Case No. 02-B-48191 (Jointly Administered)United States Bankruptcy Court, N.D. Illinois.
November 21, 2003
James H-M. Sprayregen, P.C., KIRKLAND ELLIS LLP, Marc Kieselstein, David R. Seligman, Chicago, Illinois, Counsel for the Debtors in Possession
STIPULATION AND AGREED ORDER REGARDING PROOF OF CLAIM NUMBERS 33867 and 33872
EUGENE WEDOFF, Bankruptcy Judge
WHEREAS, The Mitsubishi Trust and Banking Corporation and Bayerische Landesbank (collectively, the “Lenders”) along with Sumitomo Mitsui Banking Corporation (formerly known as The Sumitomo Bank, Ltd., Chicago Branch) (“Sumitomo”), are the lenders pursuant to the Japanese leveraged lease transaction (the “JLL Transaction”) with respect to the aircraft having U.S. registration number N769UA (the “Aircraft”) embodied in that certain Participation Agreement (1995 777 E), dated as of June 28, 1995 (the “ParticipationAgreement”), among United Air Lines, Inc., a debtor and debtor in possession in the above-referenced bankruptcy proceeding (“United”), as lessee, NBB Chicago Lease Co., Inc. (the “Lessor”), as lessor, The Mitsubishi Trust and Banking Corporation and The Sumitomo Bank, as Initial Lenders, and Wells Fargo Bank Northwest, N.A. (the “Security Trustee”), as successor to First Security Bank of Utah, National Association, the original security trustee, and the related Operative Documents including the Lease Agreement, dated as of June 28, 1995 (the “Lease”), between the Lessor, as lessor, and Debtor, as Lessee. Unless otherwise specified herein, capitalized terms used herein but not defined herein have the meanings given to such terms in the Lease;
Page 2
WHEREAS, the Bankruptcy Court approved, among other things, a
term sheet (the “Term Sheet”) between United Airlines, Inc. (“United”). Lenders and Sumitomo governing the restructuring of the JLL Transaction pursuant to that certain Order pursuant to Sections 105(a), 362, 363, 365 and 1110 of the Bankruptcy Code and Bankruptcy Rules 4001 and 9019 Authorizing (I) Rejection of Certain Operative Aircraft Agreements; (II) Modification of the Automatic Stay; (III) Exercise of Certain Remedies Under Aircraft Financing Arrangements (IV) Settlement and Compromise of Certain Aircraft-Related Claims; and (V) Entry by United into Restructuring Transactions and Related Operative Agreements entered on October 27, 2003;
WHEREAS, Lenders and United have not yet entered into final documentation to restructure the JLL Transaction;
WHEREAS, Lenders and United have agreed to negotiate in good faith to determine the amounts of the claims Lenders will have against United in connection with restructuring the JLL Transaction;
WHEREAS, United established May 12, 2003 as the claims bar date (the “Bar Date”) pursuant to that certain Order Pursuant to Sections 105(a), 501, 502 and 1111(a) of the Bankruptcy Code and Bankruptcy Rules 2003(a)(7), 3003(c)(3) and 5005(a) Establishing a Bar Date for Filing Proofs of Claim and Proofs of Interest and Approving Form and Manner of Notice Thereof entered on February 27, 2003;
WHEREAS, the Lenders timely filed, respectively, proofs of claim designated as Claim Numbers 33867 and 33872 (the “LendersClaims”):
WHEREAS, upon information and belief. Security Trustee, as security trustee for the JLL Transaction, in conjunction with the Lenders Claims, timely filed a proof of claim on
Page 3
behalf of, among others, itself and the Lenders pursuant to the claim designated as Claim Number 33099 (the “Trustee Claim”); and
WHEREAS, United seeks to eliminate the duplicative claims asserted against it, but does not intend to divest Lenders of the Lenders* right to assert claims to which Lenders are entitled under the JLL Transaction (as such JLL Transaction may be restructured, amended or modified in accordance with the Term Sheet) and applicable law; and
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and between the undersigned parties (the “Stipulation”) that:
1. Upon Court approval of this Stipulation, and in resolution of the Debtors’ Fourth Omnibus Objection to Claims (Single Debtor Duplicate; Multiple Debtors Duplicate; Superseded; Aircraft Debt; Bondholder Redundant; Books and Records, Reclassify) dated October 22, 2003 (the “Claims Objection”), the Lenders Claims shall be amended to expunge the principal and interest component of the Lenders Claims and any other components of the Lenders Claims that are included in the Trustee Claim, but in any event solely to the extent that such claims are included in the Trustee Claim. Each of the other components of the Lenders Claims (including the contractual indemnification of Lenders for (a) each of their (and not the Security Trustee’s) attorneys’ fees, costs, expenses and disbursements, (b) certain contingent and/or unliquidated claims, and (c) applicable tax indemnities) (such portion of the Lenders Claims, the “Surviving Claims”) shall survive and remain outstanding against United and shall not be affected in any way by this Stipulation and/or the Claims Objection, provided, that each Lenders shall use its reasonable best efforts to coordinate with the Debtors and the Security Trustee and not to duplicate claims against United which it believes have been validly and adequately asserted by the Security Trustee.
Page 4
2. Notwithstanding anything contained herein, United reserves any and all claims, rights, defenses, counterclaims or actions in respect of any of the Surviving Claims and nothing contained herein shall be deemed a waiver thereof by United or any other party in interest; provided, further that except as otherwise specifically provided herein, Lenders reserve any and all claims, rights, defenses, counterclaims or actions it may have against United, and nothing contained herein shall be deemed a waiver thereof by Lenders or Security Trustee.
3. Each undersigned counsel represents that he/she is authorized to execute this Stipulation on behalf of his/her respective client,
4. This Stipulation may be executed in multiple counterparts, any of which may be transmitted by facsimile, and each of which shall be deemed an original, but all of which together shall constitute one and the same instrument,
5. This Stipulation may not be modified, altered, amended or vacated without the written consent of all parties hereto. With respect to each Lender, this Stipulation shall be effective with respect to it and its Claim upon such Lender’s execution of this Stipulation.
6. This Bankruptcy Court shall retain jurisdiction to resolve any disputes or controversies arising from or related to this Stipulation. Any motion or application brought before this Bankruptcy Court to resolve a dispute arising from or related to this Stipulation shall be brought on proper notice and in accordance with relevant Federal Rules of Bankruptcy Procedure and the local rules of the Bankruptcy Court.
Page 5
7. This Stipulation shall not be effective unless and until approved by the Bankruptcy Court. Upon approval hereof, this Stipulation shall inure to the benefit of and be binding upon the parties hereto as well as all creditors, administrative claimants and parties in interest and their successors and assigns.