UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
February 24, 2009
IN RE: STONE & WEBSTER, INCORPORATED, ET AL., DEBTORS
SAUDI AMERICAN BANK
SHAW GROUP, INC.; SWINC ACQUISITION THREE, INC.; SWE&C LIQUIDATING TRUSTEE, SUCCESSOR TO STONE & WEBSTER ENGINEERING CORPORATION, ET AL. SHAW GROUP, INC., APPELLANT
Appeal from the United States District Court for the District of Delaware (D.C. Civil Action No. 04-cv-00834) District Judge: Honorable Sue L. Robinson.
The opinion of the court was delivered by: Ambro, Circuit Judge
Argued April 18, 2008
Before: SCIRICA, Chief Judge, AMBRO and FISHER, Circuit Judges
OPINION OF THE COURT
Stone & Webster, Incorporated ("Stone & Webster") and its subsidiaries-including Stone & Webster Engineering Corporation ("SW Engineering")-filed for Chapter 11 bankruptcy protection in the District of Delaware. Shortly thereafter, Stone & Webster and its subsidiaries entered into an asset purchase agreement ("Purchase Agreement") with the Shaw Group, Inc. ("Shaw") to sell substantially all of their assets. The District Court approved the Purchase Agreement in a Sale and Assumption Order ("Sale Order").
At issue is whether by this transaction Shaw assumed a guaranty obligation of SW Engineering to Saudi American Bank ("SAMBA"). In that rare case where the seller and purchaser agree, SW Engineering and Shaw have argued that the latter did not assume the guaranty.*fn1 SAMBA contends otherwise.
The District Court, through a different Judge than the one who entered the Sale Order, agreed with SAMBA's view and granted summary judgment in its favor. In separate proceedings, the Court also awarded SAMBA pre- and post-judgment interest on the guaranteed debt, as well as attorneys' fees and other litigation costs.
Because we believe the Court misinterpreted the Purchase Agreement and Sale Order, we reverse its grant of summary judgment. While this decision further requires us to vacate the award of pre- and post-judgment interest, attorneys' fees and other litigation costs, we note our agreement with the Court's analysis of those issues.
I. Factual and Procedural Background
In 1980, SW Engineering formed a joint venture with Abdullah Said Bugshan & Bros. ("Bugshan"), a Saudi Arabian company. The joint venture obtained a contract with the Saudi Arabian American Oil Company ("Aramco") to upgrade an oil refinery at Ras Tanura in Saudi Arabia (known as the "in-kingdom project" or "project number 65004/00"). In a separate contract, SW Engineering agreed to provide manufactured goods to Aramco for use at Ras Tanura (called the "out-of-kingdom project" or "project number 05062011").
To fund the in-kingdom project, the joint venture borrowed $35,000,000 from SAMBA. Bugshan and SW Engineering facilitated the granting of this loan by individually guarantying 50% of the amount owed by the joint venture to SAMBA (in the case of SW Engineering, the "Guaranty"). See Saudi American Bank v. Shaw Group, Inc. ("Saudi American Bank I"), No. 00-2142, 2005 WL 1036556, at *1 (D. Del. May 3, 2005). Following completion of the in-kingdom project, the joint venture was unable to repay the loan and SW Engineering and Bugshan began making payments pursuant to their guaranties. SW Engineering confirmed its obligation to pay this debt in a 1998 payment letter to SAMBA (the "Payment Letter").
When Stone & Webster and its subsidiaries filed their bankruptcy petitions in 2000, SW Engineering owed SAMBA $6,728,549 on the Guaranty. Shortly after those filings, Shaw purchased substantially all of the Stone & Webster entities' assets through an auction sale. The companies stated the terms of this sale in the Purchase Agreement.
That document, which states that it is governed by Delaware law, labels the assets and liabilities of the sellers as either "assumed" by Shaw or "excluded" from the deal. As is typical, assumed assets and liabilities are those not excluded from the Purchase Agreement. Thus the definitions of Excluded Assets and Excluded Liabilities have controlling importance.
Section 2.02 of the Purchase Agreement defines "Excluded Assets" as all Rejected Contracts, Completed Contracts, and Special Project Claims.
* "Rejected Contracts" are any contracts or related obligations listed by Stone & Webster on Schedule 5.16(b). That schedule lists fifteen projects, none of which relates to SW Engineering's work at the Ras Tanura facility.
