Case No. 02 B 12059 (Jointly Administered), Claim No. 397.United States Bankruptcy Court, N.D. Illinois, Eastern Division.
March 22, 2005
Neal L. Wolf, Todd L. Padnos, Michael B. Schwarz, LEBOEUF, LAMB, GREENE MACRAE, L.L.P. San Francisco, CA Counsel for the HA2003 Liquidating Trust
Edward C. Dolan, HOGAN HARTSON L.L.P. Washington, D.C. Counsel for LAGA, Inc.
CAROL DOYLE, Bankruptcy Judge
ORDER AUTHORIZING THE HA2003 LIQUIDATING TRUST TO SETTLE CLAIM BY LAGA, INC. (CLAIM NO. 397)
This matter having come before the Court for hearing on the Motion Of The HA2003 Liquidating Trust For An Order Authorizing The Trust To Settle Claim Asserted By LAGA, Inc. (Claim No. 397) (the “Motion”);[2] it appearing that this Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334; it appearing that this proceeding is a core proceeding pursuant to 28 U.S.C. § 157(a); it appearing that notice of the Motion was appropriate; and it appearing that the relief requested in the Motion is appropriate, within the business judgment of the HA2003 Liquidating Trust and in the best interest of the beneficiaries of the HA2003 Liquidating Trust; and after due deliberation and cause appearing therefor;
IT IS HEREBY ORDERED as follows:
1. The Motion is granted and the Trust is hereby authorized to settle the Claim filed by LAGA, Inc. (“LAGA”) pursuant to the terms set forth in the Stipulation attached hereto as Exhibit A, which terms are hereby approved and incorporated herein by reference.
2. Claim Number 397 is hereby allowed as a Class 4 general unsecured claim in the amount of Five Hundred Thousand Dollars ($500,000.00). The balance of Claim Number 397 is hereby disallowed.
3. Each party shall bear its own attorneys’ fees and costs.
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4. The Court shall retain jurisdiction with respect to any matters, claims, rights or disputes arising from or related to the implementation of this Order.
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UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
In re: ) Case No.: 02 B 12059 ) (Jointly Administered) )
HA 2003, Inc., formerly known as ) HA-LO INDUSTRIES, INC., et al. ) Chapter 11 )
Debtors and ) Debtors-in-Possession ) Hon. Carol A. Doyle )
) Claim No. 397
STIPULATION AND ORDER FOR PARTIAL ALLOWANCE OF CLAIM BY LAGA, INC. (CLAIM NO. 397)
THIS STIPULATION is made by and between the HA2003 Liquidating Trust (the “Liquidating Trust”) and LAGA, Inc. (“LAGA”) (collectively referred to as the “Parties”), by and through their attorneys of record, with reference to the following facts:
A. On or about March 10, 2002, LAGA timely filed claim No. 397 with the United States Bankruptcy Court for the District of Delaware (the “Claim”). The total amount of the claim is $4,655,000.00. The basis for the Claim is a demand for indemnification under a Stock Purchase Agreement (the “Stock Purchase Agreement”) between HA-LO Industries, Inc. (“HA-LO”) and LAGA dated May 25, 2001. A copy of the Stock Purchase Agreement (excluding the schedules thereto) is attached to the Claim. A Copy of the Claim is attached as Exhibit A hereto.
B. On May 25, 2004, the Liquidating Trust filed its Objection and Request for Disallowance of Claim Filed By LAGA, Inc. (Claim No. 397).
C. On June 16, 2004, LAGA filed its Response of LAGA, Inc. to HA2003 Liquidating Trust’s Objection to Claim No. 397.
D. On July 22, 2004, the Liquidating Trust filed its Amended Objection and Request for Disallowance of Claim filed by LAGA, Inc. (Claim No. 397).
E. On August 11, 2004, LAGA filed its Response of LAGA, Inc. to HA2003 Liquidating Trust’s Amended Objection to and Request for Disallowance of Claim No. 397.
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F. On September 13, 2004, the Liquidating Trust filed its Reply of HA2003 Liquidating Trust to the Response of LAGA, Inc. to Amended Objection to and Request for Disallowance of Claim filed by LAGA, Inc. (Claim No. 397).
G. On January 18, 2005, the Liquidating Trust filed is Complaint For Subordination of Claim Filed by LAGA, Inc. Pursuant to 11 U.S.C. § 510(b) (the “Adversary Proceeding”).
