Case No. 01-16034 (AJG), Jointly Administered.United States Bankruptcy Court, S.D. New York.
August 12, 2005
Martin J. Bienenstock (MB 3001), Brian S. Rosen (BR 0571), Melanie Gray (Pro Hac Vice), WEIL, GOTSHAL MANGES LLP, New York, Attorneys for the Reorganized Debtors.
Robert Quick, General Counsel, EDF Trading Limited, London WC1V 6ED, On behalf of EDF Trading Limited.
STIPULATION AND ORDER BETWEEN ENRON CORP. AND EDF TRADING LIMITED REGARDING CLAIM NUMBERS 16463 AND 24589
ARTHUR GONZALEZ, Bankruptcy Judge
Enron Corp. (“Enron”) and EDF Trading Limited (“EDF”, and together with Enron, the “Parties”), by and through their respective counsel do hereby stipulate as follows:
RECITALS
A. Commencing on December 2, 2001 (the “Petition Date”), Enron and certain of its affiliated debtor entities (collectively, the “Debtors” or “Reorganized Debtors”), filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). The Debtors’ chapter 11 cases were procedurally consolidated for administrative purposes.
B. On July 15, 2004, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) entered an order confirming the Debtors’ Supplemental Fifth Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, dated as of January 9, 2004, as subsequently modified (the “Plan”).[1] The Plan became effective on November 17, 2004 (the “Effective Date”), and the Reorganized Debtors emerged from chapter 11.
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Factual Background
C. Enron Capital Trade Resources Limited (“ECTRL”), an affiliate of Enron, and EDF were parties to various financial and energy agreements (the “Agreements”).
D. In connection with certain of the Agreements, Enron executed a guaranty dated February 27, 2001 in favor of EDF, as amended on September 18, 2001 (the “Guaranty”).
E. On November 29, 2001, ECTRL was placed into administration in the United Kingdom. According to ECTRL’s books and records, EDF is indebted to ECTRL in the amount of approximately $121,000 in connection with the Agreements.
Claims Filed By EDF
F. On January 9, 2004, EDF filed a general unsecured claim against Enron in the amount of $1,374,686, based on the Guaranty and on amounts allegedly owing by ECTRL to EDF under the Agreements (“Claim No. 24589”). Claim No. 24589 amends and supercedes, in its entirety, proof of claim number 16463 previously filed by EDF (“Claim No. 16463”).
G. In connection with the voting and solicitation process, EDF elected for Claim No. 16463 to be treated in accordance with section 28.2 of the Plan. Because Claim No. 16463 was amended and superceded by Claim No. 24589, the election under section 28.2 of the Plan applies to Claim No. 24589. As a result, on January 28, 2005, the Bankruptcy Court entered a stipulation and order dismissing the Adversary Proceeding, described below, and discounting Claim No. 24589 by 55% in the event that such claim is ultimately allowed by the Bankruptcy Court. See Adv. Pro. No. 03-93555, Docket No. 10.
Objections Filed By Enron
H. On November 26, 2003, Enron filed an adversary proceeding entitled Enron Corp. v. EDF Trading Limited, Adv. Pro. No. 03-93555 (AJG) in the Bankruptcy Court, seeking, inter
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alia, to avoid the Guaranty as a constructive fraudulent conveyance (the “Adversary Proceeding”).
I. On March 3, 2005, Enron filed an objection to Claim No. 24589 (the “Objection”) (Docket No. 24034), seeking the disallowance and expungement of such claim on the grounds that EDF did not have a valid claim against ECTRL under the Agreements, or any corresponding claim against Enron under the Guaranty. The hearing on the Objection is scheduled for July 28, 2005.
J. The Parties have actively engaged in arms-length negotiations to resolve Claim Nos. 16463 and 24589 and have reached a good faith settlement pursuant to the terms set forth below. Enron submits that this proposed resolution will benefit Enron’s estate by eliminating unnecessary litigation costs.
K. NOW, THEREFORE, in consideration of the forgoing, and other good and valuable consideration the sufficiency and adequacy of which is hereby acknowledged by the Parties, the Parties, by their undersigned counsel, stipulate and agree as follows:
AGREEMENT
1. The Recitals are fully incorporated herein by reference.
2. Claim No. 16463 and all scheduled liabilities related to EDF are withdrawn and expunged with prejudice.
3. Claim No. 24589 is allowed as a Class 4 general unsecured claim against Enron in the amount of $114,747.70, in full and complete satisfaction of such claim. This allowed amount reflects the application of the 55% discount arising under section 28.2 of the Plan. Distributions on Claim No. 24589 shall be made only in accordance with the Plan.
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4. This Stipulation and Order is subject to the approval of the Bankruptcy Court after notice and a hearing (if necessary) as required by the Bankruptcy Code and applicable rules. The entry of this Stipulation and Order by the Bankruptcy Court shall constitute the Bankruptcy Court’s finding that due and adequate notice of the Stipulation and Order was given, and that good cause exists for granting the relief provided in the Stipulation and Order.
5. Upon entry of this Stipulation and Order by the Bankruptcy Court, the Objection shall be withdrawn with prejudice.
6. This Stipulation and Order sets forth the entire understanding of the Parties hereto and is intended to be the complete and exclusive statement of the terms thereof and may not be modified or amended except by a writing signed by all the Parties hereto, which shall be so-ordered by the Bankruptcy Court.
7. This Stipulation and Order may be executed in any number of counterparts or with detachable signature pages and shall constitute one agreement, binding upon all Parties thereto as if all Parties signed the same document; all facsimile signatures shall be treated as originals for all purposes.
8. This Stipulation and Order shall be governed by the laws of the State of New York. The Bankruptcy Court shall retain jurisdiction over any disputes arising hereunder.
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SO ORDERED.