* "Completed Contracts" and their related receivables and drawings are "those specifically set forth on Schedule 2.02(b), under which substantially all of the contractual work effort of Sellers has been completed." Included within Schedule 2.02(b) is a notation of the in-kingdom project name, Aramco Ras Tanura (Bugshan), but with the out-of-kingdom project number, 05062011.
* "Special Project Claims" are "any and all claims under the project agreements set forth on Schedule 2.02(e)." That schedule lists the "Ras Tanura, Saudi Arabia, Refinery Upgrade Project," specifically noting the in-kingdom project number (65004/00) and the presence of "one or more potential claims for payment under a series of Letters of Credit issued by [SAMBA]."
The Purchase Agreement defines "Excluded Liabilities" in § 1.01 as
any and all liabilities or obligations of [Stone & Webster and its subsidiaries] of any kind or nature, other than the Assumed Liabilities, including those liabilities or obligations described in Section 2.04, whether known or unknown, fixed or contingent, recorded or unrecorded, and whether arising before or after the Closing, including . . . surety or other bonds relating to Completed Contracts or Rejected Contracts.
App. at A118. In addition, § 2.04 notes that "Excluded Liabilities" are "liabilities or obligations associated with any Excluded Assets" or "associated with any and all indebtedness of [Stone & Webster and its subsidiaries] for borrowed money not included in the Assumed Liabilities." The phrase "liabilities or obligations" is not defined, but provisions of the Purchase Agreement indicate, as one would expect, that guaranties are liabilities.*fn2
Perhaps because the parties were unsure which assets and liabilities were being transferred to Shaw, Sections 2.07 and 5.17 of the Purchase Agreement permit Stone & Webster and its subsidiaries to amend schedules "to reflect any changes required as a result of the addition of applicable Subsidiaries" and to execute any new documents "that may be reasonably necessary or desirable." Id. at A133, A158. Section 7.01(a) further explains that any added or amended schedule is "deemed to have been made and delivered as of the Effective Date [of the Purchase Agreement]." Id. at A163.
After reviewing the Purchase Agreement, the District Court approved the sale of Stone & Webster's assets in the Sale Order.*fn3 The Order adopts "all of the terms and conditions" of the Purchase Agreement, but it adds protections for third parties claiming repayment rights under a contract or asset assumed by Shaw. For example, it states that Shaw "will cure . . . any default existing prior to the date hereof under any of the Assumed Contracts." Id. at A432 (Paragraph S of the Order). It also states that "all rights and remedies of any non-debtor party or Shaw under any of the Assumed Contracts . . . are fully preserved and shall be fully enforceable after the Closing against Shaw or the non-debtor party . . . ." Id. at A437 (Paragraph 12 of the Order). No party objected to the addition of these terms.
Following conclusion of the asset sale, SAMBA filed a cure claim against SW Engineering for payment of $6,728,549 pursuant to the Guaranty.*fn4 Shaw did not contest this claim until it filed its Second Omnibus Objection to Claims in April 2001. See id. at A1078--90. SAMBA thereafter filed suit against Shaw and SW Engineering in the Bankruptcy Court for the District of Delaware. SAMBA asked the Court to determine that the Guaranty and Payment Letter were Assumed Liabilities for which Shaw was responsible, or, in the alternative, to allow SAMBA's cure claim as an unsecured claim against SW Engineering. After successfully moving for a withdrawal of the proceeding to the District Court, Shaw answered SAMBA's claim with a motion for summary judgment.*fn5 Shaw alleged that SAMBA lacked standing to sue under the Purchase Agreement and claimed that SW Engineering's Guaranty and Payment Letter were Excluded Liabilities for which Shaw was not responsible.*fn6 SAMBA counterclaimed with its own motion for summary judgment.
