Jointly Administered Under Case No. BK-N-01-31627-GWZ.United States Bankruptcy Court, D. Nevada.
May 2, 2005
WINSTON STRAWN LLP, PATRICK A. MURPHY, TODD J. DRESSEL, San Francisco, CA, McDONALD CARANO WILSON LLP, SYLVIA HARRISON, Reno, NV, Attorneys for PLAN COMMITTEE.
DAVID E. O’MEILIA, United States Attorney, PHIL PINNELL, Assistant United States Attorney, Tulsa, OK.
MICHAEL F. HERTZ, POLLY A. DAMMANN, PATRICE A. SHELBURNE, Washington, DC, Counsel to the UNITED STATES OF AMERICA.
Jennifer A. Smith, Esq., Reno, Nevada, Counsel to the REORGANIZED DEBTORS.
McKINNEY STRINGER, Kenneth McKinney, Esq., Corporate Tower, Oklahoma City, OK, Counsel to the David A. Lovelace, Billy D. Freeman, David Buzzard, Ernest Freeman, Jr., Terry N. Garner, Robert D. Vickers and William M. Kirby.
STIPULATED ORDER REGARDING CLAIMS OF THE UNITED STATES OF AMERICA, DAVID A. LOVELACE, BILLY D. FREEMAN, DAVID BUZZARD, ERNEST FREEMAN, JR., TERRY N. GARNER, ROBERT D. VICKERS AND WILLIAM M. KIRBY (CLAIM NOS. 4571, 4572, 4579, 14722 AND 14916).
GREGG ZIVE, Chief Judge, Bankruptcy
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The Plan Committee (the “Committee”) in these Chapter 11 bankruptcy cases (the “Cases”) of Washington Group International, Inc. et al. (the “Reorganized Debtors” or “WGI”); WGI; the United States of America (the “United States”); and David A. Lovelace, Billy D. Freeman, David Buzzard, Ernest Freeman, Jr., Terry N. Garner, Robert D. Vickers and William M. Kirby (the “Relators,”), hereby stipulate and agree as follows:
1. WGI entered into a contract (No. DACA56-94-D-0021) with the U.S. Army Corps of Engineers (the “Contract”).
2. On or about January 3, 2001, Relators filed their First Amended Complaint in the United States District Court for the Northern District of Oklahoma on behalf of the United States against WGI, United States ex rel. Lovelace et al. v. WashingtonGroup International, Inc., formerly Morrison Knudsen Corp.,No. 00-CV-61-B (M) (N.D. Okla.) (the “Qui Tam Action”), which includes, among other claims, allegations brought by Relators David A. Lovelace and Billy D. Freeman of retaliation under 31 U.S.C. § 3730(h) and wrongful discharge under state common law (the “Retaliation Claims”), and seeking damages for the Relators’ attorneys fees’ available under the False Claims Act (the “FCA”)31 U.S.C. § 3730(d) (collectively, the “Relators’ Claims”).
3. On May 14, 2001 (the “Petition Date”), WGI filed for protection under Chapter 11 of Title 11 of the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq., in the United States Bankruptcy Court for the District of Nevada (the “Bankruptcy Court”), Case No. BK-N-01-31627.
4. On August 23, 2001, Relators filed Claim No. 4579 in the Bankruptcy Court regarding the allegations of the Qui Tam
Action, and Relators David A. Lovelace and Billy D. Freeman filed Claim Nos. 4571 and 4572 respectively regarding the allegations of the Qui Tam Action and the Retaliation Claims.
5. On November 8, 2001, the United States filed Claim No. 14916 (and on November 12, 2001, Claim No. 14722) in the Bankruptcy Court with respect to the Qui Tam Action, asserting that the United States is the true party in interest with respect to all claims
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asserted by Relators in the Qui Tam Action other than the Relators’ Claims (the “United States’ Claims,” and, together with Relators’ Claims, the “Qui Tam Action Claims”).
6. On December 21, 2001, the Bankruptcy Court entered an order (the “Confirmation Order”) approving WGI’s Second Amended Joint Plan of Reorganization, as Modified (the “Plan”) which provides for the treatment of certain claims pending or filed prior to the Petition Date including the Qui Tam Action Claims.
7. WGI denies any and all of the allegations of the Qui Tam
Action and Qui Tam Action Claims and denies any wrongdoing or liability in connection with the facts underlying the Qui Tam
Action and further denies that the alleged conduct of WGI or its predecessor or the alleged conduct of the directors, officers, employees, or agents of WGI caused any damages to the United States or Relators and further denies that its conduct violated or breached any statute, regulation, the Contract, or forms the basis for liability under any theory.
8. The Parties are currently negotiating a settlement to resolve the Qui Tam Action Claims, which agreement must be approved by all Parties, including the appropriate government officials, and executed by all Parties (“Proposed Settlement Agreement”), and then submitted to the Bankruptcy Court for approval. Currently, the Proposed Settlement Agreement provides in part that Relators’ Claims will be resolved via Claim No. 4571 as an Allowed Class 7 Claim in the amount of $2,500,000.00, and upon WGI’s performance of its obligations under the Proposed Settlement Agreement, the remaining Qui Tam Action Claims will be disallowed.
NOW, THEREFORE, in accordance with the foregoing, and intending to be legally bound, the Parties hereto, by and through their undersigned counsel, do hereby agree and stipulate as follows:
A. Upon entry of this Stipulated Order, Claim No. 4571 shall be allowed as a general unsecured claim in the amount of $2,500,000.00. Any distribution, as provided for in the Confirmation Order and the Plan, on account of Claim No. 4571 shall be held by the Committee until final approval of the Proposed Settlement Agreement by the Bankruptcy Court and th Qui Tam Action has been dismissed as to be set forth in the Proposed Settlement Agreement, and thereafter paid to the persons designated by Relators.
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B. Within five (5) days after the latter of final approval by the Bankruptcy Court of the Proposed Settlement Agreement or dismissal of the Qui Tam Action as to be set forth in the Proposed Settlement Agreement, the Committee shall release any available distribution on account of Claim No. 4571 in accordance with the Confirmation Order and Plan, and upon receipt of the distribution on account of Claim 4571 as allocated by Relators, Claim Nos. 4572, 4579, 14722 and 14916 shall be disallowed.
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C. Nothing contained in this Stipulated Order shall constitute, or be introduced, treated, deemed or otherwise interpreted or construed, as an admission, evidence or concession by the parties hereto of any fact, liability or wrongdoing.
D. In the event that either the Proposed Settlement Agreement is not approved by all Parties, including the appropriate government officials, and executed by all Parties, and then approved by the Bankruptcy Court, or the Qui Tam Action is not dismissed as to be set forth in the Proposed Settlement Agreement, this Stipulated Order is void.
STIPULATED AND AGREED.
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