Reso 2000-632f
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RESOLUTION NO. 2000-632
A RESOLUTION OF THE COSTA MESA SANITARY DISTRICT
APPROVING THE RELEASE AND SETTLEMENT AGREEMENT
RELATING TO THE ORANGE COUNTY BANKRUPTCY AND AUTHORIZING
THE TREASURER TO RECEIVE THE DISTRIBUTION OF MONIES
Whereas, the Costa Mesa Sanitary District is an Option A Pool Participant, as that
term is defined in the Second Amended Plan of Adjustment ( "Plan ") for the County of
Orange ( "County ");
Whereas, the Representative, as that term is used in the Plan, has served a Notice
of Motion and Motion of the Representative for Order Approving (1) Distribution of Net
Litigation Proceeds; (2) Distribution in respect of Assigned Excluded Claims; (3) The
representative's Fee; (4) Certain Other Actions of the Representative; and (5) The
Representative's Final Report ( "Final Report Motion ");
Whereas, the Pool Committee and the County have served a Notice of Motion and
Joint Motion for Order Approving Compromise Regarding Additional Funds and
Reclassification of Claims ( "Additional Funds Motion "), which motion describes the
proposed division of certain "Additional Funds "; and
Whereas, the Costa Mesa Sanitary District is entitled to a distribution ,of Net
Litigation Proceeds, Additional Funds and other funds as described in the Final report
Motion and the Additional Funds Motion.
NOW, THEREFORE,
BE IT RESOLVED; That District Treasurer Marc Puckett is hereby designated to
receive all distributions made pursuant to (i) the Final Report Motion or any order of the
Bankruptcy Court relating thereto; and/or (ii) the Additional Funds Motion or any order
of the Bankruptcy Court relating thereto.
RESOLVED FURTHER that all distributions to which the Costa Mesa Sanitary
District is entitled under or pursuant to the Final Report Motion and/or the Additional
Funds Motion should be delivered to District Treasurer Marc Puckett.
RESOLVED FURTHER that the form of the Release and Settlement Agreement
which is attached to the Additional Funds Motion be and hereby is approved, and that the
President and Secretary be and hereby are authorized and directed to execute and deliver
the Release and Settlement Agreement on behalf of the Costa Mesa Sanitary District.
PASSED AND ADOPTED by the Board of Directors of the Costa Mesa Sanitary
District at a regular meeting thereof held on the 160,day of 2000.
President ",;21.1
Secret
STATE OF CALIFORNIA)
COUNTY OF ORANGE ) SS
CITY OF COSTA MESA )
I, Joan Revak, Clerk of the Costa Mesa Sanitary District, hereby certify that the
above and foregoing Resolution No. 2000 -632, was duly and regularly passed and
adopted by said Board of Directors at a regular meeting thereof held on the 10th day of
February 2000.
IN WETNESS WHEREOF, I have hereunto set my hand and affixed the seal of
the Costa Mesa Sanitary District, this 10th day of February .2.00!) A ,
Clerk of e;C:.osta Mesa`. Sanitary District
CERTFICATE OF ADOPTION OF AUTHORIZING RESOLUTION
The undersigned is the duly appointed District Clerk of the Costa Mesa Sanitary
District (the "Option A Pool Participant "). At a duly held meeting of the Board of
Directors of the foregoing Option A Pool Participant held on February 10, 2000, the
following resolutions were duly adopted.
Whereas, the Costa Mesa Sanitary District is an Option A Pool Participant, as that
term is defined in the Second Amended Plan of Adjustment ( "Plan ") for the County of
Orange ( "County ");
Whereas, the Representative, as that term is used in the Plan, has served a Notice
of Motion and Motion of the Representative for Order Approving (1) Distribution of Net
Litigation Proceeds; (2) Distribution in respect of Assigned Excluded Claims; (3) The
representative's Fee; (4) Certain Other Actions of the Representative; and (5) The
Representative's Final Report ( "Final Report Motion ");
Whereas, the Pool Committee and the County have served a Notice of Motion and
Joint Motion for Order Approving Compromise Regarding Additional Funds and
Reclassification of Claims ( "Additional Funds Motion "), which motion describes the
proposed division of certain "Additional Funds "; and
Whereas, the Costa Mesa Sanitary District is entitled to a distribution of Net
Litigation Proceeds, Additional Funds and other funds as described in the Final report
Motion and the Additional Funds Motion.
