Case No. 02-B-48191, (Jointly Administered)United States Bankruptcy Court, N.D. Illinois.
January 16, 2003
KIRKLAND ELLIS LLP, James H.M. Sprayregen, Marc Kieselatein, David R. Seligman, Chicago, Illinois, Counsel for, the Debtors in Possession
MAYER, BROWN, ROWE MAW, LLP, Jonathan Kron, Aaron L. Hammer, Chicago, IL, Counsel for, Philip Morris Capital Corp. and General Foods Credit Corp.
STIPULATION AND AGREED ORDER REGARDING PROOF OF CLAIM NUMBERS 37973 AND 37974
EUGENE WEDOFF, Bankruptcy Judge
WHEREAS, Wilmington Trust Company (the “Owner Trustee”) is the Owner Trustee in respect of the leveraged lease transaction (the “Leveraged Lease Transaction”) relating to those certain Boeing 757-222 aircraft Registration Nos. N551UA, N552UA, N553UA and N554UA (and the engines related thereto) (the “Four Aircraft”);
WHEREAS, U.S. Bank National Association, as successor to or as agent for State Street Bank and Trust Company of Connecticut, National Association and State Street Bank and Trust Company (“US Bank”) is the mortgagee or indenture trustee (the “Indenture Trustee”) in respect of the Leveraged Lease Transaction relating to the Four Aircraft;
WHEREAS, Philip Morris Capital Corporation (“PMCC”). successor to PK AirFinancc US, Inc., holds all of the loan certificates (the “Loan Certificates”) issued pursuant to that certain Trust Indenture and Mortgage dated as of March 1, 1992 (the “Indenture”) in connection with the Leveraged Lease Transaction;
WHEREAS, PMCC, as holder of the Loan Certificates, is the sole loan participant under the Leveraged Lease Transaction;
Page 2
WHEREAS, General Foods Credit Corporation (“GFCC”). as owner participant, holds the sole beneficial interests in those common law trusts, which is the owner of the Four Aircraft;
WHEREAS, UAL Corporation (“UAL”) issued unconditional guaranties of the obligations of United Airlines, Inc, (“United”), as lessee, under the Leveraged Lease Transaction in favor of, among others, GFCC and the Owner Trustee (the “Guaranties”);
WHEREAS, the Owner Trustee, assigned certain of its rights under the Guaranties to the Indenture Trustee, for the benefit of PMCC, as sole loan participant, as fully set forth in the operative documents governing the Leveraged Lease Transaction (the “Operative Documents”);
WHEREAS, United established May 12, 2003 as the claims bar data pursuant to that certain Order Pursuant to Sections 105(a), 501, 502 and 1111(a) of the Bankruptcy Code and Bankruptcy Rules 2002(a)(7), 30Q3(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 by the Bankruptcy Court on February 27, 2003;
WHEREAS, US Bank, as Indenture Trustee, timely filed proof of claim number 35485 in United’s chapter 11 bankruptcy case asserting various rights and for amounts it claims are due and owing by United to US Bank, as Indenture Trustee, and PMCC, as the sole loan participant, under the Leveraged Lease Transaction;
WHEREAS, Wilmington Trust Company, as Owner Trustee, timely filed proof of claim number 34267 (the “Master Proof of Claim”) in United’s chapter 11 bankruptcy case asserting various rights and for amounts it claims are due and owing by United to Wilmington
Page 3
Trust Company, as Owner Trustee in certain transactions and as Indenture Trustee in certain transactions, including claims for the Leveraged Lease Transaction;
WHEREAS, the Owner Trustee timely filed proofs of claim numbers 37973 and 37974 (the “Individual Proofs of Claim”) in United’s chapter 11 bankruptcy case asserting various rights and for amounts it claims arc due and owing by United to Wilmington Trust Company, as Owner Trustee, and GFCC, as owner participant, including claims for the Leveraged Lease Transaction;
WHEREAS, the Owner Trustee acknowledges that the Master Proof of Claim and the Individual Proofs of Claim are duplicative to the extent the Master Proof of Claim asserts claims with respect to the Leverage Lease Transaction and the Four Aircraft; and
WHEREAS, United seeks to reduce the number of claims asserted against it by expunging what it contends are duplicate claims.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and between the undersigned parties that:
1. The Individual Proofs of Claim shall be expunged in accordance with the terms and conditions of paragraphs 3 and 4 herein.
