12-10202-alg Doc 4107 Filed 06/21/13 Entered 06/21/13 15:25:45 Main Document Pg 1 of 3 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: EASTMAN KODAK COMPANY, et al., Chapter 11 Case No.: 12-10202-ALG Debtors. ORDER GRANTING MOTION OF GENERAL ELECTRIC CAPITAL CORPORATION FOR AN ORDER (I) RECOGNIZING ITS RECOUPMENT RIGHTS OR (II) GRANTING, TO THE EXTENT REQUIRED, RELIEF FROM THE AUTOMATIC STAY TO ENFORCE SETOFF RIGHTS AGAINST, OR POSSESSORY SECURITY INTEREST IN, SECURITY DEPOSIT, PURSUANT TO SECTIONS 362(d) AND 553(a) OF THE BANKRUPTCY CODE, AND (III) ALLOWING REJECTION DAMAGES AND GUARANTY CLAIMS PURSUANT TO SECTIONS 502(a) AND (g)(1) AND 365(g)(1) OF THE BANKRUPTCY CODE Upon consideration of the Motion of General Electric Capital Corporation ( GECC ) for an Order (I) Recognizing its Recoupment Rights Or (II) Granting, To the Extent Required, Relief from the Automatic Stay To Enforce Setoff Rights Against, Or Possessory Security Interest In, Security Deposit, Pursuant to Sections 362(d) and 553(a) of the Bankruptcy Code, and (III) Allowing Rejection Damages and Guaranty Claims Pursuant to Sections 502(a) and (g)(1) and 365(g)(1) of the Bankruptcy Code (the Motion ), 1 the Declaration, any timely response to the Motion, and the Agreement by and among General Electric Capital Corporation, Kodak Aviation Leasing LLC, and Eastman Kodak Company for (I) Relief from Automatic Stay, Pursuant to Section 362(d) of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 4001(d)(1)(A)(iii) and (d)(4), To Enforce Rights Against Security Deposit and (II) Allowance of General Electric Capital Corporation s Claims Relating to Aircraft Lease Pursuant to Section 502 of the Bankruptcy Code (the Agreement ), which is attached to this Order as Exhibit A; and having determined that jurisdiction exists over this 1 Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Motion. US_ACTIVE-113065768.6-LQIU 06/21/2013 3:05 PM
12-10202-alg Doc 4107 Filed 06/21/13 Entered 06/21/13 15:25:45 Main Document Pg 2 of 3 matter pursuant to 28 U.S.C 157 and 1334(b), notice of the Motion and the relief set forth in the Agreement was sufficient and no other or further notice is required, and cause exists for granting the relief provided in the Agreement: IT IS HEREBY ORDERED THAT: 1. This Motion is granted on the terms set forth in the Agreement; 2. The Agreement is approved as an Order of this Court; and 3. The Debtor shall serve a copy of this Order (including the Agreement) on its claims and noticing agent, Kurtzman Carson Consultants LLC. Dated: June 21, 2013 New York, New York s/allan L. Gropper HONORABLE ALLAN L. GROPPER UNITED STATES BANKRUPTCY JUDGE - 2 -
12-10202-alg Doc 4107 Filed 06/21/13 Entered 06/21/13 15:25:45 Main Document Pg 3 of 3 EXHIBIT A US_ACTIVE-113065768.6-LQIU 06/21/2013 3:05 PM
Pg 1 of 15 AGREEMENT BY AND AMONG GENERAL ELECTRIC CAPITAL CORPORATION, KODAK AVIATION LEASING LLC, AND EASTMAN KODAK COMPANY FOR (I) RELIEF FROM AUTOMATIC STAY, PURSUANT TO SECTION 362(d) OF THE BANKRUPTCY CODE AND FEDERAL RULE OF BANKRUPTCY PROCEDURE 4001(d)(1)(A)(iii) AND (d)(4), TO ENFORCE RIGHTS AGAINST SECURITY DEPOSIT AND (II) ALLOWANCE OF GENERAL ELECTRIC CAPITAL CORPORATION S CLAIMS RELATING TO AIRCRAFT LEASE PURSUANT TO SECTION 502 OF THE BANKRUPTCY CODE This agreement (the Agreement ) is made as of this 7 th day of June 2013 between General Electric Capital Corporation ( GECC ), Kodak Aviation Leasing LLC ( Kodak Aviation ), and Eastman Kodak Company ( EKC, and together with GECC and Kodak Aviation, each, a Party and collectively, the Parties ). RECITALS WHEREAS, Kodak Aviation, as lessee, and Wells Fargo Bank Northwest, N.A. ( Wells Fargo ), in its capacity as owner-trustee, entered into an Amended and Restated Aircraft Lease Agreement dated as of March 19, 2010 (the Aircraft Lease ) 1 with respect to the lease of a certain Canadair Ltd. Model CL-600-2B16 Aircraft, consisting of the following components: (a) an airframe bearing manufacturer s serial number 5365 and U.S. Registration Number