Case No. 02-B-48191 (Jointly Administered)United States Bankruptcy Court, N.D. Illinois
February 12, 2004
KIRKLAND ELLIS LLP, James H.M Sprayregen, P.C, Marc Kieselstein, Esq., David R., Seligman, Esq., Chicago, Illinois, for the Debtors and Debtors in Possession
MILBANK, TWEED, HADLEY McCLOY LLP, Wilbur F, Foster, Jr., New York, New York, for Kreditanstalt für Wiederaufbau
STIPULATION AND AGREED ORDER BETWEEN UNITED AIR LINES, INC, AND KREDITANSTALT FUtilde;R WIEDERAUFBAU REGARDING CLAIM NUMBER 032891
EUGENE WEDOFF, Bankruptcy Judge
WHEREAS, on December 9, 2002, United Air Lines, Inc. (“UAL”), one of the debtors and debtors in possession in the above-captioned cases, filed a voluntary petition in this Court (the “Bankruptcy Court”) for reorganization relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. § 101-1330 (as amended, the “Bankruptcy Code”): and
WHEREAS, on or about May 7, 2003, Kreditanstalt für Wiederaufbau (“KfW”) timely filed a proof of claim against UAL in an unliquidated amount of at least $290, 879,364,12, which was designated claim number 032891 (“Claim No. 032891”) in UAL’s chapter 11 case; and
WHEREAS, UAL and KfW (each, a “Party.” and collectively, the “Parties”) have agreed to resolve any and all matters relating to Claim No. 032891 on the terms herein to avoid the costs and uncertainties of litigation; and
WHEREAS, the terms and provisions of this Stipulation and Agreed Order have been negotiated at aims’ length and have been agreed to by the Parties in good faith.
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NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein in an effort to avoid unnecessary expenses and litigation and with the intent to be legally bound, it is agreed between the undersigned as follows:
1. As of the Effective Date (as denned below) of this Stipulation and Agreed Order, Claim No. 032891 shall be (a) liquidated in the amount of $67,800,000[1] and (b) allowed in such amount, without reduction, setoff, recoupment, counterclaim or avoidance action, as a general unsecured claim (the “Allowed Claim”) without priority for all purposes in the above-captioned cases, including under the terms of any plan of reorganization of UAL confirmed by the Bankruptcy Court.
2. In addition to the Allowed Claim, KfW may assert (a) an administrative expense claim under section 503 of the Bankruptcy Code and (b) a general unsecured claim without priority (collectively, the “Additional Claims”), provided that KfW may assert such Additional Claims solely in accordance with the conditions and subject to the terms and limitations set forth in that certain term sheet entered into between UAL and KfW (the “Term Sheet”), dated June 30, 2003, filed under seal with the Bankruptcy Court [Docket No. 3600], and approved by the Bankruptcy Court in accordance with the 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 [Docket
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No. 3810] which Additional Claims shall be deemed to be timely filed if filed in accordance with the terms of the Terra Sheet.
3. The Parties reserve all of their other rights and remedies in the above-captioned cases, including, but not limited to, UAL’s right to object to the amounts of the Additional Claims in accordance with and subject to the terms and limitations set forth in the Terra Sheet.
4. No provision of this Stipulation and Agreed Order may be changed except by a written instrument executed by the Parties.
5. The Parties hereto represent and warrant to each other that: (i) the signatories to this Stipulation and Agreed Order are authorized to execute this Stipulation and Agreed Order; (ii) subject to Bankruptcy Court approval, each has full power and authority to enter into this Stipulation and Agreed Order; and (iii) this Stipulation and Agreed Order is duly executed and delivered, and constitutes a valid, binding agreement in accordance with its terms. KfW represents and warrants to UAL that it is the holder of Claim No. 032891 and has not assigned or transferred any interest therein to any other entity.
6. Except as set forth in the Term Sheet, this Stipulation and Agreed Order constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, written and oral, between the Parties with respect to the subject matter hereof. All representations, warranties, promises, inducements, or statements of intention made by the Parties with respect to the subject matter hereof are embodied in this Stipulation and Agreed Order, and neither UAL nor KfW shall be bound by, or liable for, any alleged representation,
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warranty, inducement, or statement of intention that is not expressly embodied herein,
7. The Parties additionally represent and agree that the terms and provisions of this Stipulation and Agreed Order shall not be construed against the Party that drafted this Stipulation and Agreed Order.
8. This Stipulation and Agreed Order (i) shall inure to the benefit of and be enforceable by the Parties hereto and their respective successors and permitted assigns and (ii) shall be binding upon and enforceable against the Parties hereto and their respective successors and assigns, including any trustee (whether under chapter 11 or chapter 7 of the Bankruptcy Code) that may be appointed in the above-captioned cases.
9. This Stipulation and Agreed Order is expressly subject to and contingent upon its approval by the Bankruptcy Court. The effective date of this Stipulation and Agreed Order shall be the business day following the date upon which this Stipulation and Agreed Order is entered by the Bankruptcy Court and becomes a final, non-appealable order (the “Effective Date”).
10. If this Stipulation and Agreed Order is not approved by the Bankruptcy Court, this Stipulation and Agreed Order shall be of no further force and effect, and neither this Stipulation and Agreed Order nor any negotiations and writings in connection with this Stipulation and Agreed Order shall in any way be construed as or deemed to be evidence or an admission on behalf of UAL or KfW regarding any matter dealt with herein.
11. This Stipulation and Agreed Order may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the
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Parties and delivered to the other Party.
12. The Bankruptcy Court shall retain exclusive jurisdiction to interpret, implement, and enforce the provisions of this Stipulation and Agreed Order, and each of UAL and KfW hereby consents to the jurisdiction of the Bankruptcy Court in connection therewith.
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IN WITNESS WHEREOF, each of the Parties below has caused a counterpart of this Stipulation and Agreed Order to be executed and delivered by its duly authorized signatory as of the date written below.
SO ORDERED.