NOW, THEREFORE,
BE IT RESOLVED: That District Treasurer Marc Puckett is hereby designated to
receive all distributions made pursuant to (i) the Final Report Motion or any order of the
Bankruptcy Court relating thereto; and/or (ii) the Additional Funds Motion or any order
of the Bankruptcy Court relating thereto.
RESOLVED FURTHER that all distributions to which the Costa Mesa Sanitary
District is entitled under or pursuant to the Final Report Motion and/or the Additional
Funds Motion should be delivered to District Treasurer Marc Puckett.
RESOLVED FURTHER that the form of the Release and Settlement Agreement
which is attached to the Additional Funds Motion be and hereby is approved, and that the
President and Secretary be and hereby are authorized and directed to execute and deliver
the Release and Settlement Agreement on behalf of the Costa Mesa Sanitary District.
Executed this day of 2000.
By: _ c,
ig# fure of Cert tyii g. Officer
Di'str t 'Clerk
Title of Certifying Officer
Costa Mesa Sanitary District
Name of Pool Participant
Settlement Agreement and Limited Release
This Settlement Agreement and Limited Release (this "Settlement
Agreement ") is made this — day of January, 2000, between the County of Orange (the
"County "), the chapter 9 debtor herein, the Official Committee of Investment Pool
Participants (the "Pool Committee ") and each Option A Pool Participant who has
executed a signature page to this Settlement Agreement.
This Settlement Agreement is entered into with reference to the following:
A- On December 61 1994 (the "Petition Date "), the County filed its
voluntary petition under chapter 9 of the Bankruptcy Code, 11 U.S.C. section 101,
et seq- On May 16,1996, the Bankruptcy Court confirmed the County's Modified
Second Amended Plan of Adjustment (the "Plan "). Capitalized terms not defined
herein are intended to have the meanings ascribed to them in the Plan.
B. During the County Chapter 9 Case, several agreements were reached
concerning the interests and rights of the Option A Pool Participants in and to the
funds in the Orange County Investment Pool (the "Pool "). First, on May 2,1995, the
Bankruptcy Court approved the Comprehensive Settlement Agreement (the "CSA "),
which provided for, among other things, a distribution from the Pool of a certain
portion of each Option A Pool Participants' investment balances as of the Petition
Date.
C. In addition, on July 18, 1995, the County, the Pool Committee and each
of the Option A Pool Participants entered into the July 18, 1995 letter agreement (the
"Pool Funds Release Agreement'). A copy of the Pool Funds Release Agreement is
attached hereto as Exhibit B.
D. On April 23,1996, the County and the Option A Pool Participants also
agreed that any funds relating to the liquidation of the pools determined later to exist
would be distributed one -half to the County and one -half to the Option A Pool
Participants, and such distribution would decrease the Option A Pool Participants'
claims under the Plan accordingly. A copy of the April 23,1996 letter agreement is
attached hereto as Exhibit G
E. Approximately $10.3 million in funds is now held in County Fund 695,
and approximately $4.5 million in funds is now held in County Funds 692 and 694.
Together with all interest thereon as calculated and determined by this Settlement
Agreement, the aggregate amount of such funds is agreed to be $17,884,999.53, as of
February 23, 2000, and is defined herein as the "Additional Funds."
F. Approximately 51.8 million is now held in Fund 693, not including
interest, and is defined herein as "Unapportioned Interest,"
G. The County believes that the Pool Funds Release Agreement controls
the disposition of the Additional Funds, and that the Option A Pool Participants have
released any claim they might have had to the Additional Funds. The Pool
Committee contends, among other things, that the April 23, 1996 letter agreement
controls the disposition of the Additional Funds, and that the Additional Funds
should be divided equally between the County and the Option A Pool Participants.
H. Both the County and the Option A Pool Participants agree that the
distribution of the Additional Funds pursuant to this Settlement Agreement would
avoid the expenditure of resources otherwise needed to litigate the issues.