N280K; and (b) two General Electric Model C34-3B aircraft engines bearing manufacturer s serial numbers 872276 and 872277 (collectively, the Aircraft ). WHEREAS, pursuant to the Aircraft Lease, which was a net lease, Kodak Aviation was obligated to make certain Rent Payments to GECC as set forth therein. In addition, Kodak Aviation was obligated, inter alia, to (i) reimburse GECC for any property tax that GECC may incur in respect of the Aircraft, (ii) return the Aircraft in airworthy condition and in the condition 1 Capitalized terms not defined in this Agreement shall have the meaning given such terms in the Aircraft Lease. Any description contained in this Agreement regarding the Parties rights and obligations under the Aircraft Documents (as defined below) is qualified in its entirety by the actual terms and conditions of the Aircraft Documents. In the event any such description and the actual terms and conditions of the Aircraft Documents conflict, the actual terms and conditions of the Aircraft Documents shall control. US_ACTIVE-113065768.6-LQIU 06/12/2013 3:31 PM
Pg 2 of 15 in which the Aircraft is required to be maintained pursuant to the Aircraft Lease; and (iii) pay to GECC the Actual Cost of servicing or repairing the Aircraft, engine or other part if the Aircraft had not been maintained or returned in accordance with the Aircraft Lease. WHEREAS, contemporaneously with execution of the Aircraft Lease, Kodak Aviation, GECC (as Collateral Agent), and Wells Fargo entered into a Security Deposit Pledge Agreement dated as of March 19, 2010 (the Deposit Agreement ), whereby Kodak Aviation agreed to deposit and pledge to GECC the aggregate amount of $700,000 (the Collateral ) as security for the payment and performance of Kodak Aviation s obligation under the Aircraft Lease. WHEREAS, pursuant to Section 3 of the Deposit Agreement, [a]fter any default by [Kodak Aviation] under the [Aircraft Lease] and while the same is continuing, GECC, as Collateral Agent, may apply the Collateral towards the satisfaction of [Kodak Aviation s] obligations under the [Aircraft Lease] and the payment of all costs and expenses incurred as a result of Kodak Aviation s default, including but not limited to, costs of repossessing the Aircraft and attorneys fees. WHEREAS, pursuant to and in accordance with the Deposit Agreement, Kodak Aviation has deposited and pledged the full amount of the Collateral, and GECC continues to hold the same pursuant to and in accordance with the Deposit Agreement. WHEREAS, as of March 19, 2010, Kodak Aviation, as sublessor, and EKC, as sublessee, executed an Aircraft Sublease Agreement (the Aircraft Sublease ), and Kodak Aviation, EKC, and Wells Fargo (as owner-trustee) executed an Aircraft Sublease Addendum to the Aircraft Lease (the Sublease Addendum ). WHEREAS, to induce GECC to approve the Aircraft Lease and Aircraft Sublease, EKC executed and delivered to GECC (i) a Corporate Guaranty dated as of June 19, 2000 (the - 2 -
Pg 3 of 15 Guaranty ) pursuant to which EKC guaranteed Kodak Aviation s payment and performance under the Aircraft Lease, whether for principal, interest, rent, late charges, indemnities, liquidated damages or a deficiency after sale or other disposition of any leased equipment, as well as losses, costs and reasonable attorneys fees incurred, and (ii) a Reaffirmation of Guaranty dated as of March 19, 2010 (the Reaffirmation of Guaranty, and together with the Aircraft Lease, the Deposit Agreement, the Aircraft Sublease, the Sublease Addendum, and the Guaranty, collectively, the Aircraft Documents ). WHEREAS, on January 19, 2012 (the Petition Date ), the Debtors commenced their bankruptcy cases (the Cases ) by filing voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code ) with the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court ). WHEREAS, on January 19, 2012, the Debtors filed their Motion for an Order Authorizing Rejection of Certain Unexpired Aircraft Leases Effective as of the Petition Date (the Rejection Motion ) [ECF No. 