Chapter 11 Cases, Case No. 01-27062-BKC-RBR, Case No. 01-27063-BKC-RBR, Case No. 01-27064-BKC-RBR, Case No. 01-27065-BKC-RBR, Case No. 01-27066-BKC-RBR, Case No. 01-27067-BKC-RBR, Case No. 01-27068-BKC-RBR, Case No. 01-27069-BKC-RBR, (Jointly Administered)United States Bankruptcy Court, S.D. Florida.
September 29, 2001
AGREED ORDER GRANTING EMERGENCY EX-PARTE MOTION TO ABANDON INTEREST IN OR REJECT EXECUTORY CONTRACTS RELATING TO VESSELS AS TO CAI GROUP VESSELS
RAYMOND B. RAY, United States Bankruptcy Judge.
THIS MATTER came onto be heard before the Court on September 26 and 28, 2001 at 1:30 P.M. and 9:30 A.M., respectively, in Fort Lauderdale, Florida, on the Emergency Exparte[1] Motion to Abandon Interest in Vessels (the “Motion”), filed by the above-captioned Debtors and debtors-in-possession in the above-captioned Chapter 11 cases (collectively, the “Debtors”); the Court having reviewed the Motion and having heard the argument of counsel in support of the relief requested; it appearing to the Court that (a) the Court has jurisdiction over this matter pursuant to 28 U.S.C. § § 157 and 1334 and (b) this is a core proceeding pursuant to 28 U.S.C. § 157 (b)(2); the Court finding that the notice given by the Debtors under the circumstances was sufficient; and the Court being fully advised in the premises and having determined that the legal and factual bases set forth in the Motion and presented at the hearing establish just cause for the relief granted herein, as to the CAT Group Vessels, as hereafter defined. Further, the Court having been advised by counsel forte Debtors, Credit Agricole Indosuez (“CAI”) and the respective owners of the CAT Group Vessels, as follows: Brehat Cruises, Hedic Cruises, Houat Cruises, Ouessant Cruises and Remy Navigation Company (collectively, the owners together with CAI, the “CAI Group”), that the matters as to the CAI Group Vessels, have been resolved by the parties, the terms of which have been stated on the record and memorialized herein,
IT IS HEREBY ORDERED THAT:
1. The Motion is granted pursuant to the terms of this Order. The agreement as to vessels R One, R Two, R Five, R Six, R Seven and R Eight (collectively, “CAI Group Vessels”) as set forth herein, is hereby approved.
2. The Debtors appear to have limited resources available totem, which resources now need to be directed towards the safety and repatriation of their passengers and crew and the maximization of assets for general unsecured creditors. Utilization of the limited funds available to the estates to maintain the CAI Group Vessels for the benefit of the CAI Group would be unduly burdensome to general unsecured creditors of the Debtors’ estates. 11 U.S.C. § 554 permits the Debtors to abandon their interest in property that is burden some to the estate and which has inconsequential value to the estate, except as to the Debtors’ cash on board the CAI Group Vessels, which is dealt with separately in this Order. Pursuant to 11 U.S.C. § 365
(a), the Debtors may reject executory contracts that are burdensome to their respective estates.
3. F.R.Bankr.P. 6007(a) provides that notice of abandonment of assets is effective upon
15-day notice. This Court is authorized to reduce the 15-day period where appropriate pursuant to F.R.Bankr.P.9006(c). Given the magnitude of the extraordinary burden upon the Debtors to maintain the vessels for the benefit of the CAI Group for the duration of the 15-day notice period applicable to abandonment proceedings under § 554 of the Bankruptcy Code, the instant circumstances present just such a circumstance where the reduction of time contemplated by the Rules is appropriate. Further, the relief being granted hereby is by agreement of the Debtors and the CAI Group.
4. The Debtors’ interests under the charter and other arrangements in the CAI Group Vessels, are or could be in the nature of an interest in an executory contract, and such interests are similarly subject to this Order and they are, therefore, deemed rejected pursuant to 11 U.S.C. § 365, to the extent. applicable.
