any Enron Releasor to pay or otherwise be responsible for any attorneys’ fees
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or other costs of litigation incurred by any CIBC Releasee in defense of a claim for contribution or indemnity against any CIBC Releasee, all such fees and costs being the sole responsibility and obligation of the CIBC Releasee. The rights and obligations set forth in this decretal paragraph 18 shall not apply to claims and causes of action in which contribution or indemnity is sought and obtained from any CIBC Releasee based solely upon such CIBC Releasee’s acquisition or assignment of a claim or proof of claim against the Debtors, the Debtors’ chapter 11 estates or the Reorganized Debtors during the period from and after the Petition Date.
19. Without in any way limiting the scope of decretal paragraphs 15 and 17 hereof, in the event: (1) any of the Enron Releasors commences, asserts, continues or pursues an action, suit or other proceeding against any agent of any of the CIBC Releasees (an “Enron Target”) with respect to any CIBC Released Claim (the “Enron Target Claims”), (2) the Enron Target has a claim for contribution or indemnity against any of the CIBC Releasees with respect to costs and expenses incurred by the Enron Target in connection with such Enron Target Claim, and (3) a final judgment or Final Order is entered by a court of competent jurisdiction requiring the payment of any contribution or indemnity amount by any of the CIBC Releasees (the “Enron Indemnification Amount”), then the applicable Enron Releasor shall indemnify the applicable CIBC Releasee for the Enron Indemnification Amount but only to the extent of any actual payments made to the Enron Target by the CIBC Releasee. In connection with any action or proceeding against an CIBC Releasee with respect to any claim for contribution or indemnity, the CIBC Releasee agrees to use its best good faith efforts to defeat such claim. Nothing contained in
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this decretal paragraph 19 shall require any Enron Releasor to pay or otherwise be responsible for any attorneys’ fees or other costs of litigation incurred by any CIBC Releasee in defense of a claim for contribution or indemnity against any CIBC Releasee, all such fees and costs being the sole responsibility and obligation of the CIBC Releasee. The rights and obligations set forth in this decretal paragraph 19 shall not apply to claims and causes of action in which contribution or indemnity is ordered from any CIBC Releasee based solely upon such CIBC Releasee’s acquisition or assignment of a claim or proof of claim against the Debtors or the Debtors’ chapter 11 estates during the period from and after the Petition Date.
20. The release of the CIBC Released Claims set forth at decretal paragraph 15 hereof is intended to apply only to the CIBC Releasees and shall not have the effect of releasing any other person that may be a Defendant or a defendant in any adversary proceeding or other litigation pending before the Bankruptcy Court or such other court of competent jurisdiction.
21. The release of the Enron Released Claims set forth at decretal paragraph 14 hereof is intended to apply only to the claims set forth therein and shall have no negative effect on the validity and enforceability of the Resolved Claims.
22. The CIBC Entities shall, as part of any subsequent settlement by the Plaintiffs of the MegaClaim Litigation with any Non-Settling Defendant(s), provide a full and complete release of all claims against such Defendant(s) and any of its (their) partners, principals, officers or directors to the extent those claims arise out of the claims in the MegaClaim Litigation, including, but not limited to, claims for contribution or indemnity,
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arising under federal, state or foreign law. The release set forth in the foregoing sentence shall be conditioned upon the Enron Entities obtaining comparable releases for the CIBC Entities from any other Defendants in the MegaClaim Litigation who settle with the Plaintiffs.
