No. 399-02649United States Bankruptcy Court, M.D. Tennessee, Nashville Division
February 3, 2003
Paul G. Jennings, Beth A. Dunning, BASS, BERRY SIMS PLC., Nashville, TN, and John Win. Butler, Jr., George N. Panagakis, SKADDEN, ARPS, SLATE, MEAGHER FLOM (ILLINOIS), Chicago, IL, Attorneys for Debtors and Debtors-in-Possession.
Joseph A. Franco, Jr., FARAH AND FARAH, PA., Jacksonville, FL, Attorney for the Claimant.
AGREED ORDER BETWEEN DEBTORS AND JOSE BETHENCOURT TO MODIFY AUTOMATIC STAY
GEORGE C. PAINE II, United States Bankruptcy Judge
This Agreed Order is entered into and submitted to the Court in accordance with, and in implementation of, the procedures approved by the Court in the Order Approving (A) Uniform Personal Injury Claims Resolution Procedures, (B) Modification of the Automatic Stay with Respect to Such Personal Injury Claims, (C) the Form of Notice of the Procedures, and (D) the Appointment of a Mediator (the “Procedures Order”); and Jose Bethencourt (the “Claimant”) and Service Merchandise Company, Inc. (“Service Merchandise”) and 31 of its affiliates (the “Affiliate Debtors”), debtors and debtors-in-possession in the above-captioned cases (Service Merchandise and the Affiliate Debtors collectively, the “Debtors”) having agrued, as signified by the signatures of counsel below, to the express findings set forth below and to a modification of the automatic stay with respect to the action asserted by Claimant, on the terms and conditions set forth herein; and the Court being otherwise sufficiently advised,
IT IS HEREBY FOUND:
(a) On March 27, 1999 (the “Petition Date”), each of the Debtors filed voluntary petitions in this Court for reorganization relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. § 101, et seq., as amended (the “Bankruptcy Code”). The Debtors continue to manage their properties as debtors-in-possession pursuant to sections 1107(a) and 1108
of the Bankruptcy Code.
(b) Claimant seeks to establish and liquidate his action against the Debtors and third parties that has been asserted by Claimant b certain litigation (the “Litigation”) currently pending in the Fourth Judicial Circuit Court, in and for Duval County, Florida.
(c) On the Petition Date, all acts to proceed with and continue the Litigation were automatically stayed under 11 U.S.C. § 362(a) (the “Automatic Stay”).
(d) Nevertheless, Claimant commenced the litigation post-petition.
(e) The Claimant desires to pursue recovery from any third parties to satisfy any established liability, except to the extent otherwise provided for herein regarding his amount of allowed claim in these bankruptcy proceedings.
(f) The Claimant, on behalf of itself its heirs, representatives and assigns, has agreed to waive any and all claims it may have against the Debtors except as otherwise set forth herein. The Claimant expressly understand that he, his heirs, representatives and assigns, may seek satisfaction of any established liability only as set forth in this Order and that, in no event, will the Debtors, their assets or their estates be liable in any other way whatsoever with respect to any claim or liability asserted or determined.
(g) The Claimant acknowledges that he had an opportunity to consult with counsel concerning the waiver as expressly provided in this Order and acknowledge that, is agreeing to such waiver, they have not relied on any promises or representations by the Debtors or any party acting on behalf of the Debtors.
(g) The Claimant, on behalf of himself, his heirs, representatives and assigns, and the Debtors have agreed to modify the Automatic Stay solely on the terms set forth herein.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED:
1. The Automatic Stay with respect to the Litigation is hereby modified in accordance with the terms set forth in this Agreed Order.
2. The Automatic Stay is partially lifted to permit the Litigation to proceed and continue to a final judgment or settlement, to permit the Claimant to attempt to recover from third parties; provided that no proceedings in the Litigation, including, without limitation, response deadlines, oral argument or discovery, shall be scheduled for any date prior to ninety (90) days after entry of this order; and provided that the Claimant, and all persons acting on behalf of the Claimant shall use best efforts in proceeding with the Litigation, inducing, without limitation, scheduling discovery or other proceedings, so as not to interfere with the Debtors’ administration of these cases.
3. Except as expressly provided for herein, notwithstanding the partial lifting of the stay as set forth herein, the automatic stay remains in effect with respect to any and all actions to collect or enforce any claims against the Debtors or the Debtors’ estates, and any claim determined in the Litigation shall be enforceable and collectable, if at all, only from any third parties except for the allowed claim provided for below.
4. The Claimant shall have an allowed general prepetition unsecured claim in the amount of $10,000 against the Debtors in Case No. 399-02649 and a copy of this Order shall be docketed by the clerk of the Court in such case. This amount is a result of settlement and compromise and is not an admission of liability. Claimant shall have no other recovery from the Debtors except on account of this compromised claim amount.
5. Except as expressly provided for herein, notwithstanding any proof of claim filed, or to be filed, by or on behalf of the Claimant in these cases, and except as expressly provided herein, (i) the Claimant, on behalf of itself, its heirs, representatives and assigns, shall be and hereby are deemed to have waived, and the Debtors, their estates, successors, assigns, affiliates, officers, directors and employees are hereby released from, any and all rights, claims, actions, causes of action, suits, debts, obligations, liabilities, accounts, damages, defenses or demands whatsoever, known or unknown, of any nature that could be asserted by or on behalf of the Claimant, and (ii) any and all claims or liabilities asserted, or to be asserted, by or on behalf of the Claimant in these cases are hereby disallowed except as to third parties.
6. Notwithstanding anything in this Order, to the contrary, no waiver or release of claims granted hereunder shall be deemed to be a waiver or release of liability as against the Debtors, but rather a waiver, release and/or limitation only of any right to collect any such liability from the Debtors and/or to participate in any distribution of assets of the Debtors.
7. Nothing in this Order shall be deemed an admission of fact on the part of the Debtors with respect to any claim, liability or any facts alleged in the Litigation.
8. Nothing in this Order shall be deemed an agreement or acknowledgement by the Debtors to provide assistance or to cooperate with the Claimant or any other party in the efforts to prosecute or defend against the claim asserted in the Litigation except to the extent that the Debtors can be compelled to produce discovery and/or testimony in the Litigation.
9. Notwithstanding anything in this Order to the contrary, the automatic stay shall be reimposed and the partial lifting of the stay provided for herein shall be revoked immediately upon any party asserting any new, additional or modified claims or causes of action against any of the Debtors in the Litigation or otherwise related to the claim including by any third party.
10. This Court shall retain jurisdiction to hear any matters or disputes arising from or relating to this Order.