2. The Master Proof of Claim shall be expunged in accordance with the terms and conditions of paragraphs 3 and 4 herein.
3. Any claims, causes of action, rights or remedies that the Owner Trustee, for its own benefit and not for the benefit of GFCC as owner participant, may have against United or UAL under or in connection with the Leveraged Lease Transaction (as such Leveraged Lease Transaction may be restructured, amended or modified) and under applicable law, may be asserted by the Indenture Trustee, including, without limitation, all such claims that the Owner
Page 4
Trustee may have directly against United or against UAL under the Guaranties or the Operative Documents for, among other things, the indemnities for its own benefit and not for the benefit of GFCC, as owner participant (which may include fees and expenses) set forth in the Operative Documents; provided, that notwithstanding anything contained herein, United and UAL reserve any and all claims, rights, defenses, counterclaims or actions in respect of any proof of claim or claim asserted by the Indenture Trustee for the benefit of the Owner Trustee, in such capacity, and nothing contained herein shall be deemed a waiver thereof by United. UAL or any other party in interest;provided, further that except as otherwise specifically provided herein, the Owner Trustee, in such capacity, reserves any and all claims, rights, defenses, counterclaims or actions it may have against United or against UAL under the Guaranties or the Operative Documents, it being understood that such claims, rights, defenses, counterclaims or actions shall be brought by US Bank, as Indenture Trustee, for the benefit of the Owner Trustee, and nothing contained herein shall be deemed a waiver thereof by the Indenture Trustee or the Owner Trustee.
4. United and UAL will not challenge the standing of: the Indenture Trustee to assert on behalf of the Owner Trustee (in such capacity as described in paragraph 3 herein) any claims, causes of action, rights or remedies that the Owner Trustee may have against United or UAL, arising under or in connection with the Leveraged Lease Transaction for the Four Aircraft (as such Leveraged Lease Transaction may be restructured, amended or modified) or under applicable law, and the Indenture Trustee on behalf of the Owner Trustee will be entitled to prosecute all such claims, causes of action, rights or remedies, regardless of whether or not the Master Proof of Claim is expunged, reduced, modified or amended;provided, that notwithstanding anything contained herein, United and UAL reserve any and all claims, rights,
Page 5
defenses, counterclaims or actions in respect of any proof of claim or claim asserted by the Owner Trustee or the Indenture Trustee on behalf of the Owner Trustee and nothing contained herein shall be deemed a waiver thereof by United, UAL or any other party in interest.
5. Each of US Bank, GFCC, PMCC and the Owner Trustee expressly preserve the right to amend, update, modify, supplement or otherwise revise any proof of claim filed by US Bank, PMCC, GFCC or the Owner Trustee against United, UAL or any other debtor in these cases with respect to the Leveraged Lease Transaction, including the right to file amended or supplemental claims to set forth additional damages and/or additional information concerning their damages, in the event that any of the Leveraged Lease Transaction is rejected by United or any other debtor pursuant to a plan or an order of the Court. This Stipulation and Order is filed without prejudice to the filing by any of US Bank, GFCC, PMCC or the Owner Trustee of additional proofs of claim with respect to any other liability or indebtedness of UAL, United or any other debtor. Notwithstanding the foregoing, (i) United and UAL reserve all rights to challenge and oppose the assertion of any such amended, updated, modified, supplemented, revised or additional-filed proofs of claim; and (ii) in view of the fact that the Master Proof of Claim and the Individual Proofs of Claim are being expunged pursuant to the terms of this Stipulation and Order and to reduce the risk of future-asserted duplicate claims for the Four Aircraft, the Indenture Trustee, the Owner Trustee, PMCC and GFCC each agree any such amended, updated, modified, supplemented, revised or additional-filed proofs of claim will be filed only by and through Indenture Trustee consistent with the terms and conditions set forth in this Stipulation and Order.
6. In the event that any party challenges the standing of the Indenture Trustee on behalf of the Owner Trustee in its capacity to proceed as set forth in paragraphs 3 and 4 herein,
Page 6
and as a result of such challenge, a court of competent jurisdiction determines that paragraphs 3 or 4 are unenforceable, then any of GFCC, PMCC, the Owner Trustee or the Indenture Trustee shall not be bound by the terms of paragraph 5(ii) and shall be entitled to file amended, updated, modified, supplemented or revised proofs of claim as appropriate with any rights of UAL and United to challenge or oppose such amended, updated, modified, supplemented or revised proofs of claim expressly preserved except for any challenge based on expiration of the May 12, 2003 Bar Date or expungement of any claims pursuant to this Stipulation and Order.
7. Each undersigned counsel represents that he/she is authorized to execute this Stipulation on behalf of his/her respective client.
8. 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.
9. This Stipulation may not be modified, altered, amended or vacated without the written consent of all parties hereto.
10. This Bankruptcy Court shall retain jurisdiction to resolve any disputes pr 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.
11. 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.
Page 7
IT IS SO ORDERED.