27]. By the Rejection Motion, the Debtors sought, inter alia, authorization to reject the Aircraft Lease as of the Petition Date as well as authority to take such actions as necessary or appropriate to implement and effectuate the rejection of the Aircraft Lease. WHEREAS, on February 15, 2012, the Bankruptcy Court entered an order granting the relief requested in the Rejection Motion [ECF No. 368], including the Debtors rejection of the Aircraft Lease (the Rejection ). WHEREAS, pursuant to the Rejection Order, GECC cooperated with the Debtors to recover the Aircraft, and on or about March 1, 2012, GECC or its agents took possession of the Aircraft. - 3 -
Pg 4 of 15 WHEREAS, on July 16, 2012, GECC, as Aircraft Lease servicer and trust beneficiary, timely filed (i) proof of claim #5421 against Kodak Aviation for amounts owed to GECC under the Aircraft Lease and (ii) proof of claim #5425 against EKC for amounts owed to GECC under Guaranty. WHEREAS, on March 18, 2013, GECC filed (i) proof of Claim #6110 (the Kodak Aviation Claim ) against Kodak Aviation (amending proof of claim #5421) in the amount of $2,064,999.73, plus piloting expenses, storage, service, maintenance and insurance costs and other amounts alleged to be owed to GECC under the Aircraft Lease; and (ii) proof of Claim #6109 (the EKC Claim and together with the Kodak Aviation Claim, the Claims ) against EKC (amending proof of claim #5425) in the amount of $2,064,999.73, plus piloting expenses, storage, service, maintenance and insurance costs and other amounts alleged to be owed to GECC under the Guaranty and the Sublease Addendum. WHEREAS, as of the date of this Agreement, the Aircraft has not been sold or otherwise disposed of and remains in the possession of GECC or its agents. WHEREAS, as a result of the Rejection, Kodak Aviation has not paid the four (4) quarterly Rent Payments remaining under the Aircraft Lease, each in the amount of $412,999.95, due from March 19, 2012 through March 19, 2013. Accordingly, Kodak owes Rent Payments to GECC in the aggregate amount of One Million Six Hundred Fifty One Thousand Nine Hundred Ninety Nine Dollars and Eighty Cents ($1,651,999.80). 2 WHEREAS, as of April 15, 2013, GECC alleges that it has received invoices for piloting expenses, storage, service, maintenance and insurance costs and other amounts otherwise 2 The total amount of Rent Payments set forth in the Claims was $2,064,999.73, which included five (5) quarterly Rent Payments each in the amount of $412,999.95 (as rounded). That amount was incorrect as Rent Payments are made in advance, not in arrears, under the Aircraft Lease. Accordingly, no payment was due at the March 19, 2013, expiration of the Aircraft Lease. Thus, Kodak Aviation has not paid the final four (4) quarterly Rent Payments. - 4 -
Pg 5 of 15 payable by Kodak Aviation under the Aircraft Lease in the aggregate amount of Three Hundred Nine Thousand One Hundred Seventy One Dollars and Fifty Two Cents ($309,171.52). WHEREAS, GECC alleges that each of Kodak Aviation (pursuant to the Aircraft Lease) and EKC (pursuant to the Guaranty and the Sublease Addendum) owes to GECC at least the aggregate sum of Two Million Forty Three Thousand Seven Hundred Seventy One Dollars and Thirty Two Cents ($2,043,771.32), plus interest thereon. WHEREAS, the Debtors have reviewed the Claims and documentation supporting the Claims (i) to determine whether to consent to relief from the automatic stay so that GECC can exercise its rights in and to the Collateral and (ii) to determine the proper amount of the Claims at this time. WHEREAS, on May 29, 2013, GECC filed its Motion for an Order (I) Recognizing its Recoupment Rights Or (II) Granting, To the Extent Required, Relief from the Automatic Stay To Enforce Setoff Rights Against, Or Possessory Security Interest In, Security Deposit, Pursuant to Sections 362(d) and 553(a) of the Bankruptcy Code, and (III) Allowing Rejection Damages and Guaranty Claims Pursuant to Sections 502(a) and (g)(1) and 365(g)(1) of the Bankruptcy Code (the Motion ) (Dkt. Item No.3828); WHEREAS, subject to Bankruptcy Court approval under Rule 4001(d)(1)(A)(iii) and (d)(4) of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ) and Section 502 of the Bankruptcy Code as contemplated herein, the Parties have agreed to (i) relief from the automatic stay under Section 362(d) of the Bankruptcy Code and (ii) allowance of the Claims (after application of the Collateral), as provided in this Agreement. - 5 -
