Application or Declaration — Form U-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: U-1 Application or Declaration -- formu1 48 232K
2: EX-99.1 Exhibit B-1 3 15K
3: EX-99.2 Exhibit G - Form of Notice 8 37K
4: EX-99.3 Exhibit H - List of Subsidiaries, Affiliates 65 497K
5: EX-99.4 Exhibit J-3 3 9K
6: EX-99.5 Exhibit J-4 17 29K
7: EX-99.6 Exhibit K 25 88K
EX-99.5 — Exhibit J-4
| EX-99.5 | 1st Page of 17 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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| Chapter 11
In re: |
| Case No. 01-16034 (AJG)
ENRON CORP., ET AL., |
|
| Jointly Administered
|
Debtors. |
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AMENDED ORDER AUTHORIZING CONTINUED USE OF
EXISTING BANK ACCOUNTS, CASH MANAGEMENT SYSTEM,
CHECKS AND BUSINESS FORMS, AND GRANTING
INTER-COMPANY SUPERPRIORITY CLAIMS, PURSUANT TO
11 U.S.C. ss.ss. 361, 363(E), 364 AND 507(B),
AS ADEQUATE PROTECTION
Upon consideration of the motion, dated December 12, 2001 (the
"Initial Cash Management Motion"), filed by Enron Corp. and certain of its
affiliated entities, as debtors and debtors in possession (collectively, the
"Debtors"), seeking entry of an order authorizing the Debtors' continued use of
their existing bank accounts, cash management system (the "Centralized Cash
Management System"), checks and business forms; and of the motion, dated January
17, 2002 (the "Trading Creditors' Motion"), filed by various trading creditors
of Enron North America ("ENA"), seeking entry of an order, among other things,
excepting ENA from the Debtors' existing cash management system; and of the
various joinders filed in respect of the
Trading Creditors' Motion; and of the objection to the Trading Creditors'
Motion, dated January 27, 2002, filed by the Debtors; and of the limited
objection to the Trading Creditors' Motion, dated January 28, 2002, filed by
Citicorp USA, Inc. and JP Morgan Chase Bank, in their respective capacities
under the DIP Credit Agreement (as such agreement is defined in the Interim
Order Authorizing Debtors to Obtain Post-Petition Financing Pursuant to 11
U.S.C. ss.ss. 105, 361, 362, 364(c)(1), 364(c)(3) and 364(d)(1) and Scheduling
Final Hearing Pursuant to Bankruptcy Rule 4001(c), dated December 3, 2001 (the
"Interim DIP Financing Order"), as may be modified from time to time); and of
the response to the Trading Creditors' Motion, dated February 5, 2002 (the
"Committee Response"), filed by the Official Committee of Unsecured Creditors
(the "Committee"); and the Court having jurisdiction to consider the Initial
Cash Management Motion and the Trading Creditors' Motion (collectively, the
"Motions") and all related pleadings; and it appearing that the resolution
proposed by the Committee Response is in the best interest of the Debtors, their
estates and creditors; and it appearing that due notice of the Motions has been
given and no other or
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further notice need be given; and upon the proceedings before the Court; and
good and sufficient cause appearing;
IT IS HEREBY ORDERED THAT:
1. The Order, dated December 3, 2001, approving the Initial Cash
Management Motion is hereby amended and superseded as follows.
2. The Debtors are authorized to: (a) continue all processes necessary
to close all accounts of the Enron Companies/1 maintained at Bank of America,
(b) maintain and continue to use any or all of their existing bank accounts in
the names and with the account numbers existing immediately prior to their
chapter 11 cases; provided, however, that the Debtors reserve the right to close
some or all of their prepetition bank accounts and open new debtor in possession
accounts; (c) deposit funds in and withdraw funds from any such accounts by all
usual means including, but not limited to, checks, wire transfers, automated
clearinghouse transfers, electronic funds transfers and other debits; and (d)
treat their prepetition bank accounts (and any accounts opened postpetition) for
all purposes as debtor in possession accounts.
--------
1 Capitalized terms not otherwise defined herein shall have the meaning ascribed
to them in the Initial Cash Management Motion.
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3. All of the banks with which the Debtors maintain Bank Accounts are
authorized (a) to continue to maintain, service and administer such accounts in
accordance with the terms of any agreements governing such accounts and (b) to
rely on representations of the Debtors as to which checks, wires or ACH
transfers issued or dated prior to the Petition Date (i) may not be paid by law
or (ii) are permitted to be paid pursuant to Orders of this Court. Such banks
shall have no liability to any party for relying on the directions of the
Debtors as provided for herein.