The District Court granted SAMBA's summary judgment motion and denied that of Shaw. In reaching its decision, the Court made two principal rulings. First, it held that SAMBA had standing to bring its suit. See Saudi American Bank I, 2005 WL 1036556, at *5 n.11. Second, it determined that "the Guaranty and Payment Letter are contracts that were assumed by defendant Shaw by operation of the [Purchase Agreement] and [Sale Order]." Id. at *7. The Court believed the Guaranty and Payment Letter were "separate contract[s]" that were not "unambiguously" listed as Excluded Assets or Excluded Liabilities under the Purchase Agreement. Id. at *6--7. In so reasoning, it rejected Shaw's argument that the Guaranty and Payment Letter were excluded by association with the in-kingdom project's listing as a Completed Contract or a Special Project Claim. The Court considered only the Purchase Agreement and Sale Order in reaching its decision. Among the evidence it did not consider was the declaration of James P. Carroll, the President and Chief Restructuring Officer for Stone & Webster, who supported Shaw's claim that the Guaranty and Payment Letter were Excluded Liabilities.*fn7 See id. at *5 n.10.
In separate, but related, adversary proceedings, the District Court considered whether Shaw, as the party the Court ruled to have assumed the Guaranty, owed SAMBA pre- and post-judgment interest, attorneys' fees and related costs under the terms of the Guaranty. See Saudi American Bank v. Shaw Group, Inc. ("Saudi American Bank II"), 354 B.R. 686, 688--93 (D. Del. 2006). On the matter of pre-judgment interest, the Court applied New York law and held that the Guaranty set an interest rate of 9%. See id. at 690--91. It also awarded SAMBA $345,714.50 in attorneys' fees along with $20,750.00 in costs. See id. at 692; Saudi American Bank v. Shaw Group, Inc. ("Saudi American Bank III"), 360 B.R. 64, 67 (D. Del. 2007). Lastly, the Court awarded SAMBA post-judgment interest at a rate of 3.33%. See Saudi American Bank II, 354 B.R. at 693.
Shaw appealed the decisions of the District Court. We consolidated the cases for review.
II. Jurisdiction and Standard of Review
The District Court had jurisdiction under 28 U.S.C. §§ 157 and 1334. We have jurisdiction under 28 U.S.C. § 1291.
We exercise plenary review over the District Court's grant of summary judgment. Atkinson v. Lafayette Coll., 460 F.3d 447, 451 (3d Cir. 2006). Summary judgment is appropriate if there is "no genuine issue as to any material fact" and the party making the motion "is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322--23 (1986). "In determining whether a genuine issue of fact exists, we resolve all factual doubts and draw all reasonable inferences in favor of the nonmoving party." Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 140 (3d Cir. 2004). We may affirm or vacate the District Court's judgment on any grounds supported by the record. In re Teleglobe Commc'ns Corp., 493 F.3d 345, 385 (3d Cir. 2007).
We engage in plenary review of questions of contract interpretation. See Jumara v. State Farm Ins. Co., 55 F.3d 873, 880--81 (3d Cir. 1995).
As different District Judges were involved in approving the Purchase Agreement by the Sale Order and in interpreting that Order, this is not a case where the District Judge is afforded special deference in interpreting her own order.
We review three issues: (1) whether the District Court erred in holding that SAMBA had standing to bring a claim against Shaw; (2) whether summary judgment in favor of SAMBA was proper; and (3) whether the Court correctly awarded SAMBA pre- and post-judgment interest, attorneys' fees and other costs of litigation.
In determining whether SAMBA has standing to sue under the Purchase Agreement for payment of SW Engineering's guaranty of the in-kingdom project loan, Shaw focuses on § 10.08 of the Purchase Agreement. It states:
No Third Party Beneficiary. The terms and provisions of this Agreement . . . are intended solely for the benefit of the parties . . . and their respective successors and permitted assigns, and are not intended to confer third-party beneficiary rights upon any other Person.
Shaw argues that this provision, typical in sale-of-asset agreements, denies SAMBA standing as a third-party beneficiary by stating that only the debtors (i.e., the Stone & Webster entities) have standing to sue Shaw under the Purchase Agreement. According to this argument, SAMBA should have brought its claim for payment of the Guaranty and Payment Letter only against SW Engineering, which could then have sought indemnification from Shaw if it paid SAMBA and believed that the Guaranty and Payment Letter were assumed by Shaw.*fn8
Shaw's argument is no doubt plausible. "Ordinarily, a stranger to a contract acquires no rights thereunder." Guardian Constr. Co. v. Tetra Tech Richardson, Inc., 583 A.2d 1378, 1386 (Del. Super. Ct. 1990). According to Delaware law, which governs the Purchase Agreement, "to qualify as a third party beneficiary of a contract, (a) the contracting parties must have intended that the third party beneficiary benefit from the contract, (b) the benefit must have been intended as a gift or in satisfaction of a pre-existing obligation to that person, and (c) the intent to benefit the third party must be a material part of the parties' purpose in entering into the contract." E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 196 (3d Cir. 2001). In this case, we are not aware of evidence that Shaw intended to confer direct benefits to SAMBA through the Purchase Agreement; in fact, § 10.08 makes clear that Shaw did not intend to give enforceable rights to any third party. Thus, on the basis of the Purchase Agreement alone, SAMBA arguably does not have standing.
