mew Doc 2483 Filed 02/09/18 Entered 02/09/18 11:14:51 Main Document Pg 1 of 14

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1 Pg 1 of 14 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re : : Chapter 11 WESTINGHOUSE ELECTRIC : COMPANY LLC, et al., : Case No (MEW) : Debtors. 1 : (Jointly Administered) x STIPULATION, AGREEMENT, AND ORDER BETWEEN THE DEBTORS AND DUBOSE NATIONAL ENERGY SERVICES, INC. Westinghouse Electric Company LLC ( WEC ), WECTEC Global Project Services (f/k/a/ CB&I Stone & Webster Inc.) ( WECTEC ) and certain of their affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the Debtors ), and DuBose National Energy Services, Inc. ( DuBose, and together with the Debtors, the Parties and, each, a Party ), by and through their respective counsel, hereby enter into this stipulation, agreement, and proposed order (the Stipulation and Order ) and represent and agree, as follows: RECITALS 1. On March 29, 2017 (the Petition Date ), each Debtor commenced with this Court a voluntary case under chapter 11 of title 11 of the United States Code 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 WEIL:\ \2\

2 Pg 2 of 14 (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. No trustee or examiner has been appointed in these chapter 11 cases. 2. 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 (the Bankruptcy Rules ). 3. On April 7, 2017, the United States Trustee for Region 2 (the Trustee ) appointed the Official Committee of Unsecured Creditors (the Committee ) pursuant to section 1102 of the Bankruptcy Code. On October 2, 2017, the Trustee filed an amended notice of appointment [ECF No. 1431] removing South Carolina Electric & Gas Company ( SCE&G ) from the list of unsecured creditors appointed to serve on the Committee. On December 19, 2017, the Trustee filed a second amended notice of appointment [ECF No. 1954] removing Georgia Power Company from the Committee. 4. Additional information regarding the Debtors business, capital structure, and the circumstances leading to the commencement of these chapter 11 cases is set forth in the Declaration of Lisa J. Donahue Pursuant to Rule of the Local Bankruptcy Rules for the Southern District of New York [ECF No. 4], sworn to and filed on the Petition Date. 5. On March 30, 2017, the Court entered an order [ECF No. 68] approving that certain Interim Assessment Agreement, dated as of March 28, 2017 (as amended, the IAA ), 2 between the Debtors, on one hand, and SCE&G and the South Carolina Public Service Authority, on the other hand (collectively, the Owners ). Pursuant to the IAA, the Owners agreed to pay the costs of continuing construction of Units 2 and 3 of the Virgil C. 2 The IAA was subsequently amended on April 28, 2017 [ECF No. 385] and June 27, 2017 [ECF No. 778]. 2

3 Pg 3 of 14 Summer Nuclear Station near Columbia, South Carolina (the Project ) during the Interim Assessment Period (as defined in the IAA): The [Project] Owners agree to pay all costs and administrative claims accrued by the Debtors during the Interim Assessment Period pursuant to the [Engineering, Procurement and Construction Agreement dated May 23, 2008, as amended from time to time (the EPC )], the Interim Assessment Agreement, or any other agreement related to the V.C. Summer Project, regardless of whether the costs become payable during the Interim Assessment Period, and including all costs accrued by the Debtors to Flour, Subcontractors and/or Vendors pursuant to (i) existing purchase orders, vendor contracts and Subcontracts (as defined in the EPC) and (ii) new purchase orders, new vendor contracts, Subcontracts, or change orders to existing purchase order, vendor contracts, or Subcontracts (items (i) and (ii), the IAP Contracts ). IAA 6, see IAA, Amendment No. 1, 2 [ECF No. 385]. The IAA also provides that the Owners will: [I]ndemnify and hold harmless the Debtors against any administrative expenses which the Debtors may incur under the EPC, the Interim Assessment Agreement, the IAP Contracts, or any other agreement related to the V.C. Summer Project, regardless of whether the administrative expenses arise during or after the Interim Assessment Period, including for the avoidance of doubt, prior to the execution of this agreement. IAA 11, see IAA, Amendment No. 1, 4 [ECF No. 385]. 6. Prior to the Petition Date, WECTEC and DuBose entered into the executory contracts listed on Exhibit B annexed hereto (collectively, the Purchase Orders ), which were related to the VC Summer Project. 7. During the Interim Assessment Period, pursuant to the Purchase Orders, and in connection with WECTEC s efforts related to the Project and its performance under the EPC, DuBose produced or supplied goods for the Project. 8. On July 31, 2017, the Owners announced publicly that they were ceasing construction of the Project and provided the Debtors with a notice of termination of the IAA. On 3

