Bankruptcy Court Order Between Cce And Enron

UNITED STATES BANKRUPTCY COURT THE SOUTHERN DISTRICT OF NEW YORK _________________________________________x In re : Chapter 11
: ENRON CORP., et al, : Case No. 01-16034 (AJG)
:
Debtors.: Jointly Administered _________________________________________x


ORDER PURSUANT TO SECTIONS 105, 363, AND 1146 OF THE
BANKRUPTCY CODE, BANKRUPTCY RULES 2002, 6004, 9013, AND 9014
AUTHORIZING AND APPROVING (A) TILE EXECUTION, DELIVERY,
AND PERFORMANCE, BY ENRON CORP., ENRON TRANSPORTATION
SERVICES, LLC, ENRON OPERATIONS SERVICES, LLC, AND EOC
PREFERRED, LLC, OF THE PURCHASE AGREEMENT AND
CERTAIN TRANSACTION DOCUMENTS RELATED THERETO WITH
CCE HOLDINGS, LLC WITH RESPECT TO TILE SALE OF TILE MEMBERSHIP
INTERESTS IN CROSSCOIJNTRY ENERGY, LLC FREE AN])
CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES, RIGHTS OF SETOFF,
NETTING, RECOUPMENT, AND DEDUCTION AND (B) THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY


Upon the motion, dated May 27, 2004 (the "Motion")1, of Enron Corp., Enron Operations Services, LLC and Enron Transportation Services, LLC, each as debtor and debtors in possession (collectively, the "Debtors"), and EOC Preferred, LLC, a non-debtor affiliate of Enron (collectively, with the Debtors, the "Sellers"), pursuant to sections 105 and 363 of title 11 of the United States Code (the "Bankruptcy Code") and Rules 2002, 6004, 9013, and 9014 of the Federal Rules of Bankruptcy Procedures (the "Bankruptcy Rules") and Rule 9013-1(c) of the Local Bankruptcy Rules for the Southern District of New York (the "Local Rules"), for the entry of an order authorizing and approving (A) the entry by the Sellers into that certain Purchase Agreement, dated May 21, 2004, by and among the Sellers and NuCoastal, LLC, or into a purchase agreement with the winning bidder at the conclusion of an auction for the sale of all of the issued and outstanding membership interests (the "Equity Interest") in CrossCountry, LLC ("CrossCountry"), free and clear of all Liens and Claims to the extent permitted under section 363 of the Bankruptcy Code and (B) the consummation of the transactions contemplated therein; and the Notice of Filing of Purchase Agreement Among CCE Holdings, LLC (the "Purchase?') and Sellers dated as of June 24, 2004 (the "June 24 Agreement"); and the Court having entered on June 24, 2004, the Order Pursuant to Sections 105 and 363 of the Bankruptcy Code and Federal Rules of Bankruptcy Procedure 2002, 6004, 9013 and 9014(A) Authorizing and Scheduling Auction at Which Enron Corp., Enron Operations, LLC, Enron Transportation Services, LLC and EOC Preferred, L.L.C. Will Solicit Bids for the Sale of Issued and Outstanding Membership Interests in CrossCountry, (B) Establishing Procedures for Solicitation and Consideration of Proposals to Purchase Such Membership Interests, (C) Scheduling a Hearing on Proposed Sale of Membership Interests, and (D) Approving Form and Scope of Notices of Bidding Procedures, Sale I-fearing, and Auction, on June 24, 2004 (the "Bidding Procedures Order"); and the Debtors, Creditors' Committee, and Purchaser having entered into a stipulation dated September 1, 2004 (the "Stipulation"), regarding, inter alia, an amendment to the June 24 Agreement enhancing the purchase price for the Equity Interest under the June 24 Agreement (such amendment annexed hereto as EXHIBIT A and the June 24 Agreement, as amended, the "CCE Purchase Agreement"); and the hearing on the Motion having been held before the Court on September 9, 2004 (the "Hearing"); and it appearing that due and proper notice of the Motion and the relief requested therein having been given, and no other or further notice need be given; and upon consideration of the objections and responses to the Motion, including the Objection of the Pension Benefit Guaranty Corporation ("PBGC") to Motion for Authority to Sell CrossCountry dated September 7, 2004 (the "PBGC Objection"); and all parties in interest having been heard or having been afforded an opportunity to be heard at the Hearing; and the relief requested in the Motion being an exercise of the Sellers' sound business judgment and in the best interests of the Sellers, their estates and creditors; and the Bankruptcy Court having determined that the legal and factual bases set forth in the Motion and in the record of the Hearing establish just cause for the relief granted herein and that the terms and provisions contained in the CCE Purchase Agreement, as amended, are fair and reasonable to the Sellers and the Purchaser; and all proceedings had before the Bankruptcy Court; and after due deliberation thereon and good and sufficient cause appearing therefor;


IT IS HEREBY FOUND AND DETERMINED THAT:


A. The findings of fact and conclusions of law set forth herein constitute the Court's findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014.