The Purchase Agreement, however, is not the only document relevant to determining SAMBA's rights. The Sale Order approving the Purchase Agreement includes language protecting the rights of third parties. Paragraph 12 of the Order states that "all rights and remedies of any non-debtor party or Shaw under any of the Assumed Contracts . . . are fully preserved and shall be fully enforceable after the Closing against Shaw or the non-debtor party . . . ." App. at A437. This language supersedes § 10.08 of the Purchase Agreement. See Caldwell Trucking PRP v. Rexon Tech. Corp., 421 F.3d 234, 245 (3d Cir. 2005) (explaining that "general, boilerplate language" prohibiting third-party actions "must yield to the specific direction" of separate contractual provisions granting third parties enforceable rights in assumed liabilities); see also In re Safety-Kleen Corp., 380 B.R. 716, 740 (D. Del. 2008) ("When a buyer expressly assumes liabilities of a seller, it becomes directly liable therefore, regardless of any language in the sale agreement otherwise purporting generally to disclaim third-party beneficiary rights.").
In this context, SAMBA, a non-debtor, has standing to claim that Shaw has assumed SW Engineering's guaranty of the in-kingdom project loan. We therefore affirm the District Court's determination of this issue.*fn9
B. Summary Judgment
Based on the standard already noted, summary judgment is appropriate if no genuine issue of material fact exists over whether Shaw assumed SW Engineering's guaranty of the in-kingdom project loan. Settling this issue requires us to ascertain the intentions of Shaw and the Stone & Webster entities as set out in the Purchase Agreement and Sale Order. See Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del. 1997). The District Court determined that these documents unambiguously proved that "the Guaranty and Payment Letter are contracts that were assumed by defendant Shaw." Saudi American Bank I, 2005 WL 1036556, at *7. We reach the opposite conclusion.
In its review of the Purchase Agreement and Sale Order, the District Court considered only whether the Guaranty and Payment Letter were specifically listed as Excluded Liabilities. It did not question whether they were excluded by way of association with the excluded in-kingdom project. The Court decided not to consider this possibility based on its application of the "fundamental premise that a guaranty 'is a separate contract . . . from the basic contract to which it is collateral.'" Id. at *6 (quoting FinanceAmerica Private Brands, Inc. v. Harvey E. Hall, Inc., 380 A.2d 1377, 1379 (Del. Super. Ct. 1977)). This premise, it concluded, controlled interpretation of the parties' agreements.
We disagree with the Court's premise that the Guaranty and Payment Letter's association with the in-kingdom project is irrelevant to their classification as assumed or excluded liabilities. To be sure, case law establishes that "a guaranty and the underlying contract are separate contracts." Saudi American Bank I, 2005 WL 1036556, at *6 n.12. But that law does not answer whether the parties intended to include the Guaranty and Payment Letter under a listing of the in-kingdom project.
Instead, the general law of contract, that agreements are enforced "in accord with their makers' intent," must control. MBIA Ins. Corp. v. Royal Indem. Co., 426 F.3d 204, 210 (3d Cir. 2005). In this case, the parties expressed a clear intent to associate guaranties and other liabilities or obligations with their underlying contracts.
As discussed, the Purchase Agreement contains several sections that define liabilities as excluded based on their association with excluded contracts. Section 2.04, as noted above in part, describes "Excluded Liabilities" as
(a) liabilities . . . other than Assumed Liabilities; . . . (c) liabilities or obligations associated with any Excluded Assets; (d) liabilities or obligations associated with any and all indebtedness of [Stone & Webster and its subsidiaries] for borrowed money not included in the Assumed Liabilities; [and] (e) liabilities or obligations under the Assumed Contracts that are not Assumed Liabilities and liabilities or obligations arising under the Rejected Contracts or the Completed Contracts.
