mew Doc 2969 Filed 03/27/18 Entered 03/27/18 10:35:37 Main Document Pg 1 of 8

Transcription

1 Pg 1 of 8 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: WESTINGHOUSE ELECTRIC COMPANY LLC, et al., Debtors. 1 Chapter 11 Case No (MEW) (Jointly Administered) STIPULATION AND AGREED ORDER BY AND AMONG DEBTORS, AMERICAN HOME ASSURANCE COMPANY, THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, AND NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, P.A. REGARDING CERTAIN PRE-PETITION SURETY BONDS Westinghouse Electric Company LLC and certain debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (each, a Debtor, and, collectively, the Debtors ), and American Home Assurance Company, The Insurance Company of the State of Pennsylvania, and National Union Fire Insurance Company of Pittsburgh, P.A. (collectively, AIG, and, together with the Debtors, the Parties ), by and through their respective counsel, hereby enter into this stipulation and agreed order regarding certain pre-petition surety bonds (this Stipulation ) and represent and agree as follows: 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, if any, are: Westinghouse Electric Company LLC (0933), CE Nuclear Power International, Inc. (8833), Fauske and Associates LLC (8538), Field Services, LLC (2550), Nuclear Technology Solutions LLC (1921), PaR Nuclear Holding Co., Inc. (7944), PaR Nuclear, Inc. (6586), PCI Energy Services LLC (9100), Shaw Global Services, LLC (0436), Shaw Nuclear Services, Inc. (6250), Stone & Webster Asia Inc. (1348), Stone & Webster Construction Inc. (1673), Stone & Webster International Inc. (1586), Stone & Webster Services LLC (5448), Toshiba Nuclear Energy Holdings (UK) Limited (N/A), TSB Nuclear Energy Services Inc. (2348), WEC Carolina Energy Solutions, Inc. (8735), WEC Carolina Energy Solutions, LLC (2002), WEC Engineering Services Inc. (6759), WEC Equipment & Machining Solutions, LLC (3135), WEC Specialty LLC (N/A), WEC Welding and Machining, LLC (8771), WECTEC Contractors Inc. (4168), WECTEC Global Project Services Inc. (8572), WECTEC LLC (6222), WECTEC Staffing Services LLC (4135), Westinghouse Energy Systems LLC (0328), Westinghouse Industry Products International Company LLC (3909), Westinghouse International Technology LLC (N/A), and Westinghouse Technology Licensing Company LLC (5961). The Debtors principal offices are located at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania

2 Pg 2 of 8 RECITALS A. Before March 29, 2017 (the Petition Date ), AIG issued a number of surety bonds at the request and on behalf of certain pre-petition entities that are now Debtors in this matter, as principals, including Westinghouse Electric Company, LLC ( WEC ), PCI Energy Services, Inc., and WEC Carolina Energy Solutions, LLC, to guaranty and financially assure the principals payment and performance obligations with respect to their business operations in the United States and Mexico for the benefit of certain third-parties named as obligees on the surety bonds. B. On the Petition Date, each Debtor commenced with this Court a voluntary case under chapter 11 of title 11 of the United States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code ). The Debtors are authorized to continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. The Debtors chapter 11 cases are being jointly administered for procedural purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure. C. On April 7, 2017, the United States Trustee for Region 2 appointed the Official Committee of Unsecured Claimholders ( UCC ) pursuant to section 1102 of the Bankruptcy Code. No trustee or examiner has been appointed in these chapter 11 cases. D. On October 24, 2017, the Bankruptcy Court entered an Order Pursuant to 11 U.S.C. 363 and 364 and Fed. R. Bankr. P and 6003 Authorizing the Debtors to Continue and Renew their Surety Bond Program [Dkt. 1606] (the Surety Program Order ). E. Currently, there are twenty-two (22) surety bonds issued by AIG that are outstanding, in the aggregate penal sum of $16,232,730.00, as summarized in the attached Exhibit A (each a Bond and, collectively, the Bonds ). 2 With respect to five (5) of the Bonds (collectively, 2 Additionally, in connection with AIG s issuance of the Bonds, prior to the Petition Date, WEC executed in favor of AIG an Agreement of Indemnity dated May 16, 2008 (the Indemnity Agreement ) pursuant to which WEC agreed to exonerate, indemnify, reimburse, and keep indemnified AIG from all loss and expense, including, but not limited to, premiums, costs, expenses, and attorneys fees in the event AIG sustains any loss as a result of having to 2