H. On or about February 17, 2005, LAGA filed its Answer Of LAGA, Inc. To Complaint For Subordination Of Claim.
I. LAGA represents and warrants that: (i) the Claim arises from the obligations of HA2003, Inc. formerly known as HA-LO, under the Stock Purchase Agreement, (ii) LAGA has no other claims against any of the debtors herein; (iii) no other person or entity has a claim or any entitlement to assert a claim on behalf of or through LAGA against HA-LO or its successors in interest arising from the Stock Purchase Agreement or any transaction related thereto; (iv) LAGA has not assigned or transferred any interest arising under the Stock Purchase Agreement to any other person or entity, and (v) the Claim has not been assigned, hypothecated, transferred to, nor does it reside in any person or entity other than LAGA, whether by agreement or operation of law or otherwise, including through an assignment or transfer pursuant to any right or claim of subrogation.
J. The parties desire to avoid the uncertainties and expense of litigation, and to fully and completely settle and compromise the aforementioned Claim by this Stipulation without admission and specifically with denial of all assertions of liability except as set forth herein with respect to the “Allowed Class 4 Claim” (as that term is defined hereafter).
NOW THEREFORE, in consideration for the foregoing facts, which are incorporated herein, and subject to the approval of the Bankruptcy Court, the parties stipulate and agree as follows:
1. Claim No. 397 shall be allowed as a Class 4 general unsecured claim in the amount of Five Hundred Thousand United States Dollars (US $500,000.00) without further defense, offset or reduction (the “Allowed Class 4 Claim”). All other amounts sought in Claim
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No. 397 shall be disallowed.
2. The Parties jointly agree to seek an order that the Allowed Class 4 Claim shall not be subordinated pursuant to 11 U.S.C. § 510(b), or otherwise. The settlement evidenced by this Stipulation and Order shall resolve all liabilities as between the Liquidating Trust and the debtors on the one hand and LAGA on the other, including those of the respective affiliates, subsidiaries, successors in interest, officers, directors, agents and representatives of each in such capacities, save and except only for LAGA’s continuing rights with respect to the Allowed Class 4 Claim.
3. The Liquidating Trust has agreed that the Allowed Class 4 Claim has or shall be included within the calculation of first interim distributions to be made under the debtors’ confirmed plan; and that a check payable to LAGA representing the first interim distribution on account of the Allowed Class 4 Claim, if issued prior to court approval of this Stipulation and Order, shall be held by the Liquidating Trust pending such approval and shall be promptly sent to LAGA following such approval.
4. Upon approval of this Stipulation by the Bankruptcy Court, the Liquidating Trust shall file a Notice pursuant to Rule 41 of the Federal Rules of Civil Procedure dismissing the Adversary Proceeding with prejudice.
5. The Parties hereby consent to the entry of an order substantially in the form of the proposed order attached as Exhibit B hereto.
6. Each party shall bear its own attorneys’ fees and costs.
Dated: March 2, 2005 
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Dated: March 1, 2005 
EXHIBIT AEXHIBIT A
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EXHIBIT B (Proposed Order) IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
In re: ) Case No. 02 B 12059 (Jointly Administered) )
HA2003, Inc. formerly known as ) Chapter 11 HA-LO INDUSTRIES, INC., et al., ) ) Hon. Carol A. Doyle Debtors and ) Debtors-In-Possession. ) Claim No. 397
ORDER AUTHORIZING THE HA2003 LIQUIDATING TRUST TO SETTLE CLAIM BY LAGA, INC. (CLAIM NO. 397)
This matter having come before the Court for hearing on the Motion Of The HA2003 Liquidating Trust For An Order Authorizing The Trust To Settle Claim Asserted By LAGA, Inc. (Claim No. 397) (the “Motion”);[1] it appearing that this Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334; and it further appearing that this proceeding is a core proceeding pursuant to 28 U.S.C. § 157(a); and it further appearing that the notice provided in connection with the Motion was appropriate and timely; and it further appearing that the relief requested in the Motion is appropriate, within the business judgment of the HA2003 Liquidating Trust and in the best interest of the beneficiaries of the HA2003 Liquidating Trust; and after due deliberation and good cause appearing therefor;
IT IS HEREBY ORDERED as follows:
1. The Motion is granted and the HA2003 Liquidating Trust is hereby authorized to settle the Claim filed by LAGA, Inc. (“LAGA”) (Claim No. 397) pursuant to the terms set forth in the Stipulation attached hereto as Exhibit A, which terms are hereby approved and incorporated herein by reference.
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2. Claim No. 397 is allowed as a Class 4 general unsecured claim in the amount of Five Hundred Thousand United States Dollars (US $500,000.00) without further defense, offset or reduction (the “Allowed Class 4 Claim”). All other amounts sought in Claim No. 397 are disallowed.
3. Each party shall bear its own attorneys’ fees and costs.
4. The Court shall retain jurisdiction with respect to any matters, claims, rights or disputes arising from or related to the implementation of this Order.
Dated: _____________ ____________________________________ The Honorable Carol A. Doyle United States Bankruptcy Court Judge
EXHIBITS TO PROPOSED ORDER INTENTIONALLY OMITTED