5. Subject to the satisfaction of the conditions set forth herein. the abandonment of all of the Debtors’ right, title and interest in and to the CAI Group Vessels and the rejection of the Debtors’ interests in any executory contracts which govern or evidence the Debtors’ interest in such CAI Group Vessels shall be effective retroactively to September 28, 2001 at 9:30 AM. Eastern Daylight Savings Time (such time and date, the “Effective Date of this Order”). Abandonment or rejection as to the CAI Group Vessels is effective as of the Effective Date of this Order, whether these vessels are at sea or in port.
6. The Debtors have agreed to accommodate the CAI Group in the manner set forth herein, with respect to the orderly transfer of control of the CAT Group Vessels which are amongst the vessels subject of the Motion, in return for the CAI Group agreeing to the provisions of this order and the obligations set forth herein.
7. Certain essential shipboard employees of the Debtors or its agent (“Essential Crew Members”) will remain with the CAI Group Vessels, and will become employees of the CAT Group, or its designee, upon the Effective Date of this Order, to enable the CAI Group to have the CAI Group Vessels sailed to aport designated by CAI Group. The CAI Group agrees to payall repatriation expenses for all Essential Crew Members. The CAI Group agrees to pay two (2) months severance pay to the Essential Crew Members.
8. The CAI Group shall pay to all shipboard employees of the Debtors on the CAI Group Vessels other than the Essential Crew Members and specifically excluding all employees of concessionaires operating on the CAI Group Vessels (such shipboard employees not including the Essential Crew Members and expressly excluding the employees of the concessionaires, the “Shipboard Employees”). The CAI Group shall pay (i) all September 2001 wages due to the Shipboard Employees and the Essential Crew Members and (ii) one (1) months severance pay to all Shipboard Employees, either (a) directly to such crew members if such wages and/or severance have not been previously been paid by the Debtors to the crew members or (b) to the Debtors as provided in Section 9 hereof if such amounts have been paid by the Debtors to such crew members.
9. In this Court’s Order on the Emergency Motion of the Debtors for an Order Authorizing the Debtors to (1) Pay Prepetition Employee Wages, Salaries, and Related Items; (2) Reimburse Prepetition Employee Business Expense, (3) Make Payments for Which Payroll Deductions Were Made, (4) Make Prepetition Contributions and Pay Benefits Under Employee Benefit Plans and (5) Pay All Costs Incident to the Foregoing Payments and Contributions and (6) Authorizing Applicable Banks and Other Financial Institutions to Receive, Process, Honor and Pay Any and All Checks Drawn on Debtors’ Accounts for Such Purpose (“Employee Motion”), the Court granted the Debtors authorization to pay the balance of wages due and owing for all Shipboard Employees and Essential Crew Members for the month of September 2001, plus certain repatriation expense. To to extent that the Debtors paid any of (i) the Shipboard Employees and/or the Essential Crew Members wages for September 2001 and/or (ii) one (1) month severance to the Shipboard Employees, upon the Debtors providing the CAI Group with reasonable documentation (which shall include a receipt for such payment from such crew members) of such payment, then the CAI Group shall reimburse the Debtors within five (5) business days of written notice.
10. The CAI Group obligations to pay September 2001 wages and/or severance payments directly to Shipboard Employees and/or Essential Crew Members shall be subject to the CAI Group receiving a receipt and a release releasing any claims in rem against the relevant CAI Group Vessel, the Debtors and the relevant shipowner, CAI and their respective agents for the payment of such amount. The Debtors shall use their reasonable efforts to have the Shipboard Employees sign the receipts and releases, however, failure to obtain any such receipt or release is not a condition of performance by any of the parties to this agreement, including, but not limited to, the payment obligations of the CAI Group.