Pg 6 of 15 AGREEMENT NOW, THEREFORE, intending to be legally bound, in consideration of the mutual promises contained herein, the Parties agree as follows: 1. Incorporation of Recitals. The foregoing Recitals are incorporated by reference as if fully set forth herein. 2. Rights in and to the Collateral. The Parties agree that, on account of the Rejection, GECC may recoup, offset or otherwise exercise its rights to and in the Collateral. 3. Relief from the Automatic Stay. To the extent necessary to enforce GECC s rights in or to the Collateral, pursuant to Section 362(d)(1) and (2) of the Bankruptcy Code, the automatic stay is lifted and terminated for the sole and limited purposes of allowing GECC to take all actions necessary or appropriate to recoup, setoff, foreclose on, or otherwise exercise its rights in and to the Collateral. 4. Allowance of Claims. The Claims are allowed (net of the Collateral) as follows: a. The Kodak Aviation Claim is allowed as a non-priority, general unsecured claim in the amount of One Million Two Hundred Sixty One Thousand One Hundred Seventy One Dollars and Thirty Two Cents ($1,261,171.32) (the Allowed Kodak Aviation Claim ); and b. The EKC Claim is allowed as a non-priority, general unsecured claim in the amount of One Million Two Hundred Sixty One Thousand One Hundred Seventy One Dollars and Thirty Two Cents ($1,261,171.32) (the Allowed EKC Claim, and together with the Allowed Kodak Aviation Claim, the Allowed Claims ). - 6 -
Pg 7 of 15 5. Each of the Allowed Claims is (a) an allowed non-priority, general unsecured claim for all purposes in the Cases and (b) not subject to objection, defense, disallowance or reduction for any reason. Any and all distributions on account of the Allowed Claims shall be made pursuant to and in accordance with the terms and conditions of any confirmed plan of reorganization or liquidation in the Cases or the terms and conditions of any other means of general distribution to allowed non-priority, general unsecured claims (whether in Chapter 11 or Chapter 7); provided, however, that the Claims shall not be subject to objection, defense, disallowance or reduction for any reason. For the avoidance of doubt, (a) if the Cases are not substantively consolidated by a final, non-appealable order of the Bankruptcy Court, any such distributions on account of the Allowed Claims shall not exceed One Million Two Hundred Sixty One Thousand One Hundred Seventy One Dollars and Thirty Two Cents ($1,261,171.32) in the aggregate; and (b) if the Cases are substantively consolidated by a final, non-appealable order of the Bankruptcy Court, the Allowed Claims shall be treated as a single claim in the amount of One Million Two Hundred Sixty One Thousand One Hundred Seventy One Dollars and Thirty Two Cents ($1,261,171.32) for purposes of distribution and all other purposes in the Cases. In any event, the Debtors represent and warrant that they will not file any objection to the Allowed Claims. 6. Bankruptcy Court Approval. This Agreement is conditioned upon the Bankruptcy Court s entry, on or before June 24, 2013 (or such other date to which the Parties agree in writing), of an order approving this Agreement in the form attached as Exhibit A (the Approval Order ). If (a) the Bankruptcy Court does not enter the Approval Order on or before June 24, 2013 (or such other date to which the Parties agree in writing), (b) the Bankruptcy Court enters an order denying approval of this Agreement, or (c) the Approval Order is vacated or reversed on - 7 -