4. Except as otherwise required by any applicable cash collateral or
postpetition financing orders or the DIP Credit Agreement, the Debtors are
authorized to continue to utilize the Centralized Cash Management System as
described in the Initial Cash Management Motion. Accordingly, except as required
by the DIP Credit Agreement, the Debtors are not required to establish separate
accounts for cash collateral and/or tax payments. Further, the Debtors are
authorized to pay any costs or expenses associated with the maintenance of the
Centralized Cash Management System. Notwithstanding anything to the contrary in
this or any prior Order of the Court, the
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Debtors' authority to continue use of the Centralized Cash Management System is
hereby conditioned on the Debtors having no more than $250 million in
outstanding DIP Obligations, subject to increase by a maximum amount of $150
million at the final hearing on DIP financing.
5. Junior Reimbursement Claims and Junior Liens. Notwithstanding any
other Order of the Court, and as adequate protection for each Debtor for the
continued use of the Centralized Cash Management System, to the extent that any
Debtor transfers (or transferred) property (including cash) following the
Petition Date (the "Adequately Protected Debtor") to or for the benefit of any
other Debtor (the "Beneficiary Debtor"), with an aggregate fair value in excess
of the aggregate fair value of property (including cash) or benefit received by
the Adequately Protected Debtor from the Beneficiary Debtor following the
Petition Date, then the following shall apply:
(a) the Adequately Protected Debtor shall have (x) an allowed claim
against the Beneficiary Debtor for the fair value of property (including cash)
or benefit transferred (net of any reasonable expenses for overhead or other
services reasonably allocated or reasonably charged
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to the Adequately Protected Debtor), under Sections 364(c)(l) and 507(b), having
priority over any and all administrative expenses of the kind specified in
Sections 503(b) and 507(b) of the Bankruptcy Code, which claim shall bear
interest at the Prevailing Rate (as defined in paragraph 7 hereof) for the
period accruing from and after the date such claim arises until repayment
thereof (collectively, the "Junior Reimbursement Claim") and (y) a lien on all
property of the Beneficiary Debtor's estate under Section 364(c)(3) of the
Bankruptcy Code securing such Junior Reimbursement Claim (Junior Lien);
(b) (i) all Junior Reimbursement Claims and Junior Liens shall be
junior, subject and subordinate only to the superpriority claims and liens
granted to the Agents and the DIP Lenders in respect of the Debtors' DIP
Obligations (as such terms are defined in the Interim DIP Financing Order), and
to any claims against such Beneficiary Debtor that are expressly senior to, or
carved out from, such claims of the Agents and DIP Lenders; (ii) the Adequately
Protected Debtor shall forbear from exercising, and shall not be entitled to
exercise, any right or remedy relating to any Junior Lien or Junior
Reimbursement Claim including, without limitation, seeking
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relief from the automatic stay, or seeking any sale, foreclosure, realization
upon or repossession or liquidation of any property of another Debtor, or taking
any position with respect to any disposition of the property, the business
operations, or the reorganization of another Debtor; and (iii) the Agents for
the DIP Lenders shall have the exclusive right to manage, perform and enforce
all such rights and remedies described in the preceding clause (ii), and under
the Documents (as such term is defined in the Interim DIP Financing Order) and
the Adequately Protected Debtor shall immediately, upon the request of the
Agents for the DIP Lenders, release or otherwise terminate its Junior Lien, to
the extent that the property subject to such Junior Lien is sold or otherwise
disposed of by the Agents or the other Debtors, in the case of each of clauses
(i), (ii) and (iii) above or the Documents;
(c) with respect to effect of Junior Liens on any sale of property by
the Debtors, (i) the Debtors may sell property, in accordance with Section 363
of the Bankruptcy Code, free and clear of any Junior Lien with such lien
attaching to the proceeds of sale in the same priority as existed in respect of
the property sold, (ii)
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the provisions of Section 363(k) of the Bankruptcy Code shall not apply and
(iii) in no event shall the Agents be subject to the doctrine of "marshaling" or
similar equitable doctrine;
(d) unless otherwise ordered by the Court, after notice and a hearing,
no transfers of property (including cash) shall be made following the date
hereof by any Debtor to or for the benefit of any other Debtor (other than in
respect of repayment of the DIP Obligations, if any) unless the aggregate fair
value of assets (including Junior Reimbursement Claims) of the proposed
Beneficiary Debtor, immediately prior to such transfer, exceeds the sum of (x)
all outstanding DIP Obligations in excess of the amount of cash collateral being
held in escrow by the DIP Agents, (y) all claims against the proposed
Beneficiary Debtor that are expressly senior to, or carved out from, claims in
respect of the DIP Obligations (excluding setoff rights whose exercise has not
previously been authorized by the Court) and (z) all Junior Reimbursement Claims
allowable against the proposed Beneficiary Debtor, immediately after such
transfer; and
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(e) no provision of this Order shall supercede or alter the rights of
the Agents or the DIP Lenders under the DIP Credit Agreement or the Documents.
