Case No. 04-13819 Jointly Administered.United States Bankruptcy Court, E.D. Virginia, Alexandria Division.
January 27, 2005
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., Michael J. Canning, Esq., Mara V.J. Senn, Esq., ARNOLD PORTER LLP, Denver, Colorado. and Washington, DC, and New York, New York, Counsel to the Debtors and Debtors-in-Possession.
ORDER PURSUANT TO SECTIONS 363 AND 365(a) OF THE BANKRUPTCY CODE AUTHORIZING THE ASSUMPTION OF THAT CERTAIN MERCHANT SERVICES AGREEMENT, AS MODIFIED, WITH DISCOVER FINANCIAL SERVICES, INC.
STEPHEN MITCHELL, Bankruptcy Judge
Upon the Motion (the “Motion”)[1] of the Debtors requesting entry of an order pursuant to sections 363 and 365(a) of the Bankruptcy Code authorizing the Debtors to assume, subject to the modifications described in the Motion, that certain Merchant Services Agreement, as previously amended and further modified by the Sixth Amendment and Modification to Merchant
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Services Agreement (as modified, the “Assumed Agreement”), with Discover Financial Services, Inc. (“DFS”) under which the Debtors permit Discover Card holders to use their Discover Cards to purchase airline tickets and other travel-related services; the Court finds that (i) it has jurisdiction over the matters raised in the Motion pursuant to 28 U.S.C. §§ 157 and 1334; (ii) this is a core proceeding pursuant to 28 U.S.C. § 157(b)(d); (iii) the relief requested in the Motion is in the best interests of the Debtors, their estates and their creditors; (iv) proper and adequate notice of the Motion and the hearing thereon has been given and that no other or further notice is necessary; and (v) upon the record herein, including the consent of DFS to the relief requested herein, after due deliberation thereon good and sufficient cause exists for the granting of the relief as set forth herein,
IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1. The Motion is GRANTED.
2. The Debtors’ business judgment to assume and ratify the Assumed Agreement is reasonable and appropriate, and the assumption and ratification of the Assumed Agreement is in the best interest of the Debtors’ estates and their creditors.
3. The assumption and ratification of the Assumed Agreement is hereby approved, the Assumed Agreement is hereby assumed, and any and all pre-petition and post-petition transfers made pursuant to the Assumed Agreement prior to the date hereof are hereby ratified and not subject to avoidance; provided that in the event that Debtors fail to achieve a successful reorganization in these cases, Debtors may terminate the Assumed Agreement upon written notice to DFS. In the event of such termination, under no circumstances shall DFS have a claim with administrative priority against Debtors for breach of contract as a direct result of such termination. The foregoing sentence is not intended to limit in any way any administrative
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claims or other rights or remedies available to DFS at law or in equity arising out of or relating to transactions with Discover Card holders under the Assumed Agreement, including without limitation, any charge back rights or credits arising out of or relating to Debtors’ failure to honor tickets purchased with the Discover Card, nor is it intended to limit any secured claim or unsecured claim without administrative priority that DFS may have.
4. The Debtors are authorized to take any and all actions necessary or desirable to perform the Debtors’ obligations and the transactions contemplated under the Assumed Agreement.