Pg 8 of 15 appeal, this Agreement shall be null and void, the Parties shall revert to their pre-agreement positions without any prejudice whatsoever from having entered into this Agreement, and none of the Parties shall thereafter be bound by this Agreement or any of its terms and conditions, including, without limitation, the foregoing Recitals. The Debtors and GECC will seek entry of the Approval Order at the June 20, 2013, hearing in the Cases. 7. Mutual Release. In consideration of each Party s execution of this Agreement and the Allowed Claims, each Party on behalf of itself and any other party, person or entity claiming under or through it, hereby generally releases, discharges and acquits each other Party, and its respective current and former agents, servants, officers, directors, shareholders, employees, subsidiaries, divisions, branches, units, affiliates, parents, attorneys, successors, predecessors, heirs, personal representatives, and assigns (each of the foregoing, a Released Party ), from all manners of action, causes of action, judgments, executions, debts, demands, rights, damages, costs, expenses, and claims of every kind, nature, and character whatsoever, whether in law or in equity, whether based on contract (including, without limitation, quasicontract or estoppel, statute (including, without limitation, the Bankruptcy Code, regulation, tort, alleged fiduciary duty, recklessness, gross negligence, or negligence) or otherwise, accrued or unaccrued, known or unknown, matured, unmatured, liquidated or unliquidated, certain or contingent, that such releasing Party ever had or claimed to have or now has or claims to have presently or at any future date, against any Released Party, arising under or related to the Aircraft Documents, the Collateral, the Rejection, or the Motion. Notwithstanding the foregoing, nothing in this Agreement shall release, waive, or discharge the Parties respective rights or obligations under this Agreement with respect to the Collateral or the Allowed Claims. - 8 -
Pg 9 of 15 8. Entire Agreement. This Agreement represents the entire agreement of the Parties with respect to the Rejection, the Collateral, the Allowed Claims, and the Motion, and all prior or contemporaneous negotiations, understandings and agreements regarding such subject matter are superseded by this Agreement. 9. Amendment. This Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by all of the Parties and approved, if required under the Bankruptcy Code or the Bankruptcy Rules, by the Bankruptcy Court. 10. Other Proofs of Claim. Nothing in this Agreement is intended to, or shall be interpreted as, affecting (a) proofs of claim filed by GECC or its affiliates that are unrelated to the Aircraft Documents or the Rejection ( Unrelated Claims ) or (b) the rights of GECC, the Debtors and their estates, or any other party in interest relating to the Unrelated Claims or the allowance or disallowance of the Unrelated Claims. 11. Non-Severability. The invalidity, illegality, or unenforceability of any provision of this Agreement shall invalidate the remainder of this Agreement. 12. Counterparts. This Agreement may be executed in counterparts and by facsimile or.pdf, which together shall constitute but one and the same agreement. 13. Successors and Assigns; Binding Effect. This Agreement binds and inures to the benefit of the Parties and their successors and assigns, including without limitation, any trustee or plan administrator appointed or elected in the Cases. This Agreement shall bind all parties in interest in the Cases. 14. Interpretation. This Agreement has been negotiated by the Parties adequately represented by counsel, none of whom will be deemed the drafter of the Agreement. - 9 -
