Case Number 02-B-48191 (Jointly Administered)United States Bankruptcy Court, N.D. Illinois.
March 1, 2004
James H. M. Sprayregen, P.C., Mare Kieselstein, David R. Seligman, KIRKLAND ELLIS, Chicago, Illinois, for Debtors and Debtors In Possession
Henry J. Riordan, U.S. Department of Justice, Washington, D.C., for Creditor United States of America, Department of The Treasury, Internal Revenue Service
STIPULATION AND AGREED ORDER PERMITTING THE INTERNAL REVENUE SERVICE TO FILE CONSOLIDATED INCOME TAX CLAIMS UNDER ONE CASE NUMBER
EUGENE WEDOFF, Bankruptcy Judge
The debtor UAL Corporation and its 27 debtor subsidiaries (collectively, the “Debtors”) and the creditor Department of the Treasury, Internal Revenue Service, a governmental unit of the United States of America (the “IRS”), have agreed that the IRS may file a consolidated proof of claim under 11 U.S.C. § 501 for consolidated return years and that such proof of claim shall be deemed to have been filed in each of the Debtors’ Chapter 11 cases, on the terms and conditions set forth below:
Recitals
A. On December 9, 2002, the Debtors filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code and continue to operate their businesses and manage their properties as debtors and debtors in possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code (the Debtors’ “Chapter 11 Cases”), Pursuant to an order of the Court entered on December 11, 2002 [Docket Entry No. 232], the Debtors’ Chapter 11 Cases have been consolidated for procedural purposes only and are being administered under Case No. 02-B-48191,
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B. On February 27, 2003, the Court entered an order (the “Bar Date Order”)[Docket Entry No. 1608] fixing, inter alia, June 9, 2003, as the deadline For government units to file proofs of claim in the Debtors’ Chapter 11 Cases. The Bar Date Order and the notice of the bar date (the “Notice of Claims Bar Date”) [Docket Entry No. 1815] distributed by the Debtors specifically require that a claimant with claims against more that one of the Debtors file a separate proof of claim in the case of each Debtor against whom that claimant asserts a claim,
C. In addition to certain supplemental proofs of claim which are not the subject of, and shall not be affected by, this Stipulation.[1] the TRS concluded that it was required to file in more that one of the Debtors’ Chapter 11 Cases a proof of claim in the amount of $98,928,769.03 for federal income taxes (the “Corporate Income Tax Claim”). The IRS based its conclusion upon the fact that UAL Corporation is the common parent corporation for consolidated return years and each member of the group is severally liable for the taxes pursuant to Treas. Reg. § 1,1502-6 (26 C.F.R.). As a result, the IRS filed identical proofs of claim regarding the Corporate Income Tax Claim in each of the Debtors’ Chapter 11 Cases. During the claims analysis and objection process of the Debtors’ Chapter 11 Cases, the multiple IRS proofs of claim will impose a significant administrative burden on the Debtors, the IRS, the Court and the Debtors’ claims agent.
Agreement
1, Notwithstanding anything to the contrary set forth in the Bar Date Order, Notice of Claims Bar Date, the Federal Rules of Bankruptcy Procedure, the Local Rules of the United States Bankruptcy Court for the Northern District of Illinois, or the Bankruptcy Code that would
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otherwise require the IRS to file separate proofs of claim under 11 U.S.C. § 501 against more that one of the Debtors on account of each claim against the Debtors, it is specifically agreed that the IRS may file a consolidated proof of claim for consolidated return years against the debtor UAL Corporation in the Debtors’ Chapter 11 Case No. 02-B-48191 and such proof of claim, including any amendments thereof, shall be deemed to constitute the filing of identical claims in each of the Debtors’ Chapter 11 Cases. In addition, the IRS’ Claim No. 42471 in the Debtors’ Chapter 11 Case No. 02-B-48I91 shall be deemed to be the surviving consolidated IRS proof of claim for the Corporate Income Tax Claim, and the separate proofs of claim filed in each of the Debtors’ other Chapter 11 cases (listed on Exhibit A, attached hereto and made a part hereof) shall be deemed amended and superseded by the consolidated proof of claim (Claim No. 42471), and shall be so reflected in the official claims register, The Debtors acknowledge that each of the amended and superseded proofs of claim filed on or before the Bar Date shall be deemed timely filed for all purposes under the Bar Date Order and Notice of Claims Bar Dale.
2. This Stipulation is intended solely for the purpose of administrative convenience and, except to the extent expressly set forth herein, shall not affect the substantive rights of the Debtors, the IRS or any other party in interest.
IT IS SO ORDERED.