Case No. 02-13533 (AJG) (Jointly Administered).United States Bankruptcy Court, S.D. New York.
March 29, 2005
James H. Lister, Esq., McGUIREWOODS LLP, McLean, VA, Attorneys for Iowa Network Services, Inc.
Alfredo R. Perez, Esq., WEIL, GOTSHAL MANGES LLP, Houston, TX, Attorneys for the Reorganized Debtors.
STIPULATION AND AGREED ORDER RESOLVING MOTION TO COMPEL PAYMENT OF CURE CLAIM OF IOWA NETWORK SERVICES, INC.
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 Iowa Network Services, Inc. (“INS,” 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”). On April 20, 2004, the Plan became effective in
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accordance with its terms, and pursuant to the Plan, WorldCom, Inc. merged with and into MCI, Inc. with MCI, Inc. being the survivor;
WHEREAS, on or about August 18, 2003, the Debtors filed Schedule 8.01(a) to the Plan (the “Plan Supplement”) indicating their intent to reject certain executory contracts, including the service orders for two circuits ordered by MCI from INS, circuits HFGS 3069 and 3231 (“Service Orders HFGS 3069 and 3231”). In response thereto, on September 2, 2003, INS filed an objection to the Plan Supplement (the “Objection”) and, on October 14, 2003, the Court approved a stipulation among the Debtors and INS which resolved the Objection and expressly reserved INS’s position in respect of the rejection of Service Orders HFGS 3069 and 3231, which is now being resolved pursuant to this Stipulation.
WHEREAS, on or about November 6, 2003, INS filed a proof of claim (Claim No. 36472) against the Debtors (the “INS Claim”). The INS Claim asserted an unsecured rejection damage claim against the Debtors for early termination liabilities arising under service orders HFGS 3069 and 3231 in the amount of $121,885.80, but INS reserved the right to assert that such liability relating to Service Orders HFGS 3069 and 3231 is entitled to administrative priority status, as described more fully in the INS Claim;
WHEREAS, on October 25, 2004, the Reorganized Debtors filed their Seventy-First Omnibus Objection to Proofs of Claim (Docket No. 13230) (the “Claims Objection”) seeking to disallow and expunge the INS Claim;
WHEREAS, on October 18, 2004, INS filed its Motion for Order Compelling Payment of Cure Claim of Iowa Network Services (the “Motion”) in which INS asserted an administrative priority claim against the Debtors for early termination liabilities arising under Service Order HFGS 3069 and 3231; and
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WHEREAS, the Parties have agreed to resolve issues in respect to damages relating to alleged early termination liability (as set forth in the Motion and Proof of Claim No. 36472) under Service Orders HFGS 3069 and 3231 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 INS as follows:
1. The Parties agree that, in full settlement and satisfaction of all claims and rights asserted in the Motion, the Objection, the Claims Objection, Proof of Claim No. 36472 or otherwise arising or relating to Service Orders HFGS 3069 and 3231 (but excluding any amounts owing under Service Orders HFGS 3069 and 3231 for service rendered prior to the Commencement Date), the Reorganized Debtors shall make payment to INS in the amount of $37,383.30 on or before 30 days after entry of this Stipulation by the Court. Other than the resolution of the claims set forth in the Motion and Proof of Claim No. 36472 (and as such claims may have been also been asserted in the Objection), nothing herein shall affect any Parties’ rights in respect to any other rights or claims, including the appropriate classification of any such claims arising under executory contracts or unexpired leases among the Parties provided that all claims for damages relating to alleged early termination liability under Service Orders HFGS 3069 and 3231 are resolved by this Stipulation.
2. 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.
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3. 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. The Reorganized Debtors shall promptly take all steps necessary to obtain Bankruptcy Court approval of this Stipulation.
4. The Reorganized Debtors and INS 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, INS warrants and represents that it owns Proof of Claim No. 36472 and that it has not assigned, transferred, conveyed, or in any way encumbered any claims identified in such proof of claim.
5. 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.
6. The Bankruptcy Court shall retain jurisdiction over all matters or disputes under this Stipulation.
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IT IS SO ORDERED.