Case No. 02-13533 (AJG), Jointly Administered.United States Bankruptcy Court, S.D. New York.
May 24, 2005
Timothy W. Walsh, Esq. (TW 7409), DLA PIPER RUDNICK GRAY CARY, New York, NY and Eric B. Miller, Esq., Heather A. Klink, Esq., Matthew M. Bacsardi, Esq., DLA PIPER RUDNICK GRAY CARY, Baltimore, MD, Special Counsel to the Reorganized Debtors.
Luis Raul Leyva, Avantel, S.A., Carr. Libre Mexico-Toluca No. 5714, Col. Lomas de Memetla, C.P. 05330 Mexico, D.F. and Steven J. Reisman, Esq., David Bayrock, Esq., CURTIS, MALLET-PROVOST, COLT MOSLE LLP, New York, NY, Attorneys for Avantel, S.A.
STIPULATION AND AGREED ORDER RESOLVING THE REORGANIZED DEBTORS’ OBJECTION TO PROOF OF CLAIM FILED BY AVANTEL, S.A.
ARTHUR GONZALEZ, Bankruptcy Judge
MCI, Inc. and certain of its direct and indirect subsidiaries, each reorganized debtors in the above-captioned cases (collectively, the “Reorganized Debtors”) and Avantel, S.A. (“Avantel,” and together with the Reorganized Debtors, the “Parties”), respectfully submit this stipulation and agreed order (this “Stipulation”):
RECITALS
WHEREAS, on July 21, 2002 (the “Commencement Date”) and November 8, 2002, WorldCom, Inc. and certain of its direct and indirect subsidiaries (the “Debtors”) commenced cases under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). By Orders, dated July 22, 2002 and November 12, 2002, these chapter 11 cases were consolidated for procedural purposes. During the chapter 11 cases, the Debtors operated their businesses and managed their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code;
WHEREAS, on October 31, 2003, the Bankruptcy Court entered an order confirming the Debtors’ Modified Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Plan”);
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WHEREAS, on April 20, 2004, the Plan became effective in accordance with its terms, and pursuant to the Plan, WorldCom, Inc. merged with and into MCI, Inc. with MCI, Inc. being the survivor;
WHEREAS, Avantel filed proofs of claim numbers 27036, 27037, 27038, 27039, 27040, 27041, 27042, 27043, and 27044 against the Debtors in these chapter 11 cases (collectively, the “AvantelClaims”). Each of the Avantel Claims asserted an unsecured claim against the Debtors in the amount of $27,311,432 plus additional unliquidated amounts, as described more fully in the Avantel Claims;
WHEREAS, on September 8, 2004, the Reorganized Debtors filed their Twenty-Eighth Omnibus Objection to Proofs of Claim (Multiple Debtor Claims — Duplicate Claims — Redundant Claims) (Docket No. 12407) (the “Duplicate Claims Objection”) seeking to disallow and expunge all of the Avantel Claims except proof of claim number 27036 (the “Remaining Avantel Claim”) on the basis that such claims were duplicative or substantially similar, and thus redundant, in light of the substantive consolidation provisions of the Plan. By Order, dated October 19, 2004, the Bankruptcy Court expunged and disallowed each of the Avantel Claims, except for the Remaining Avantel Claim (Docket No. 1311);
WHEREAS, on October 14, 2004 the Reorganized Debtors filed their Objection to Proof of Claim Filed by Avantel, S.A. (Docket No. 12933) (the “Objection”), seeking to disallow and expunge the Remaining Avantel Claim on the ground that the claim is the subject of a pending settlement between the parties, as explained more fully in the Objection;
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WHEREAS, on or about February 22, 2005, the Parties executed a letter agreement and certain ancillary agreements thereto (collectively, the “Letter Agreement”) pursuant to which Avantel has released the claims asserted in the Avantel Claims; and
WHEREAS, the Parties have agreed to resolve the Objection in accordance with the terms set forth below.
STIPULATION AND AGREEMENT NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and between the Reorganized Debtors and Avantel as follows:
1. The Parties agree that the Objection shall be, and hereby is, GRANTED.
2. The Parties agree that the Remaining Avantel Claim (Claim No. 27036) and all other claims or proofs of claim filed by or on behalf of Avantel shall be, and hereby are, expunged and disallowed in their entirety.
3. Nothing in this Stipulation shall be deemed to constitute a waiver of the Parties’ rights under the Letter Agreement, and the Parties expressly reserve all such rights.
4. This Stipulation may be executed in any number of counterparts, and all such counterparts, taken together, shall be deemed to constitute one and the same instrument. This Stipulation may not be modified, except in a written instrument signed by each of the Parties hereto.
5. This Stipulation shall be binding on the Parties from the date of its execution, but is expressly subject to and contingent upon its approval by the Bankruptcy Court. If the Bankruptcy Court does not approve this Stipulation, this Stipulation shall be null and void;
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provided, however, that the failure of the Bankruptcy Court to approve this Stipulation shall not affect the Parties’ rights and obligations under the Letter Agreement.
6. This Stipulation shall be governed, in all respects, by the laws of the State of New York, irrespective of its choice of law rules.
7. The Reorganized Debtors and Avantel each represent that they are authorized and legally competent to execute this Stipulation and that this Stipulation shall be binding on and inure to the benefit of the Parties and to their successors, heirs, and assigns. Additionally, Avantel warrants and represents that it owns the claims and proofs of claim identified herein and that it has not assigned, transferred, conveyed, or in any way encumbered any such claim.
8. This Stipulation is the entire agreement between the Parties with respect to the subject matter of this Stipulation. All representations, warranties, inducements, and/or statements of intention made by the Parties are embodied in this Stipulation, and no party hereto relied upon, shall be bound by, or shall be liable for any alleged representation, warranty, inducement, or statement of intention that is not expressly set forth in this Stipulation.
9. The Bankruptcy Court shall retain jurisdiction over all matters or disputes under this Stipulation.
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IT IS SO ORDERED.
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