3 Pg 3 of 8 the Mexican Bonds ), WEC is the principal, Comision Federal De Electricidad is the obligee/beneficiary, and AIG is the reinsurer and fronting partner for a Chubb Commercial Surety ( Chubb ) related entity, ACE Fianzas Monterrey, as issuer of the Mexican Bonds pursuant to separate reinsurance fronting agreements. F. On January 29, 2018, Debtors filed their Joint Chapter 11 Plan of Reorganization [ECF No. 2325] (the Plan ) 3 and Disclosure Statement for Joint Chapter 11 Plan of Reorganization [ECF No. 2326] (the Disclosure Statement ), each as may be amended, modified and/or supplemented. G. On February 14, 2018, AIG filed a Limited Objection and Reservation of Rights of American Home Assurance Company, The Insurance Company of The State of Pennsylvania, and National Union Fire Insurance Company of Pittsburgh, P.A. to Disclosure Statement for Joint Chapter 11 Plan of Reorganization [ECF No. 2558] (the Objection ). In the Objection, AIG argued, among other things, that the Disclosure Statement is silent regarding the Debtors proposed treatment of the Bonds, including the timing and/or mechanism by which Debtors, Plan Investor and/or any other buyer of Debtors assets must procure bonding by another surety company to replace AIG s Bonds in connection with Debtors Plan and asset sale process. H. On February 17, 2018, Debtors and AIG entered into a Stipulation and Agreement [ECF No. 2589] whereby Debtors and AIG agreed that AIG did not object to approval of the Disclosure Statement as providing adequate information to parties in interest, provided that all arguments and rights of AIG with respect to the Bonds and related matters, each as set forth in the Objection, are preserved and may be raised at the hearing to consider confirmation of the Debtors Plan, and provided further that all parties rights to dispute or object to such arguments are also pay or perform under any of the Bonds or on account of any breach or enforcement of the Indemnity Agreement. The Bonds and Indemnity Agreement are not attached because they are voluminous. Copies will be provided upon request. 3 Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan. 3

4 Pg 4 of 8 preserved. I. By Order dated February 22, 2018 [ECF No. 2632], the Court approved the modified first amended Disclosure Statement. A hearing to consider the confirmation of the modified first amended Plan is scheduled for March 27, 2018 (the Confirmation Hearing ). J. The Parties have engaged in discussions concerning the treatment of the Bonds in connection with Debtors Plan and asset sale process. AIG has stated that it is unwilling to continue to act as the Debtors surety in the post-confirmation period absent this Stipulation. Chubb has stated that it is willing to act as the Debtors surety in the post-effective Date period with respect to certain Bonds including, but not limited to, the Mexican Bonds. To assure their ability to maintain adequate bonding without interruption and avoid costly and unnecessary litigation, the Debtors, in a reasonable exercise of sound business judgement, believe that approval of this Stipulation is in the best interests of the Debtors, their estates, and creditors. K. Accordingly, the Parties have agreed, subject to approval by the Court, to the terms set forth herein. NOW, THEREFORE, UPON THE FOREGOING RECITALS, WHICH ARE INCORPORATED AS THOUGH FULLY SET FORTH HEREIN, IT IS HEREBY STIPULATED AND AGREED, BY AND BETWEEN THE PARTIES, THROUGH THEIR UNDERSIGNED COUNSEL, AND, UPON COURT APPROVAL HEREOF, IT SHALL BE ORDERED THAT: AGREEMENT 1. Until the occurrence of the Effective Date of the Plan (or the closing of the sale of substantially all of the Debtors assets pursuant to a standalone sale under section 363 of the Bankruptcy Code as articulated in the Disclosure Statement and Plan, interchangeably referred to herein as the Effective Date ), AIG shall continue to act as Debtors surety with respect to the Bonds, including the Mexican Bonds, consistent with the Surety Program Order and without prejudice, waiver, impairment, limitation, or enhancement of AIG s and/or Debtors respective 4