6. Non-Debtor Affiliates. Except as provided in an Allocation Order
(as defined below) or any other Order of this Court, unless otherwise ordered by
the Court, after notice and a hearing, no transfers of property (including cash)
shall be made following the date hereof by any Debtor to or for the benefit of a
non-debtor affiliate (as such term is defined in Section 101(2) of the
Bankruptcy Code) of any Debtor unless the aggregate fair value of assets of such
non-debtor affiliate, immediately prior to such transfer, exceeds the aggregate
liabilities of such non-debtor affiliate, immediately prior to such transfer, by
at least 15%. To the extent that any Debtor transfers (or transferred) property
(including cash) following the Petition Date to or for the benefit of any
non-debtor affiliate, with an aggregate fair value in excess of the aggregate
fair value of property (including cash) or benefit received by the transferring
Debtor from such non-debtor affiliate, the transferring Debtor shall be deemed
to have made an intercompany loan to such non-debtor affiliate in the principal
amount equal to the net fair
9
value of property (including cash) or benefit transferred (net of any reasonable
expenses for overhead or other services allocated or charged to the transferring
Debtor) following the Petition Date (an "Intercompany Loan"). Each Intercompany
Loan shall accrue interest at the Prevailing Rate for the period such
Intercompany Loan is outstanding, and shall be evidenced by a book entry as a
debt obligation payable by such non-debtor affiliate. Unless otherwise ordered
by the Court, after notice and a hearing, the aggregate Intercompany Loans by
all Debtors outstanding at any time shall not exceed (x) $30,000,000 to any
individual non-debtor affiliate or (y) $70,000,000 to all non-debtor affiliates,
taken as a whole; provided, however, that the foregoing permitted maximum
amounts shall be reduced to $25,000,000 and $50,000,000, respectively, on or
before the 45th day after entry of this Order.
7. Prevailing Rate. For purposes of paragraphs 5 and 6 hereof, the
"Prevailing Rate" accruing on any Junior Reimbursement Claim or Intercompany
Loan shall mean the one-month LIBOR plus 250 basis points, measured on the first
business day of any month in which such Junior Reimbursement Claim or
Intercompany Loan is outstanding, attributed to the average outstanding balance
for the whole
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month. The foregoing rate may be subject to adjustment pursuant to any
Allocation Order (as defined below) subsequently entered by this Court.
8. Reasonable Commercial Judgment. In making any determination of
value required by paragraphs 5 and 6 of this Order, no employee, agent or
representative of any Debtor or non-debtor affiliate shall be in violation of
this Order or have any liability, provided that such employee, agent or
representative uses reasonable commercial judgment (including consultation with
the Debtors' professionals) in making such determination. Nothing in this
paragraph shall alter the obligations imposed on the Debtors or their non-debtor
affiliates hereunder.
9. Restriction on PGE Option. As additional adequate protection for
each Debtor for the continued use of the Centralized Cash Management System,
Enron Corp. shall take all necessary corporate action to cause its wholly-owned
subsidiary, Enron Northwest Assets, LLC, a Delaware limited liability company
("Enron NW Assets") to not exercise the PGE Option. "PGE Option" means the
option held by Enron NW Assets, pursuant to an Option Agreement dated as of May
7, 2001, between Enron Corp. and Enron NW
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Assets, to purchase the issued and outstanding shares of common stock of
Portland General Electric Company, an Oregon corporation, held by Enron Corp.
10. ENA-Specific Protection. As additional adequate protection for the
use of property (including cash) of Enron North America, Inc. ("ENA"), a
representative of ENA shall be added to the Debtors' cash approval and risk
assessment committees (the "Committees") prior to any transfers from ENA to
another Debtor, made following the date hereof. The examiner appointed for ENA
shall consult with the ENA representative regarding matters pertaining to ENA
and reviewed by the Committees. Commencing upon the entry of this Order and
continuing for thirty (30) days thereafter, no transfers of cash of ENA shall be
permitted to be made to any Debtor or non-debtor affiliate other than to pay for
direct actual expenses of ENA, or a direct or indirect subsidiary of ENA,
including, without limitation, payroll expenses, wholesale power purchases, and
funds to support any letters of credit posted or to be posted for the direct
benefit of ENA, or a direct or indirect subsidiary of ENA. As part of any
Allocation Order (as defined below), there shall be a limitation on the maximum
balance of net ENA post-petition
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intercompany receivables from all other Debtors, taken as a whole. Within five
business days after entry of this Order, ENA shall establish a separate cash
concentration account in accordance with Section 5.07 of the DIP Credit
Agreement.