Pg 10 of 15 No provision of this Agreement will be applied or interpreted by reference to any rule construing provisions against the drafter. 15. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to its principles of conflicts of laws. 16. Attorneys Fees. The Parties shall bear their own attorneys fees and costs with respect to the execution and delivery of this Agreement and an Approval Order. 17. No Admission of Wrongdoing. This Agreement is entered into solely for the convenience of the Parties and neither this Agreement nor the fact of its execution shall constitute an admission or acknowledgement of wrongdoing on the part of any of the Parties. The Parties shall not offer this Agreement or the fact of its execution into evidence in any proceeding other than a proceeding to approve this Agreement or enforce any of its terms. 18. Bankruptcy Court Jurisdiction. To the extent the Bankruptcy Court has jurisdiction and agrees to exercise such jurisdiction, the Parties expressly consent and submit to the exclusive jurisdiction of the Bankruptcy Court over any actions or proceedings relating to the enforcement or interpretation of this Agreement, and any Party bringing such action or proceeding shall bring such action or proceeding in the Bankruptcy Court. Each of the Parties consents to the Bankruptcy Court entering a final judgment determining such matter and agrees that a final, non-appealable judgment in any such action or proceeding, including all appeals, shall be conclusive and may be enforced in other jurisdictions (including any foreign jurisdictions) by suit on the judgment or in any other manner provided by applicable law. - 10 -
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Pg 12 of 15 EXHIBIT A US_ACTIVE-113065768.6-LQIU 06/12/2013 3:31 PM
Pg 13 of 15 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: EASTMAN KODAK COMPANY, et al., Chapter 11 Case No.: 12-10202-ALG Debtors. ORDER GRANTING MOTION OF GENERAL ELECTRIC CAPITAL CORPORATION FOR AN ORDER (I) RECOGNIZING ITS RECOUPMENT RIGHTS OR (II) GRANTING, TO THE EXTENT REQUIRED, RELIEF FROM THE AUTOMATIC STAY TO ENFORCE SETOFF RIGHTS AGAINST, OR POSSESSORY SECURITY INTEREST IN, SECURITY DEPOSIT, PURSUANT TO SECTIONS 362(d) AND 553(a) OF THE BANKRUPTCY CODE, AND (III) ALLOWING REJECTION DAMAGES AND GUARANTY CLAIMS PURSUANT TO SECTIONS 502(a) AND (g)(1) AND 365(g)(1) OF THE BANKRUPTCY CODE Upon consideration of the Motion of General Electric Capital Corporation ( GECC ) for an Order (I) Recognizing its Recoupment Rights Or (II) Granting, To the Extent Required, Relief from the Automatic Stay To Enforce Setoff Rights Against, Or Possessory Security Interest In, Security Deposit, Pursuant to Sections 362(d) and 553(a) of the Bankruptcy Code, and (III) Allowing Rejection Damages and Guaranty Claims Pursuant to Sections 502(a) and (g)(1) and 365(g)(1) of the Bankruptcy Code (the Motion ), 1 the Declaration, any timely response to the Motion, and the Agreement by and among General Electric Capital Corporation, Kodak Aviation Leasing LLC, and Eastman Kodak Company for (I) Relief from Automatic Stay, Pursuant to Section 362(d) of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 4001(d)(1)(A)(iii) and (d)(4), To Enforce Rights Against Security Deposit and (II) Allowance of General Electric Capital Corporation s Claims Relating to Aircraft Lease Pursuant to Section 502 of the Bankruptcy Code (the Agreement ), which is attached to this Order as Exhibit A; and having determined that jurisdiction exists over this 1 Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Motion. US_ACTIVE-113065768.6-LQIU 06/12/2013 3:31 PM
Pg 14 of 15 matter pursuant to 28 U.S.C 157 and 1334(b), notice of the Motion and the relief set forth in the Agreement was sufficient and no other or further notice is required, and cause exists for granting the relief provided in the Agreement: IT IS HEREBY ORDERED THAT: 1. This Motion is granted on the terms set forth in the Agreement; 2. The Agreement is approved as an Order of this Court; and 3. The Debtor shall serve a copy of this Order (including the Agreement) on its claims and noticing agent, Kurtzman Carson Consultants LLC. Dated: June, 2013 New York, New York HONORABLE ALLAN L. GROPPER UNITED STATES BANKRUPTCY JUDGE - 2 -
Pg 15 of 15 EXHIBIT A US_ACTIVE-113065768.6-LQIU 06/12/2013 3:31 PM