5 Pg 5 of 8 rights, claims, and/or defenses, as against any person or entity, under the Bonds, Indemnity Agreement (or any related agreements, contracts or documents), or applicable law, all of which are expressly reserved. 2. The Debtors shall use commercially reasonable efforts to procure that Chubb (or, at the Debtors discretion, another surety bond insurer, the Replacement Insurer ) shall, upon the occurrence of the Effective Date, replace AIG as surety on performance and payment Bond # , which Bond runs to the benefit of the Tennessee Valley Authority in the penal sum of $10,000, The Debtors shall use commercially reasonable efforts to procure that the Replacement Insurer shall, upon the occurrence of the Effective Date, issue a replacement performance and payment bond in substitution of Bond # to facilitate the release of AIG as surety on Bond # as of the Effective Date. 3. The Debtors shall use commercially reasonable efforts to procure Chubb s cancellation and termination of, or cause its affiliate ACE Fianzas Monterrey to cancel and terminate, upon the occurrence of the Effective Date, AIG s reinsurance related to Mexican Bond #s , , , , and to facilitate the release of AIG as reinsurer and fronting partner of said Mexican Bonds as of the Effective Date. 4. The Debtors acknowledge that AIG intends, on or after the occurrence of the Effective Date, to cancel Bonds #s , , , , , , , , , , , , , , under the applicable terms thereof by providing the requisite notice to Debtors and the respective Bond obligees. The Debtors further acknowledge that AIG intends, on or after the occurrence of the Effective Date, to cancel or seek a release of the remaining Bond #s and in accordance with applicable nonbankruptcy law. 5

6 Pg 6 of 8 5. Nothing in the Plan and/or Plan Confirmation Order shall impair or limit AIG s ability to cancel or seek a release of any Bond on or after the occurrence of the Effective Date provided that in so doing AIG complies with applicable non-bankruptcy law. 6. Nothing in this Stipulation shall affect the UCC s rights to object to any actions taken by the Parties to this Stipulation, or to object to any claim that may arise as a result of such actions, including, but not limited to, any purported cancellation of any Bonds. 7. This Stipulation may not be modified, altered, amended, or vacated other than by a signed writing executed by the Parties. 8. Each person who executes this Stipulation on behalf of a Party hereto represents that he or she is duly authorized to execute this Stipulation on behalf of such Party. 9. This Stipulation contains the entire agreement between the Parties and supersedes all prior discussions, agreements, and undertakings between the Parties relating to the subject matter hereof. 10. This Stipulation shall be filed and become part of the record in the Debtors chapter 11 cases. 11. This Stipulation shall be governed by, and construed and enforced in accordance with the laws of the State of New York, without giving effect to the principles of conflict of laws thereof. 12. The Parties hereby irrevocably and unconditionally agree that the Court shall retain exclusive jurisdiction to interpret, implement, and enforce the provisions of this Stipulation. 13. This Stipulation may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Evidence of execution of this Stipulation may be exchanged by fax or by electronic transmission of a scanned copy of the signature pages or by exchange of an originally signed document, each of which shall be 6

7 Pg 7 of 8 as fully binding on the Party as a signed original. 7

8 Pg 8 of 8 AGREED WEIL, GOTSHAL & MANGES LLP By: /s/ David N. Griffiths David N. Griffiths 767 Fifth Avenue New York, New York Telephone: (212) Facsimile: (212) david.griffiths@weil.com Attorneys for Debtors and Debtors in Possession CHIESA SHAHINIAN & GIANTOMASI PC By: /s/ Scott A. Zuber Scott A. Zuber One Boland Drive West Orange, New Jersey Telephone: (973) Facsimile: (973) szuber@csglaw.com Attorneys for American Home Assurance Company; The Insurance Company of the State of Pennsylvania; and National Union Fire Insurance Company of Pittsburgh, P.A. NO OBJECTION PROSKAUER ROSE LLP By: /s/ Timothy Q. Karcher Timothy Q. Karcher Eleven Times Square New York, NY Tel: (212) Fax: (212) tkarcher@proskauer.com Counsel to the Statutory Unsecured Claimholders' Committee of Westinghouse Electric Company LLC, et al. APPROVED AND SO ORDERED This 27 th day of March, 2018 BY THE COURT s/michael E. Wiles Honorable Michael E. Wiles United States Bankruptcy Judge 8