4 Pg 4 of 14 August 7, 2017, the IAA expired in accordance with its terms as a result of the Owners termination. 9. On August 7, 2017, the Debtors filed the Omnibus Motion of Debtors Pursuant to 11 U.S.C. 365(a) and 105(a) for Entry of Order Authorizing Debtors to Reject Certain Executory Contracts Related to the VC Summer Project [ECF No. 1099], rejecting the Purchase Orders. The Purchase Orders were rejected in accordance with the Notice of Resolution of Pending Objection to Omnibus Motion of Debtors for Authority to Reject Certain Executory Contracts Related to the VC Summer Project [ECF No. 1391] and Second Notice of Resolution of Pending Objection to Omnibus Motion of Debtors for Authority to Reject Certain Executory Contracts Related to the VC Summer Project [ECF No. 1744]. 10. On October 26, 2017, DuBose filed a motion seeking allowance and immediate payment of its claims [ECF No. 1625] (the Motion ), asserting a total administrative expense of $1,945,974.31, plus interest, and Storage Costs 3 (as defined herein) (the Asserted Claims ), in connection with DuBose s performance under the Purchase Orders during the Interim Assessment Period. 11. As of the date hereof, $474, of the Asserted Claims, corresponding to the invoices listed on Exhibit A annexed hereto (the Invoices ), and in proof of claim number 3433 filed in these cases, have (i) not been paid by the Debtors, and (ii) been determined by the Debtors to be entitled to administrative expense status (the Remaining Claim Asserted ). 12. The Debtors have attempted to independently verify, and, where not possible, obtain the Owners confirmation that the Remaining Claim Asserted is on account of 3 For the avoidance of doubt, proof of claim number 3368 includes the Storage Costs which were also asserted in the Motion. 4

5 Pg 5 of 14 goods provided for the benefit of the Debtors estates such that it represents a valid administrative expense claim within the meaning of section 503(b)(1) of the Bankruptcy Code, but have not been able to independently verify the validity of the Remaining Claim Asserted or receive confirmation from the Owners of the same. 13. On January 19, 2018, Richard Rogers, Vice President and General Manager of DuBose, on behalf of DuBose, signed the Declaration of Richard Rogers in Support of Motion of DuBose National Energy Services, Inc. for Allowance and Immediate Payment of Administrative Expense Claim Pursuant to 11 U.S.C. 503(a) and (b)(1), annexed hereto as Exhibit C (the Declaration ). 14. DuBose asserts and testifies in the Declaration, and the Debtors understand that the Remaining Claim Asserted is comprised of the following administrative expenses incurred by DuBose, as set forth more fully in the Declaration: (i) $181, for expenses incurred on account of goods ordered, furnished, and delivered to the Project during the Interim Assessment Period (the Delivered Goods ); and (ii) $292, of expenses incurred on account of goods that were ordered by the Debtors and furnished by DuBose during the Interim Assessment Period, but were not delivered to the Project prior to the termination of the Interim Assessment Period, as set forth more fully in the Declaration (the Non-Delivered Goods ). 15. DuBose provided proof of delivery of the Delivered Goods to the Debtors and their counsel on November 7, 2017, December 5, 2017 and December 19, DuBose provided photos of the Non-Delivered Goods to the Debtors and their counsel on November 18, 2017 and December 6, DuBose provided various Receipt Inspection Reports relating to the Non-Delivered Goods to the Debtors and their counsel on December 6, DuBose 5

