Case Nos. 02-08697, through 02-08738 (Jointly Administered)United States Bankruptcy Court, N.D. Illinois
June 18, 2002
STIPULATION AND ORDER APPROVING MOTION TO (A) APPROVE ORDER MODIFYING THE FINAL ORDER (I) AUTHORIZING DEBTORS IN POSSESSION TO ENTER INTO POSTPETITION CREDIT AGREEMENT AND OBTAIN POSTPETIOTION FINANCING PURSUANT TO SECTIONS 363 AND 364 OF THE BANKRUPTCY CODE, (II) GRANTING LIENS, SECURITY INTERESTS AND SUPERPRIORITY CLAIMS AND (III) PROVIDING FOR THE PAYMENT OF SECURED PREPETITION INDEBTEDNESS, AND (B) EXTEND BAR DATE FOR FILING OF PROOFS OF CLAIM BY PREPETITION AGENTS AND PREPETITION LENDERS
JOHN H. SQUIRES, United States Bankruptcy Judge
The Official Committee of Unsecured Creditors (the “Committee”), Citicorp USA, Inc., as Administrative Agent (the “Administrative Agent”), and the Debtors, by and through their respective counsel, hereby enter into this Stipulation and Order Approving Motion to (A) Approve Order Modifying the Final Order (I) Authorizing Debtors In Possession to Enter Into Postpetition Credit Agreement And Obtain Postpetition Financing Pursuant to Sections 363 And 364 of the Bankruptcy Code, (II) Granting Liens, Security Interests and Superpriority Claims and (III) Providing For the Payment of Secured Prepetition Indebtedness, and (B) Extend Bar Date For Filing Proofs of Claim By Prepetition Agents And Prepetition Lenders (the “Stipulation”) as of this ____day of June, 2002, and intending to be legally bound hereby, agree and stipulate as follows:
A. BACKGROUND
1. On March 6, 2002 (the “Petition Date”), National Steel Corporation (“National Steel”) and certain of its subsidiaries and affiliates (together, the “Debtors”) commenced these cases by filing voluntary petitions for relief under Chapter 11 of the Bankruptcy Code 11 U.S.C. § 101, et seq. (the “Code”).
2. On March 18, 2002, the Office of the United States Trustee for the Northern District of Illinois (the “U.S. Trustee”) appointed the Committee pursuant to section 1102 of the Bankruptcy Code.
3. Prior to the Petition Date, various lending institutions (collectively, the “Prepetition Lenders”) made loans and advanced credit to National Steel Corporation (“National”) and certain of its affiliates (the “Guarantors”) under and pursuant to a Credit Agreement dated as of September 28, 2001, as amended from time to time (the “Prepetition Credit Agreement”) between National, as Borrower, the Guarantors, the Administrative Agent and the Prepetition Lenders. Pursuant to the Prepetition Credit Agreement, and in consideration for loans and other advances made to National and the Guarantors thereunder, National and the Guarantors granted to the Administrative Agent for the benefit of the Prepetition Lenders security interests in and liens on substantially all of their personal property (other than the assets that secure the Public Bonds and Project Financings (each as defined in the Motion For Interim And Final Orders Pursuant to 11 U.S.C. § 364(I) Authorizing Postpetition Financing; (II) Granting Liens And Superpriority Claims; And (III) Scheduling A Final Hearing Pursuant To Fed.R.Bankr.P. 4001 (the “DIP Motion”)) wherever located, then owned or thereafter acquired or arising, and the proceeds, products, rents and profits of all of the foregoing, all as more specifically provided in the Prepetition Credit Agreement and ancillary documents (collectively, the “Prepetition Revolver Collateral”‘).
4. On March 6, 2002, National and certain of its subsidiaries (collectively, the “Debtors”) filed the DIP Motion. Pursuant to the DIP Motion, the Debtors requested, among other things, that the Court enter an Order permitting the Debtors to incur postpetition indebtedness and obtain postpetition loans (the “Postpetition Loans”) pursuant to and in accordance with the terms of the proposed form of Order attached to the DIP Motion (the “Interim DIP Order”) and a certain Secured Super-Priority Debtor-in-Possession Revolving Credit Agreement (the “DIP Agreement”) which Postpetition Loans were to be advanced by the Postpetition Lenders (as such term is defined in the Interim DIP Order). The Administrative Agent is also the administrative agent for the Postpetition Lenders under the DIP Agreement. A hearing on the DIP Motion occurred on March 7, 2002, and thereafter the Court entered the Interim DIP Order and otherwise granted the relief requested by the Debtors as set forth in the DIP Motion.
5. On or about April 2, 2002, the Court entered the Final Order (I) Authorizing Debtors In Possession To Enter into Postpetition Credit Agreement And Obtain Postpetition Financing Pursuant To Sections 363 and 364 of the Bankruptcy Code, (II) Granting Liens, Security Interests And Superpriority Claims And (III) Providing For the Payment of Secured Prepetition Indebtedness (the “Final DIP Order”).
6. Pursuant to paragraph 12 of the Final DIP Order, the Committee has the right to assert Claims and Defenses (as such terms are defined in the Final DIP Order) against the Prepetition Lenders and Prepetition Agents (as such term is defined Final DIP Order) only if such Claims and Defenses are commenced in this Court on or before June 17, 2002.
B. STIPULATION
7. The Committee and the Administrative Agent on behalf of the Prepetition Lenders, have agreed to amend paragraph 12 of the Final DIP Order as follows:
Notwithstanding anything to the contrary in paragraph 12 of the Final DIP Order, the date on or before which the Committee must commence an action in this Court to assert the following types, and only the following types, of Claims and Defenses is extended from June 17, 2002 until August 16, 2002: Claims and Defenses that are based on (a) facts and events that occurred prior to the Petition Date and (b) either (i) on the receipt by the Prepetition Lenders or the Prepetition Agents, as the case may be, of transfers that are found to be or constitute preferential transfers, fraudulent conveyances or fraudulent transfers (whether under federal or applicable state law) or (ii) any lender liability cause of action. The Committee hereby agrees and acknowledges that the liens of the Administrative Agent on the Prepetition Revolver Collateral securing the Prepetition Loans attached and were properly perfected under Article 9 of the Uniform Commercial Code in effect in the State of Delaware to the extent that the perfection of such liens is governed by Article 9 of the Uniform Commercial Code in effect in the State of Delaware. Except as so modified herein, paragraph 12 of the Final DIP Order remains in full force and effect
8. Except as set forth in this Stipulation, all terms and conditions of the Final DIP Order remain in full force and effect.
9. The bar date for filing proofs of claim in the Debtors’ bankruptcy cases is hereby extended until October 15, 2002 for the Prepetition Agents and the Prepetition Lenders.
10. Notwithstanding the date upon which this Stipulation is entered by this Bankruptcy Court, this Stipulation shall be deemed effective as of June 17, 2002.
11. The Bankruptcy Court shall retain jurisdiction for any disputes regarding this Stipulation.
12. This Stipulation shall not be amended or modified without the written consent of all parties hereto.
13. The terms of this Stipulation have been negotiated in good faith and at arms length, with all parties represented by counsel.
14. The Committee believes that, under the circumstances, the foregoing terms of the Stipulation are in the best interest of the Debtors, their estates, and their creditors.
15. This Stipulation may be executed in any number of counterparts, and each such counterpart shall be deemed an original, and all such counterparts shall constitute one and the same Stipulation.
IN WITNESS WHEREOF, the parties, by and through their respective counsel, have caused this Stipulation to be executed as of the date first set forth above.