B. To the extent any of the following findings of fact constitute conclusions of law, they are adopted as such. To the extent any of the following conclusions of law constitute findings of fact, they are adopted as such.


C. The Bankruptcy Court has jurisdiction over the parties and to consider the Motion and the relief requested therein pursuant to 28 U.S.C. ss.ss. 157 and 1334. Venue of these chapter 11 cases and the Motion in this district is proper pursuant to 28 U.S.C. ss.ss. 1408 and 1409. This matter is a core proceeding pursuant to 28 U.S.C. ss. 157(b)(2)(A) and (N).


D. The statutory predicates for the relief sought in the Motion are sections 105(a), 363(b), (f), (in), and (n), and 1146(c) of the Bankruptcy Code, and Bankruptcy Rules 2002, 6004, 9013 and 9014.


E. As evidenced by the certificates of service filed with the Court, and based on the representations of counsel at the Hearing, (A) proper, timely, adequate, and sufficient notice of the Motion, a substantially similar form of this Order, the CCE Purchase Agreement, the transactions contemplated therein, the Auction, and the Hearing has been provided in accordance with sections 105, and 363 of the Bankruptcy Code, Bankruptcy Rules 2002, 6004, 9013, and 9014 and Rule 9013-1(c) of the Local Rifles by serving (i) the Office of the United States Trustee; (ii) counsel for the DIP Lenders; (iii) counsel for the Official Committee of Unsecured Creditors in the Debtors' chapter 11 cases (the "Creditors' Committee"); (iv) Purchaser; (v) Purchaser's counsel; (vi) all entities known to the Sellers to have, or to have asserted, any Claims in or upon the Equity Interest; (vii) all parties who submitted a prior bid for the Equity Interest; (viii) all parties who expressed in writing to the Sellers an interest in the Equity Interest; (ix) all relevant taxing authorities; (x) the Examiner for ENA; (xi) counsel for the Employment-Related Issues Committee; and (xii) all entities who had filed a notice of appearance and request for service of papers in these cases in accordance with the Court's Second Amended Case Management Order, dated December 17, 2002, (B) such notice was good and sufficient and appropriate under the particular circumstances and (C) no other or further notice of the Motion, this Order, the CCE Purchase Agreement or the Hearing is required.


F. The Sellers have complied with the procedures set forth in the Bidding Procedures Order (a) establishing Bidding Procedures, including the manner and form of notice, (b) scheduling a hearing to consider the Motion (i) approving the terms and conditions of a purchase agreement for the sale of the Equity Interest, and (ii) authorizing the consummation of the transactions contemplated therein, and (c) for giving notice of the Motion and the Hearing on approval of a purchase agreement, including the CCE Purchase Agreement and this Order.


G. The Bidding Procedures were fair, were designed to maximize the purchase price for the Equity Interest, were implemented in a fair and reasonable manner, and were complied with in all respects.


H. The Sellers have marketed the Equity Interest and conducted the auction process in compliance with the Bidding Procedures Order and the requirements of applicable law, whereby the Preliminary Purchase Price was enhanced by $100 million.


I. The Sellers (i) are the legal and equitable owners of the Equity Interest; (ii) have frill corporate power and authority to enter into and execute the CCE Purchase Agreement, an escrow agreement, substantially in the form annexed hereto as Exhibit B (the "Escrow Agreement"), and any and all documents and/or agreements contemplated thereby (collectively, with the CCE Purchase Agreement, as amended, and the Escrow Agreement, the "Transaction Documents") and the transactions specified therein have been duly and validly authorized by all necessary corporate action of each of the Sellers, (iii) have all of the corporate power and authority necessary to consummate the transactions contemplated by the Transaction Documents; and (iv) have taken all corporate action necessary to authorize and approve the Transaction Documents and the consummation by each of the Sellers of the transaction specified therein. No consents or approvals, other than those expressly provided for in the Transaction Documents, are required for the Sellers to consummate such transactions.


