in 1975 and $800,000 per year thereafter for 53 years. I have concluded, for the reasons set forth in the Opinion in support of Order Nos. 867 and 868, that the sale and settlements are in the best interest of the Debtor's estate.
The agreements involved here were negotiated at length before their presentation to this Court. The agreements presented contained the condition that they would be effective only so long as the orders authorizing them had not been stayed. (This provision was inserted for understandable reasons: the purchaser of the property must consummate the transaction quickly, the Debtor's Trustees have a pressing need for the cash they will obtain, particularly after the recent disastrous floods and, no doubt, the value of the bargain to the New Haven trustee and to the B & A bondholders would have been substantially vitiated by the possibility of significant delays in receiving their money.)
Since the agreements contained this provision, a necessary foundation for authorizing the Trustees to proceed with the transactions was the finding that if the orders of authorization were later appealed and reversed, and, in the meantime, the transactions had been consummated, no irreparable injury would have been sustained by the appellants. By their present motion these indenture trustees are, in effect, applying for a reconsideration of that determination.
It can be argued that, if the transactions are consummated, irreparable injury might accrue to these indenture trustees in two ways. First, if administration expenses mount to the point where they equal or exceed the value of the assets of the estate, the B & A bondholders and the New Haven trustee will have received more than their share of the estate. However, I find this circumstance so highly improbable that it cannot form the basis for a finding of possible irreparable injury. This Court is clearly in a position to prevent such occurrence.
Even if the less extreme eventuality occurred, that administration expenses rose to the level that they partially consumed the security of secured parties, it is difficult to envision how the parties to the settlement agreement will have been preferred. The remaining security for the B & A bonds and for the New Haven's claims is very large. Expenses of administration would have to approach total consumption of the estate before the value of the property left to secure the claims of these two parties dropped below the amounts to be paid out to them now. Thus, irreparable injury cannot be found in this hypothesis either.
A more persuasive argument for a finding that irreparable harm might occur is that by interim consummation of these transactions the B & A bondholders and the New Haven trustee will have been put in a more favorable position vis-a-vis other secured creditors because they will have had present use of money to which they are entitled while the other creditors will have to wait a substantial period of time before they get the money to which they are entitled. It is pointed out, for example, that the B & A bondholders would be entitled to only 4 1/2% interest on their bonds in a plan of reorganization, whereas they could no doubt obtain a higher return in the present money market.
However, assuming that the parts of the orders authorizing a settlement are reversed, this benefit is one that could easily be rescinded. Both parties still have secured claims against the estate which are larger than the amounts they will now receive. If it is later held that these parties should not have received any payment now, the benefits they will have received are quantifiable, and appropriate adjustments may be made in the treatment of these parties in whatever plan is ultimately to be carried out, so as to put them on an economic par with other creditors. For the foregoing reasons, I have concluded that the settlement agreements may be consummated without the possibility of irreparable harm occurring to the moving parties and, therefore, the motion for a stay will be denied.
It bears emphasis that neither the present movants nor any other interested party challenges the desirability of the underlying sale of assets. The immediate effectuation of the settlement agreements is a condition precedent to the validity of this Court's approval of the sale. To stay the order approving the settlement agreements would jeopardize a transaction which all agree is in the best interests of the estate, and would probably moot the very appeals movants seek to pursue; whereas denial of the requested stay would fully preserve their rights for meaningful appellate review, with no genuine possibility of irreparable harm.
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