Opinion ID: 615296
Heading Depth: 2
Heading Rank: 2

Heading: The Sterling Bankruptcy Proceedings

Text: On July 16, 2001, more than four years after the acquisition, Sterling filed for Chapter 11 bankruptcy. Throughout the bankruptcy proceedings, Plaintiffs' benefits and premiums under the Sterling Plan remained unchanged. On October 18, 2002, Sterling filed a motion seeking the bankruptcy court's authorization to reject certain executory contracts, including the APA, and on November 13, 2002, the bankruptcy court granted the motion. On November 20, 2002, the bankruptcy court entered an order (the Confirmation Order) confirming Sterling's Plan of Reorganization effective as of December 19, 2002. The Confirmation Order provided: Any retiree benefits within the meaning of 11 U.S.C. § 1114 will be treated as executory contracts and assumed pursuant to Section 7.5 of the Plan [of Reorganization]. Thus, the requirements of 11 U.S.C. § 1129(a)(13) are satisfied. Relatedly, Section 7.5 of the Plan of Reorganization provided in relevant part: Except to the extent (a) previously assumed or rejected by an order of the Bankruptcy Court on or before the Confirmation Date, or (b) the subject of a pending motion to reject filed by [Sterling] on or before the Effective Date, all other employee compensation and benefit programs of [Sterling's], including all pension plans and including all programs subject to Sections 1114 and 1129(a)(13) of the Bankruptcy Code, entered into before or after the Petition Date and not since terminated, shall be deemed to be, and shall be treated as though they are executory contracts that are assumed under the Plan. All pension plans shall continue in effect on and after the Effective Date. Nothing contained herein shall be deemed to modify the existing terms of such employee compensation and benefit programs, including, without limitation, [Sterling's] rights of termination thereunder. Having assumed the Sterling Plan as a benefit program, and having rejected the APA as an executory contract, Sterling emerged from bankruptcy on December 19, 2002.