App. at A129. Under clauses (c), (d), or (e), a liability need only be "associated with" an Excluded Asset or a debt not an Assumed Liability, or "aris[e] under" a Rejected or Completed Contract, to qualify as an "Excluded Liability." Excerpts from the transcript of the Sale Order hearing further indicate that the parties and the Court understood that a listing of an excluded contract also included "all liabilities arising under th[at] . . . contract." Id. at A792; see also id. at A762, A767--75, A789. Thus, the Guaranty and Payment Letter may be Excluded Liabilities if the in-kingdom project with which they are associated is listed as an Excluded Asset.*fn10
Recognizing the importance of whether the in-kingdom project is an assumed or excluded liability, our review turns to the schedules that identify the three types of Excluded Assets: Rejected Contracts, Completed Contracts, and Special Project Claims.
First, all parties agree that the in-kingdom project is not a Rejected Contract. Schedule 5.16(b) of the Purchase Agreement lists the Rejected Contracts and contains no mention of the in-kingdom project.
Second, the in-kingdom project's status as a Completed Contract is ambiguous. Completed Contracts, to repeat, are "those specifically set forth on Schedule 2.02(b), under which substantially all of the contractual work effort of [the Stone & Webster entities] has been completed." Id. at A117. To repeat, Schedule 2.02(b) references the in-kingdom project name, Aramco Ras Tanura (Bugshan)/Refinery Upgrade, but does so in conjunction with the out-of-kingdom project number, 05062011. See id. at A196. Shaw argues that this reference proves that the parties meant to exclude both contracts. See Shaw's Br. at 15--16. SAMBA asserts that the project number should control and faults Shaw and SW Engineering for not clarifying the schedule. See SAMBA's Br. at 18--19, 53--54; Or. Arg. Tr. at 17. We are not convinced either way. The listing of the in-kingdom project name is significant, but the record does not show conclusively what the parties to the Purchase Agreement intended it to mean.
Third, the schedule of Special Project Claims unambiguously lists the in-kingdom project as an Excluded Asset. Schedule 2.02(e) excludes "any and all claims and liabilities" related to the "Ras Tanura, Saudi Arabia, Refinery Upgrade Project," and specifies the in-kingdom project. App. at A212. In particular, the schedule lists:
Contract for Construction dates as of June 28, 1994 by and between Saudi Arabian Oil Company ("Saudi Aramco") and BS&W [the joint venture] (designated by Saudi Aramco as Contract No. 65004/00). . . .
Contract retainage due to BS&W [the joint venture] in the amount of $5,757,000 on Contract No. 65004/00 . . . . . . .
One or more potential claims for payment under a series of Letters of Credit issued by Saudi American Bank . . . .
Id. This listing is decisive. It excludes the in-kingdom project by name and number, and it makes clear that the Stone & Webster entities retain the claims and liabilities of the Ras Tanura Upgrade Project. The in-kingdom project is thus an Excluded Asset under the Purchase Agreement, and the Guaranty and Payment Letter are Excluded Liabilities because they are associated with that Excluded Asset.*fn11
The conclusion that the Guaranty and Payment Letter are Excluded Liabilities by way of association with an excluded Special Project Claim is further supported by SW Engineering's stated Answer, Affirmative Defenses, and Counterclaims to SAMBA's initial complaint. Denying that the Guaranty and Payment letter were assumed by Shaw, SW Engineering asserted:
Both the [Payment] Letter and the 1994 Guarantee are Special Project Claims (as defined in section 1.01 and on schedule 2.02(e) of the [Purchase Agreement]), defined as "[a]ny and all claims or liabilities available at law or in equity, or arising under the project agreements in Saudi Arabia for the Ras Tanura Refinery Upgrade Project ("RTRUP")-Package 2-Utilities . . . ."
[Purchase Agreement] at schedule 2.02(e). . . . Under the specific terms of the [Purchase Agreement], the Special Project Claims are Excluded Assets (as defined therein) and were not assumed by the Shaw Parties . . . . Additionally, any liabilities or obligations associated with any Excluded Assets (including the Special Project Claims) are Excluded Liabilities (as defined in the [Purchase Agreement]) and were not assumed by the Shaw Parties.