23. Each and every Person (including, but not limited to, all other Defendants in the MegaClaim Litigation) is permanently enjoined, barred and restrained from instituting, prosecuting, pursuing or litigating in any manner any claim or action for contribution or indemnity against the CIBC Releasees, based upon liability or responsibility, or asserted or potential liability or responsibility, either directly or indirectly of any Person to or for the benefit of any Enron Releasee arising from or related to the claims, acts, facts, transactions, occurrences, statements or omissions that are, could have been or may be alleged in the MegaClaim Litigation, the ASCC Litigation or in any other action brought or that might be brought by, through, on behalf of, or for the benefit of the Enron Releasees or any of them (whether arising under federal, state or foreign law and regardless of where asserted). Any Person so enjoined, barred and restrained shall be entitled to a settlement and/or judgment credit in accordance with any applicable statutory or common law rule. This provision shall not be considered or deemed in any way to be a determination or concession by the Plaintiffs as to whether the Financial Institution Defendants are subject to joint and several liability in the MegaClaim Litigation, as to which law is applicable in any manner in the MegaClaim Litigation, or as to whether any particular loss allocation or comparative responsibility statute or common law rule is applicable in any manner in the MegaClaim Litigation. Nothing contained in this Order
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shall limit the rights of the Non-Settling Defendants to obtain discovery from the CIBC Releasees, develop evidence in discovery and/or present evidence or arguments at trial to support a judgment reduction credit that reflects a proportionate share of responsibility, if any, allocable to the CIBC Releasees. This Order also shall not limit the rights of the Non-Settling Defendants to defend the MegaClaim Litigation and to assert any substantive or procedural rights provided by applicable law, subject, however, to the bar on instituting, prosecuting, pursuing or litigating in any manner claims against the CIBC Releasees, including, without limitation, claims against the CIBC Releasees for contribution or indemnity as set forth above.
24. The Settlement Agreement and any related agreements, documents or other instruments may be modified, amended or supplemented by the Parties’ mutual agreement thereto, in a writing signed by the Parties, and in accordance with the terms thereof without further order of the Bankruptcy Court;provided, however, that, any such modification, amendment or supplement shall not be material in nature and not change the economic substance of the transactions contemplated hereby.
25. Each and every federal, state and local governmental agency or department is hereby directed to accept any and all documents and instruments necessary and appropriate to consummate the transactions contemplated by the Settlement Agreement. This Order is and shall be binding upon and shall govern the acts of all such entities, including, without limitation, all filing agents, filing officers, title agents, title companies, recorders of mortgages, recorders of deeds, registrars of deeds, registrars of patents, trademarks or other intellectual property, administrative agencies, governmental
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departments, secretaries of state, federal, state, and local officials, and all other persons and entities, who may be required by operation of law, the duties of their office, or contract, to accept, file, register or otherwise record or release any documents or instruments that reflect, the consummation of the transactions contemplated by the Settlement Agreement.
26. The failure to specifically include any particular provisions of the Settlement Agreement in this Order shall not diminish or impair the effectiveness of such provisions, it being the intent of the Bankruptcy Court that the Settlement Agreement and the transactions contemplated thereby be approved in their entirety and performed in accordance with their terms. Any conflict between the terms and provisions of this Order and the Settlement Agreement shall be resolved in favor of this Order.
27. The terms and provisions of the Settlement Agreement, together with the terms and provisions of this Order, shall be binding on and inure to the benefit of the Parties to the Settlement Agreement, each of the remaining Debtors, Reorganized Debtors and Enron Entities, and their respective estates and creditors, and other parties in interest, and any successors, assigns or affiliates of such persons and entities, including, without limitation, (a) any fiduciary, committee, trustee or examiner now existing or appointed in the future in these cases or any subsequent or converted cases of the Debtors under chapter 7 or chapter 11 of the Bankruptcy Code and (b) any purchaser, agent for a purchaser or assignee of any of the CIBC Claims. This Order shall also be binding in all respects upon any affected third parties, including, without limitation, those asserting a lien or claim against, or interest in, the Debtors’ estates.
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28. The provisions of this Order are nonseverable and mutually dependent.
29. The 10-day stay imposed pursuant to Bankruptcy Rule 6004(g) shall not be in effect, and this Order shall be effective and enforceable immediately upon entry. Any party objecting to this Order must exercise due diligence in filing an appeal and pursuing a stay or risk such appeal being foreclosed as moot in the event the parties elect to close the transactions contemplated by the Settlement Agreement prior to this Order becoming a final order.
30. No person or entity shall take any action to prevent, enjoin or otherwise interfere with the consummation of the Settlement Agreement.
31. The requirement set forth in Rule 9013-1(b) of the Local Rules that any motion or request for relief be accompanied by a memorandum of law is hereby deemed satisfied by the contents of the Motion.
32. The Bankruptcy Court shall retain jurisdiction to hear and determine all matters arising from the interpretation, implementation and enforcement of this Order, the Settlement Agreement and any disputes arising from, and all documents executed, in connection therewith.
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