11. The CAI Group has requested that the Debtors not cancel the policies of insurance which are currently in force relating to the CAI Group Vessels (the “Insurance Policies”). The Debtors have agreed to forbear from canceling such Insurance Policies, provided that the CAI Group (i) pay to the Debtors a sum equal to the amounts which otherwise would be recoverable by the Debtors in respect of all such Insurance Policies if the Debtors canceled all such Insurance Policies effective as of the Effective Date of this Order, (ii) indemnifies and holds the Debtors harmless from and against all charges or claims for such Insurance Policies relating to the period from and after the Effective Date of this Order, and (iii) uses its reasonable efforts to properly obtain a written undertaking addressed to the Debtors by which the insurers and brokers relating to such Insurance Policies acknowledge and agree that they will look solely to CAI Group (and not to the Debtors) for all amounts due in respect of all such Insurance Policies for the period from and after the Effective Date of this Order. The risk of loss to any CAI Group Vessels shall pass to the CAI Group as of the Effective Date of this Order.
12. The CAI Group shall be responsible for all re-bunkering expense, including fuel and other costs, for all CAI Group Vessels, from and after the Effective Date of this Order.
13. The CAI Group shall be responsible for paying the cost of provisions for all crew remaining on the CAI Group Vessels from and after the Effective Date of this Order.
14. Certain cash belonging to the Debtors is on board the CAI Group Vessels. In the event the CAI Group ever obtains an interest in such cash, or any portion of it, the CAI Group shall promptly transfer such interest to the Debtors. The CAI Group shall have no responsibility to seek to obtain any interest in such cash. As to the R Five, R Six, and the R Eight Vessels (collectively, the “At Sea CAI Group Vessels”), CAI Group shall, not with standing entry of this Order, cooperate with the Debtors so as to facilitate the Debtors obtaining possession of the cash on board the At Sea CAI Group Vessels as soon as reasonably practicable after the Effective Date of this Order and prior to arrival at their next port of call.
15. The CAI Group and the Debtors shall at the time of the entry of this Order issue joint instructions to the Captains of each CAI Group Vessel to carry out the provisions of this Order.
16. This agreement is subject to only two (2) conditions, which conditions are that the Debtors and Captains of the CAI Group Vessels shall confirm to the CAI Group that (a) as of the time of the entry of this Order that no casualty has occurred to the CAI Group Vessels; and (b) that the At Sea CAI Group Vessels represented by the Debtors to beat sea, were still at sea and were not under arrest as of the time of the entry of this Order.
17. As of the Effective Date of this Order, the CAI Group shall be responsible for all on-going wages of all Shipboard Employees and Essential Crew Members; provided, however, the foregoing shall not result in the CM Group being liable for duplicative payments to any crew members for payments made by the Debtors or by the CAI Group on behalf of the Debtors.
18. Debtors hereby represent and warrant to the CAI Group That all wages and benefits payable to the Shipboard Employees and Essential Crew Members for all periods through and including August 31, 2001 have been paid in full.
19. Except in the event of (i) a breach of the Debtors’ representations and warranties contained in paragraph 18 hereof, and (ii) the Debtors’ fraudulent acts with respect to the matters set forth herein (each a”Debtors Breach”), the financial undertakings of the CAI Group, as set forth in this Order, are not subject to any recoupment, set-offs, or any other theory of liability of any kind at law or equity that may or may not be available to them. Both the CAI Group and the Debtors shall retain any and all claims against each other, but in absence of a Debtors Breach, the CAI Group cannot use any existing claims or defenses to avoid performance and payment obligations set forth under the terms of their agreement, as incorporated in this Order.
20. The Debtors agree to cooperate, to the extent of their responsibility, to carry out the provisions of this Order, but in the absence of a Debtors Breach, such cooperative undertakings shall not give rise to any additional claim against the Debtors’ estates by the CAI Group.
21. The Court retains jurisdiction to enforce the terms of this Order, including, but not limited to the obligations of CAI Group, both financial and otherwise, to perform under the terms of this Order. As of the Effective Date of this Order, each of the Debtors and the CAI Group is required to perform their respective obligations under the terms of this Order, but this Court shall not otherwise retain any further authority over the CAI Group Vessels as of the Effective Date of this Order.
22. Each of the Debtors and the CAI Group is authorized and directed to execute and deliver any and all such further instruments and documents and to take all such further actions as may be reasonably required to effectuate the terms and conditions of this Order.