6 Pg 6 of 14 provided additional documentation (35 documents totaling over 5 MB in size) relating to the value of the Non-Delivered Goods and when the work was performed on the Non-Delivered Goods to the Debtors and their counsel on December 6, 2017 and December 7, Because the Non-Delivered Goods were never delivered to the Project, title and ownership of the Non-Delivered Goods never transferred to the Debtors and, thus, the Debtors do not assert an ownership interest in the Non-Delivered Goods. 17. Based on the aggregate information provided in the Motion, by counsel to DuBose to the Debtors and to counsel to the Debtors, and the Declaration, the Debtors have no evidence or reason to believe that the Remaining Claim Asserted is not a valid administrative expense claim within the meaning of section 503(b)(1) of the Bankruptcy Code that was incurred during the Interim Assessment Period (the Validated Claim ). Accordingly, the Debtors intend to pay the Validated Claim, in accordance with this Stipulation and Order, out of segregated funds received pursuant to the IAA. 18. In light of the foregoing, the Parties have agreed, subject to approval of the Bankruptcy Court, to resolve the Motion and allow the Validated Claim as set forth below. NOTICE 19. Notice of this Stipulation and Order will be provided in accordance with the Order Pursuant to 11 U.S.C. 105(a) and Fed. R. Bankr. P. 1015(c), 2002(m), and 9007 Implementing Certain Notice and Case Management Procedures [ECF No. 101] and will be provided to the Owners. The Debtors submit that, in view of the facts and circumstances, such notice is sufficient and no other or further notice need be provided. IT IS HEREBY STIPULATED AND ORDERED AS FOLLOWS: A. This Stipulation and Order shall be effective and binding immediately upon entry of the Stipulation and Order by the Bankruptcy Court (the Effective Date ). 6

7 Pg 7 of 14 B. The Allowed Claim arose during the Interim Assessment Period. C. The Allowed Claim shall be allowed pursuant to section 503(b)(1) of the Bankruptcy Code against WECTEC. D. As of the Effective Date, the Motion shall be deemed withdrawn, and any amount of the Asserted Claim in excess of the Validated Claim shall be deemed irrevocably waived, discharged, and released by DuBose. E. Within five (5) business days of the Effective Date, the Debtors will pay DuBose s Validated Claim in the amount of $474, (the Payment ) in full and complete satisfaction of the Asserted Claims in the Motion. F. As of the Effective Date, (i) proof of claim number 3433 shall be deemed withdrawn, and (ii) proof of claim number 3368 shall be reduced by $50, in asserted storage costs, and shall be noted as such on the Debtors claims register by the Debtors claims and noticing agent, Kurtzman Carson Consultants, LLC. G. Except for Payment provided herein under paragraph E, DuBose shall not be entitled to damages related to the Non-Delivered Goods, including any claim for lost profits, costs, or expenses related to the Non-Delivered Goods, including any such claims set forth in proof of claim H. Other than as provided for herein, DuBose is hereby deemed to have waived any and all administrative expense claims against the Debtors and the Debtors bankruptcy estates on account of, arising out of, or related to the Asserted Claims. I. By the execution of this Stipulation and Order, DuBose represents and warrants that the Validated Claim has not and will not be paid or otherwise satisfied by the Debtors or any other entity except as provided for herein. 7

8 Pg 8 of 14 J. Nothing herein shall prejudice the Debtors rights against the Owners under the IAA. K. The Debtors do not have any interest, ownership or otherwise, in the Non- Delivered Goods and may not assert any interest, ownership or otherwise in the Non-Delivered Goods. L. DuBose may dispose of the Non-Delivered Goods at its own cost, free and clear of any party s interest in such goods. M. This Stipulation and Order contains the entire agreement between the Parties and supersedes all prior agreements and undertakings between the Parties thereto. N. This Stipulation and Order may be signed in counterpart originals, which, when fully executed, shall constitute a single original. O. Nothing in this Stipulation and Order shall be considered an admission of any breach, wrongdoing, negligence, omission, liability, or fault on the part of either of the Parties. The Parties are entering into this Stipulation and Order as a commercial compromise on disputed claims and solely to resolve the claims that are addressed herein. Nothing in this Stipulation and Order, nor anything done pursuant hereto, shall be deemed or construed as modifying, or establishing any precedent, interpretation, or course of dealing under any contract or agreement made between the Parties. P. This Stipulation and Order may not be modified other than by a signed writing executed by the Parties hereto or by further order of the Bankruptcy Court. Q. Each person who executes this Stipulation and Order on behalf of a Party hereto represents that he is duly authorized to execute this Stipulation and Order on behalf of such Party. 8