SW Engineering's Answer, Affirmative Defenses, and Counterclaims, Saudi American Bank v. Shaw Group, Inc. (In re Stone & Webster, Inc.), Ch. 11 Case No. 00-02142, Adv. No. 01-07766, at 10--11 (Bankr. D. Del. Oct. 29, 2001) (emphasis added). Rarely is such a clear statement offered by a debtor against its interests. By refusing to claim that Shaw was obligated to pay the balance of SAMBA's loan, SW Engineering eliminated its surest avenue to avoiding liability for the debt and reinforced the status of the Guaranty and Payment Letter as Excluded Liabilities.
In concluding that Shaw did not assume liability for SW Engineering's guaranty of the in-kingdom project loan, we additionally reject SAMBA's assertions that the Guaranty and Payment Letter are Assumed Liabilities or Assumed Contracts. These assertions rely on unreasonable interpretations that do not overcome the unambiguous language of the Purchase Agreement and Sale Order.
To begin, SAMBA's attempt to label the Guaranty and Payment Letter as Assumed Liabilities under Schedules 2.03 and 3.17(a)(ix) is misleading. Schedule 2.03 states that Assumed Liabilities include "[l]iabilities under [the Stone & Webster entities'] outstanding bank indebtedness" and "other liabilities related to the . . . Assumed Contracts." App.at A199. Schedule 3.17(a)(ix) lists all of the Stone & Webster entities' indebtedness "relating to the borrowing of money or indirect guarantee[s]." Id. at A139. Included within Schedule 3.17(a)(ix) is a listing for a letter of guaranty dated September 1, 1992 from SW Engineering to SAMBA for $5,000,000, and a letter of guaranty dated October 19, 1992 from SW Engineering to SAMBA for repayment of 40,000,000 Saudi Riyals. Id. at A282--83.
Reading these schedules somehow to include the Guaranty, SAMBA asserts that they provide "undisputed evidence . . . that [SW Engineering]'s obligation to SAMBA constitutes [an Assumed Liability] under [SW Engineering]'s outstanding bank indebtedness." SAMBA's Br. at 21. This overstatement underwhelms, as neither of the guaranties referenced in Schedule 3.17(a)(ix) is related to the Guaranty, which was issued October 11, 1994, for $35,000,000-not September 1992 for $5,000,000 or October 1992 for 40,000,000 Saudi Riyals (as noted, the dates and amounts of the guaranties listed in Schedule 3.17(a)(ix)). See App. at A73--76, A92--93.
SAMBA claims that this discrepancy is unimportant because "Shaw has admitted that it assumes that the guaranty listed on Schedule 3.17(a)(ix) incorporates the Guaranty." SAMBA's Br. at 22. This statement misrepresents Shaw's actual response that it "currently assumes that this is the same guaranty (and it knows of no other), but there appears to be no direct way to confirm (or deny) this point." App. at A496.*fn12
SAMBA is also incorrect in labeling the Guaranty and Payment Letter as Assumed Contracts. The Purchase Agreement defines "Assumed Contracts" as "all Contracts of Sellers (including the Employee Agreements) other than the Rejected Contracts and the Completed Contracts." Id. at A114. SAMBA claims that the Guaranty and Payment Letter fall within this definition because they are "Contracts" under the Purchase Agreement,*fn13 and they are not specifically listed in the schedules of Rejected or Completed Contracts.*fn14 We dismiss this claim as an illogical interpretation of the Purchase Agreement and Sale Order.
"It is a general rule of contract construction to 'consider the entire instrument and attempt to reconcile all of its provisions in order to determine the meaning intended to be given to any portion of it.'" In re IAC/Interactive Corp., 948 A.2d 471, 497 (Del. Ch. 2008) (quoting Wood v. Coastal States Gas Corp., 401 A.2d 932, 937 (Del. 1979)). "Moreover, the meaning which arises from a particular portion of an agreement cannot control the meaning of the entire agreement where such inference runs counter to the agreement's overall scheme or plan." E.I. du Pont Nemours & Co., Inc. v. Shell Oil Co., 498 A.2d 1108, 1113 (Del. 1985).