J. A reasonable opportunity has been afforded any interested party to make a higher or better offer for the Equity Interest or to be heard with respect to the Motion. Notice of the relief requested therein has been afforded to all interested persons and entities, including: (i) the Office of the United States Trustee; (ii) counsel for the Purchaser; (iii) counsel to the Creditors' Committee; (iv) the attorneys for the Debtors' DIP Lenders; (v) all entities known to have expressed an interest in a transaction with respect to the Equity Interest since the filing of the Debtors' chapter 11 cases; (vi) all entities known to have asserted any interests in or Liens upon the Equity Interest; (vii) counsel for the Employment-Related Issues Committee; (viii) the Examiner for Enron North America Corp.; (ix) the Examiner for Enron Corp.; (x) any person, or counsel if retained, appointed pursuant to 28 U.S.C. ss. 1104; (xi) all federal, state, and local regulatory or taxing authorities or recording offices which have a reasonably known interest in the relief requested by the Motion; (xii) the United States Attorney's Office; (xiii) the Securities and Exchange Commission; (xiv) the Internal Revenue Service; (xv) the PBGC; and (xvi) all parties having filed a notice of appearance in the Sellers' chapter 11 cases as of the date of the Motion.


K. The terms and conditions of the CCE Purchase Agreement, as amended, and the Purchase Price to be paid to the Sellers by the Purchaser (i) are fair and reasonable, (ii) represent the highest or best offer for the Equity Interest, and (iii) constitute fair consideration for the Equity Interest. The good faith of the Purchaser is evidenced by, among other things, the following: (i) the Sellers and the Purchaser have engaged in substantial arms' length negotiations in good faith and the Transaction Documents are the product of such negotiations among the parties; and (ii) the Sellers, in consultation with the Creditors' Committee, determined that the Purchaser's bid as reflected in the CCE Purchase Agreement, was the highest or best offer for the Equity Interest.


L. Sound business reasons exist for the Sellers' sale of the Equity Interest pursuant to the Transaction Documents, including the Escrow Agreement. The Court finds that the Sellers have articulated good and sufficient business reasons justifying the sale of the Equity Interest pursuant to sections 105, 363, and 1146 of the Bankruptcy Code. Therefore, execution of the Transaction Documents and consummation of the transaction specified therein, after consultation and cooperation with the Creditors' Committee, constitute the exercise by the Sellers of sound business judgment and such acts are in the best interests of the Sellers, their respective estates and creditors, and other parties in interest.


M. The execution of the Transaction Documents, including the Escrow Agreement, and consummation of the transactions contemplated thereby is properly authorized under all applicable provisions of the Bankruptcy Code, including, without limitation, sections 105, 363. and 1146 of the Bankruptcy Code, and all of the applicable provisions of such sections have been complied with in respect thereof.


N. The consideration provided by the Purchaser to the Sellers in exchange for their sale, conveyance and delivery to the Purchaser of the Equity Interest to the Purchaser constitutes reasonable equivalent value and fair consideration pursuant to the Bankruptcy Code and applicable nonbankruptcy law. A sale of the Equity Interest other than one free and clear of Liens, Claims, encumbrances, tights of setoff, netting, recoupment, and deduction would impact materially and adversely on the Sellers' bankruptcy estates, and would yield substantially less value for the Sellers' estates.


O. The CCE Purchase Agreement was proposed, negotiated, and entered into by the parties thereto at arm's length, without collusion and in good faith between commercially sophisticated entities alter extended and vigorous negotiations. The Purchaser has acted and will be acting in good faith within the meaning of section 363(m) of the Bankruptcy Code in closing the transactions contemplated by the CCE Purchase Agreement, as amended, at all times after the entry of this Order. The Purchaser is a good faith purchaser under the Transaction Documents, and is entitled to all of the protections as to the sale of the Equity Interest afforded thereby. None of the parties to the CCE Purchase Agreement has engaged in any conduct that would cause or permit the CCE Purchase Agreement to be avoided (or the validity of the transactions contemplated therein and in the Transaction Documents affected) under section 363(n) of the Bankruptcy Code or any other provision of the Bankruptcy Code.


P. The Purchaser is not an "insider" of any of the Sellers, as that term is defined in section 101 of the Bankruptcy Code.


Q. Except as provided in this Order, no consents or approvals, other than this Order and those expressly provided for in the Transaction Documents, are required for the parties to consummate the transactions contemplated by the Transaction Documents.


R The transactions specified herein and in the Transaction Documents constitute a sale for purposes of section 1146(c) of the Bankruptcy Code and all transfers in connection therewith shall be exempt from any and all stamp, value added, ad valorem, transfer, recording and other similar taxes and any transfer or recording fees or other similar costs charged or assessed by any federal, state, local, or foreign authority (including interest and penalties, if any).


S. The transfer of the Equity Interest to the Purchaser will be a legal, valid, and effective transfer of the Equity Interest, and will vest the Purchaser with all ti ...