9 Pg 9 of 14 R. The Debtors are authorized to execute, deliver, implement, and fully perform any and all obligations, instruments, and papers and to take any and all actions reasonably necessary or appropriate to perform any and all of the Debtors obligations set forth in, or contemplated by, the Stipulation and Order. S. Notwithstanding the relief granted herein and any actions taken hereunder, nothing contained herein shall create, nor is intended to create, any rights in favor of, or enhance the status of any claim held by, any person. T. The Stipulation and Order and all of the provisions hereof shall be binding upon and shall insure to the benefit of all Parties, and each of their respective successors or assigns. U. The Bankruptcy Court will retain exclusive jurisdiction over all disputes arising from or relating to this Stipulation and Order. 9

10 Pg 10 of 14 Dated: New York, New York January 19, 2018 By: /s/ David N.Griffiths Gary T. Holtzer Robert J. Lemons Garrett A. Fail David N. Griffiths WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York Telephone: (212) Facsimile: (212) Attorneys for the Debtors and Debtors in Possession Dated: New York, New York January 19, 2018 By: /s/ Edward L. Schnitzer Edward L. Schnitzer CKR Law LLP 1330 Avenue of the Americas New York, NY Telephone: (212) Facsimile: (212) and William C. Smith, Esq. MANNING FULTON & SKINER, P.A Glenwood Avenue, Suite 5200 (27612) P.O. Box Raleigh, North Carolina Telephone: (919) Fascimile: (919) Counsel for DuBose National Energy Services, Inc. SO ORDERED Dated: February 9, 2018 New York, New York s/michael E. Wiles THE HONORABLE MICHAEL E. WILES UNITED STATES BANKRUPTCY JUDGE 10

11 Pg 11 of 14 Invoice Invoice Number Date Delivered Goods Amount Invoiced Exhibit A Due Date Amount Due /21/2017 $21, /4/2017 $21, /21/2017 $21, /4/2017 $21, /28/2017 $ 4, /11/2017 $ 4, /28/2017 $4, /11/2017 $4, /28/2017 $14, /11/2017 $14, /28/2017 $16, /11/2017 $16, /28/2017 $ /11/2017 $ /28/2017 $ /11/2017 $ /31/2017 $46, /14/2017 $46, /31/2017 $46, /14/2017 $46, /31/2017 $5, /14/2017 $5, Non-Delivered Goods /17/2017 $6, /1/2017 $6, /17/2017 $ /1/2017 $ /17/2017 $ /1/2017 $ /17/2017 $7, /1/2017 $7, /17/2017 $3, /1/2017 $3, /17/2017 $3, /1/2017 $3, /18/2017 $13, /2/2017 $13, /18/2017 $9, /2/2017 $9, /18/2017 $14, /2/2017 $14, /18/2017 $20, /2/2017 $20, /18/2017 $12, /2/2017 $12, Purchase Order Rev 15 REV 14 REV 8 REV 8 REV 14 REV 14 REV 8 REV 8 REV SH25.01 REV SS01.89 REV 1 TOTAL $181, REV 14 REV 8 REV 8 rev 8 REV 15 REV SS01.16 Rev SS01.89 Rev SS01.16 Rev SS01.63 Rev SS01.84 Rev 0

12 Pg 12 of 14 Invoice Number Invoice Date Amount Invoiced Due Date Amount Due /18/2017 $1, /2/2017 $1, /18/2017 $2, /2/2017 $2, /18/2017 $6, /2/2017 $6, /18/2017 $7, /2/2017 $7, /18/2017 $2, /2/2017 $2, /18/2017 $6, /2/2017 $6, /18/2017 $17, /2/2017 $17, /17/2017 $3, /1/2017 $3, /17/2017 $6, /1/2017 $6, /23/2017 $7, /7/2017 $7, /23/2017 $ 7, /7/2017 $ 7, /20/2017 $133, /4/2017 $133, Purchase Order SS01.84 REV SS01.63 Rev SS01.78 Rev SS01.15 Rev SS01.78 Rev SS01.84 Rev SS01.84 Rev SS01.78 Rev SS01.63 Rev SH25.01 Rev SH25.01 Rev SH25.01 Rev20 TOTAL $296,

13 Pg 13 of 14 Exhibit B Purchase Orders Purchase Order # D100.CA SH SS SS SS SS SS SS D100.CA SH25.01

14 Pg 14 of 14 Exhibit C Declaration