11. No Recoupment or Setoff. Junior Reimbursement Claims and
Intercompany Loans shall not be subject to recoupment or setoff on account of
any debt arising prior to the Petition Date.
12. Reporting. As additional adequate protection for each Debtor for
the continued use of the Debtors' Centralized Cash Management System, and as a
condition thereof: (A) the Debtors shall keep a detailed accounting recording
all intercompany transfers of property (including cash) and intercompany benefit
conferred, and reflecting all Junior Reimbursement Claims (including interest
thereon); (B) the Debtors shall provide details and summary information
regarding cash disbursements of the Debtors on a confidential basis to the
Committee and the Agents, as reviewed by the Debtors' cash approval committee,
including all payments between Debtors and non-debtor affiliates, and shall
permit advisors to the Committee to monitor daily cash approval committee
meetings; (C) the Debtors shall
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provide a report weekly on a confidential basis to the Committee and the Agents
of (i) the cash balances of each Debtor as of the Petition Date and as of each
business week ended thereafter; (ii) cash receipts and disbursements by
individual Debtor, categorizing such receipts and disbursements as between or on
behalf of other Debtors, non-debtor affiliates and unrelated third parties;
(iii) the use of any borrowings or letter of credit issuances under the DIP
Credit Agreement, (iv) the amount of outstanding Junior Reimbursement Claims of
each Debtor against each other Debtor and the amount of outstanding Intercompany
Loans by each Debtor to each non-debtor affiliate and (v) a written computation
reflecting the valuation of assets and liabilities as was required to be
performed by the Debtors during the prior week as a condition to making any
intercompany transfers pursuant to paragraphs 5 and 6 hereof, provided, however,
that the Debtors shall not be in violation of this clause (v) if they develop a
methodology in consultation with the Committee to comply with this clause (v),
and so comply, within 30 days after entry of this Order; (D) within 45 days
after the end of each calendar month, the Debtors shall provide on a
confidential basis to the Committee and
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the Agents respective balance sheets for each Debtor and for each non-debtor
affiliate that has an outstanding Intercompany Loan; and (E) the Debtors shall
provide the Committee with notice and copies of any waivers or other
modifications received or requested in respect of the DIP Credit Agreement as
soon as practicable (but in no event later than one business day) thereafter.
Any report generated pursuant to this paragraph 12 shall be provided by the
Debtors to the ENA examiner.
13. Reservation of Rights. Any party in interest including, without
limitation, the Debtors, the Committee and the Agents, shall have the right to
seek modification of this Order for cause shown, on five (5) business days'
notice to the Debtors, the Committee, the Agents and the U.S. Trustee.
14. No Prejudice. Notwithstanding anything contained in this Order to
the contrary, this Order shall not prejudice or have any preclusive effect with
respect to any proceeding, motion, objection or claim brought or filed by or
through National Energy Production Corp., or any of its creditors, asserting any
constructive trust, earmarking or related legal theory with respect to any funds
being maintained in the Centralized Cash Management System.
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Nothing in the immediately preceding sentence shall constitute a finding or
order with respect to the standing of any party to bring or file any such
proceeding, motion, objection or claim and nothing in this order shall be deemed
to determine that claims of constructive trust, earmarking, or related claims
give rise to any greater rights than prepetition, general, unsecured claims and
rights of all parties in interest to litigate those issues are preserved.
15. Allocation of Shared Overhead Expenses. The Debtors shall, after
consultation with the Committee, develop a formula for allocation, from and
after the Petition Date, of shared overhead expenses among the Debtors and, if
applicable, their non-debtor affiliates, and shall file a motion with the Court
seeking approval of such allocation formula within 30 days after entry of this
Order (any such Order granting such approval being an "Allocation Order").
16. The Debtors are authorized to use their existing check stock, and
business form stock, rather than obtain new stock reflecting their status as
debtors in possession and listing the chapter 11 case numbers under which these
cases are being jointly administered; provided,
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however, that, as soon as practicable, the Debtors shall manually imprint the
legend "debtor in possession" on existing checks, and provided, further, that if
the check stock or the business forms stock is depleted, then the Debtors shall
obtain new check stock and/or business forms stock reflecting their status as
debtors in possession.
DATED: New York, New York
February 25, 2002
s/Arthur J. Gonzalez
---------------------------------
UNITED STATES BANKRUPTCY JUDGE
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Dates Referenced Herein and Documents Incorporated by Reference
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