I. Accordingly, the County and the Pool Committee have agreed to treat
the Additional Funds as if they were subject to the April 1996 letter agreement, and to
treat the Unapportioned Interest in the manner consistent with applicable non-
- bankruptcy law, as specified herein.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
each of the parties hereto acknowledges and agrees as follows:
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1. The parties agree that the amount of Additional Funds to be distributed
shall be $17,8$4,999.53, which includes all interest and all other claims to su
and shall be deemed to be the mount to be dish., buted, irrespective of the ids
a
amount of interest earned on such funds; provided, however, that if distribution of the
Additional Funds is not made on February 24, 2000, interest shall accrue from February
24, 2000, until paid, calculated using simple interest at s.2% per annum to the date
immediately preceding the date of distribution
2- One -half of the Additional Funds shall be distributed to the County, free
and clear of claims, liens or encumbrances
3. One-half of the Additional Funds shall be distributed to Op
Participants in respect on A Pool
pect of their Allowed Repayment Claims (Class A -19, C -1, A -20 and
C -2) pursuant to the schedule attached hereto as Exhibit D. If the distribution of
Additional Funds is made on February 24, 2000 as anticipated, the amounts
Column C of Exhubit D will be distributed in accordance therewith. If speahed in
is made on a later date, then the distribution will be made based on the d�sh�bution
specified in Column B of Exhibit D. In � events, the Allowed Repayment Percentages
such Pool Participants shall be reduced dollar for dollar in the amount of Additional
of
Funds and tional
Rutter interest after February 23, 2000, if any, distributed to each such
Option A Pool Participant pursuant to this
Settlement Agreement
4. The Additional Funds distributed to the Option A Pool Participants will
not be considered Litigation proceeds as that term is defined in the Plan_ Accordingly,
the Representative (who has agreed to distribute the funds at the same time as
Litigation Proceeds) shall not be entitled to compensation based on the distribution of
Additional Funds.
5• The Unapportioned Interest plus accrued interest thereon will be
distributed based upon the County's 1995 -1996 Property Tax Unapportioned Interest
allocation.
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6. The parties' obligations under this Settlement Agreement are contingent
upon the Bankruptcy Court's approval of the motion to approve the Settlement
Agreement and 4L relief sought therein by an order that shall have become a Final
Order no later than February 24, 2000, or such later date as the County and the Pool
Committee may agree in writing.
7. As a condition to receiving its distribution of Additional Funds, each of
Option A Pool Participants who receives a distribution of Additional Funds shall
execute this Settlement Agreement and thereby shall release any claims to the
Additional Funds, which "Released Claims" are defined to include (a) any and all
claims, whether secured, unsecured, priority, administrative or otherwise, demands,
obligations, liabilities, indebtedness, responsibilities, disputes, breaches of contract,
breaches of duty or any relationship, acts, omissions, misfeasance, malfeasance, cause
or causes of action (whether at law or in equity), debts, sums of money, accounts,
compensations, contracts, controversies, promises, damages, costs, rights of offset,
losses and expenses, of every type, kind, nature, description or character, known and
unknown, whensoever arising occurring at any time up to and through the date hereof,
whether known or unknown, suspected or unsuspected, liquidated or unliquidated,
matured or unmatured, fixed or contingent, including but not'limited to principal,
interest, charges, fees, minimum commissions and other obligations, rights and
remedies which in any way relate to the Additional Funds, including without
limitation the calculation of principal and interest thereon. Released Claims do not
include any claims that do not in any way relate to the Additional Funds.
8. Each Option A Pool Participant and the Pool Committee and each of their
predecessors, successors and assigns (each, a "Releasing Party "), hereby fully, finally,
irrevocably, forever and unconditionally release, discharge and acquit the County and
every other Option A Pool Participant who receives a portion of the Additional Funds
under the Settlement Agreement of and from all Released Claims, except for the rights
and obligations under this Settlement Agreement.