The overall scheme of the Purchase Agreement and Sale Order, as noted above, is for Shaw to assume all assets and obligations of the Stone & Webster entities except for those listed as Excluded Assets or Excluded Liabilities. SAMBA's labeling of the Guaranty and Payment Letter as "Assumed Contracts" turns that scheme on its head by making Shaw liable for what are Excluded Liabilities via their association with an excluded Special Project Claim (the in-kingdom project).*fn15
Furthermore, were we to extend SAMBA's logic to other Excluded Assets and Excluded Liabilities, we would in effect be reading entire sections and schedules out of the Purchase Agreement. All items only listed as, or associated with, Special Project Claims, for example, would no longer be distinctly excluded because they too would be "Contracts . . . other than the Rejected Contracts and the Completed Contracts." App. at A114 (defining "Assumed Contracts"). To adopt such a far-reaching interpretation would violate "the cardinal rule of contract construction that, where possible, a court should give effect to all contract provisions." E.I. du Pont, 498 A.2d at 1114; see also New Castle County, Del. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 174 F.3d 338, 350 (3d Cir. 1999).
Lastly, we disagree with SAMBA's assertion that the transcripts of the sale hearings show that the Guaranty and Payment Letter are Assumed Liabilities or Assumed Contracts because they were not identified as Rejected or Completed Contracts before entry of the Sale Order. SAMBA assigns particular significance to the representations made by counsel for the Committee of Unsecured Creditors at the sale hearing in July 2000 that
[t]his agreement revolves, in terms of its economics, around three schedules, or let's say two schedules, and whether or not your contract is on one of those two schedules. And those two schedules are the schedule for rejected contracts and the schedule for completed contracts. If they are not on those schedules, in essence, your contract is an assumed contract, and the economic impact to you as a stakeholder is dependent upon whether you are on those two lists . . . .
Saudi American Bank I, 2005 WL 1036556, at *2.
We do not see how this statement establishes with certainty that the Guaranty and Payment Letter are Assumed Contracts or Assumed Liabilities. The statement oversimplifies the terms of the Purchase Agreement, does not discuss the relevance of the "liabilities and obligations" associated with Excluded Assets, and fails to mention the importance of the Special Project Claims. Other statements from the sale hearing transcript, moreover, show that the District Court did not think that the provisions of the Purchase Agreement were settled when it issued the Sale Order. See, e.g., App. at A788 ("I will allow [the parties to adjust the schedules after approval of the Purchase Agreement], with the understanding that we may end up having to deal with adjustments and the economic impact of adjustments."); A798 ("I would rather leave Shaw and the debtor as much flexibility as they can to try and make adjustments, because I understand it is going to be complicated.").
The record is clear: the Guaranty and Payment Letter are Excluded Liabilities because they are associated with the in-kingdom project, which is an excluded Special Project Claim. We therefore reverse the District Court's grant of summary judgment.*fn16
C. Interest, Attorneys' Fees and Other Litigation Costs
Because we reverse the District Court's grant of summary judgment, we must also vacate its subsequent awards to SAMBA, and against Shaw, of pre- and post-judgment interest, attorneys' fees and other litigation costs. We nonetheless agree with the Court's analysis of these issues had they applied to SW Engineering.
With respect to the award of pre-judgment interest, we specifically agree with the District Court's reliance on the Guaranty's choice of New York law and its assignment of a 9% interest rate running from May 31, 2000.*fn17 We likewise concur in the Court's application of 28 U.S.C. § 1961 to establish a 3.33% post-judgment interest rate. See Saudi American Bank II, 354 B.R. at 693.*fn18
Regarding litigation expenses, we approve the Court's determination that the Guaranty's promise of reimbursement for "any and all expenses incurred [by SAMBA] in enforcing [its] rights under this Guaranty" entitles SAMBA to reasonable attorneys' fees and other costs of litigation. Saudi American Bank II, 354 B.R. at 691--3.Any reward recovered under the language of the Guaranty, however, must be limited to the fees and costs directly incurred in enforcing rights against SW Engineering under that instrument. See id. at 692.
We affirm the conclusion of the District Court that SAMBA has standing to challenge the status of its claim under the Purchase Agreement. We reverse the Court's grant of summary judgment to SAMBA, and we vacate its orders requiring Shaw to pay pre- and post-judgment interest, attorneys' fees and other litigation costs. We further remand the matter to the District Court for proceedings consistent with this opinion.