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9. Waiver of Statutory Benefits. The parties intend that the foregoing
releases shall be effective as a full and final accord and satisfaction of Released Claims,
and each of the parties hereby agrees, represents and warrants that the matters released
herein are not limited to matters which are known or disclosed. In this connection,
each Releasing Party hereby agrees, represents and warrants that it realizes and
acknowledges that (a) factual matters now existing and unknown to it may have given
or may hereafter give rise to Released Claims which are presently unknown,
unsuspected, unliquidated, unsnatured and /or contingent, (b) such Released Claims
may be unknown, unsuspected, unliquidated, unmatured and /or contingent due to
ignorance, oversight, error, negligence or otherwise, and (c) if such Released Claims
had been known, suspected, liquidated, matured and /or unconditional, such party's
decision to enter into this release may have been materially affected. Each Releasing
Party further agrees, represents and warrants that this release has been negotiated and
agreed upon in view of these realizations. Nevertheless, each Releasing Party hereby
intends to release, discharge, and acquit the County of and from any such unknown,
unsuspected, to quidated, unmatured and /or contingent Released Claims which are
in any way set forth in or related to the matters identified hereinabove. EACH
RELEASING PARTY HEREBY EXPLICITLY WAIVES ALL RIGHTS UNDER AND
ANY BENEFITS OF ANY COMMON LAW OR STATUTORY RULE OR PRINCIPLE
WITH RESPECT TO THE RELEASE OF SUCH CLAIMS, INCLUDING, WITHOUT
LIMITATION, SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH
PROVIDES AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH A CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS FAVOR AT THE TRAE OF EXECLTnNG
THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE
MATERIALLY AFFECTED HIS SE I IT EMENT WITH THE
DEBTOR.
k,
EACH RELEASING PARTY AGREES THAT NO SUCH COMMON LAW
OR STATUTORY RULE OR PRINCIPLE, INCLUDING SECTION 1542 OF THE
CALIFORNIA CIVIL CODE, SHALL AFFECT THE VALIDITY OR SCOPE OR ANY
OTHER ASPECT OF THLS RELEASE.
10. Further Assurances. From time to time, at the request of any party hereto
and without further consideration, the other parties will execute and deliver to such
requesting party such documents and take such other action as such requesting party
may reasonably request in order to consummate more effectively the releases
contemplated hereby.
11. No AssigELment Each Releasing Party agrees, represents, and warrants
that it has not voluntarily, by operation of law or otherwise, assigned, conveyed,
transferred or encumbered, either directly or indirectly, in whole or in part, any right to
or interest in any of the Released Claims.
12. Choice of Law; Severability. This Settlement Agreement shall be
governed by and construed in accordance with the laws of the State of California as
applied to agreements among parties resident therein. Whenever possible, each
provision of this Settlement Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Settlement
Agreement shall be prohibited by or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Settlement
Agreement.
13. Advice of Counsel. Each party has had advice of independent counsel of
its own,choosing in negotiations for and the preparation of this Settlement Agreement,
has read this Settlement Agreement in full and final form, and has had this Settlement
Agreement fully explained to it to its satisfaction.
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.J 14. No Third Party Beneficiaries. This Settlement Agreement is executed for
the benefit of the parties hereto, and no other person, corporation, partnership,
individual or other entity not a party to this Settlement Agreement shall have any
rights herein as a third party beneficiary or otherwise, except to the extent expressly
and specifically provided herein.
15. Counterparts. This Settlement Agreement may be executed in duplicates
and counterparts, which, taken together, will be deemed and serve as an original. In
addition, the parties agree that their authorized representatives may bind them to the
terms of this Settlement Agreement with signatures exchanged by fax, and each
duplicate faxed signature copy shall be deemed to be an original of this Settlement
Agreement.
16. Entire Agreement. This is the entire Settlement Agreement between the
parries with respect to this matter, There are no other agreements or understandings,
written or oral, express or implied.
IN WITNESS WHEREOF, the parties have caused. this Settlement
Agreement to be executed and delivered by their duly authorized representatives.
Dated: January _, 2000
Dated: January 2000
PILLSBURY, MADISON & SUTRO
By:
Patrick C. Shea
Attorneys for Official Committee of
Investment Pool Participants
OFFICIAL COMIvII= OF
INVESTMENT POOL PARTICIPA.NIS
By:
Name:
Its:
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Dated: January_, 2000 HENNIGAN, MERCER & BENNETT
By:
John L. Amsden
Reorganization Counsel for the County
Dated: January_, 2000 THE COUNTY OF ORANGE
By:
Name:
Its:
Agreed and Acknowledged:
February 10 2000 OPTION A POOL PARTICIPANT
Name: Costa Mesa Sanitary District
Its:
By:
G
Y -
Its: SecretauL_
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