Court Opinion

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Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

12-30-2008

In Re: Stone
Precedential or Non-Precedential: Non-Precedential

Docket No. 05-2717

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                                                        NOT PRECEDENTIAL

           UNITED STATES COURT OF APPEALS
                FOR THE THIRD CIRCUIT

                    Nos. 05-2717 & 07-1772

    IN RE: STONE & WEBSTER INCORPORATED, ET AL.,

                                           Debtor

                  SAUDI AMERICAN BANK

                                v.

                     SHAW GROUP, INC.;
             SWINC ACQUISITION THREE, INC.;
              SWE&C LIQUIDATING TRUSTEE,
               successor to SWE&C and SWE&C
              Subsidiaries under the Third Joint Plan
                    a/k/a Webster Corp., 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

                     Argued April 18, 2008

Before: SCIRICA, Chief Judge, AMBRO and FISHER, Circuit Judges

               (Opinion filed: December 30, 2008)
Stephen E. Jenkins, Esquire (Argued)
Catherine A. Strickler, Esquire
Ashby & Geddes
500 Delaware Avenue, 8th Floor
Wilmington, DE 19899

      Counsel for Appellant

Amy B. Abbott, Esquire
Kirkpatrick & Lockhart Preston Gates Ellis
One Lincoln Street
State Street Financial Center
Boston, MA 02111-0000

Bruce S. Barnett, Esquire
Daniel E. Rosenfeld, Esquire (Argued)
DLA Piper
33 Arch Street
Boston, MA 02110

Francis A. Monaco, Jr., Esquire
Kevin J. Mangan, Esquire
Womble, Carlyle, Sandridge & Rice
222 Delaware Avenue, Suite 1501
Wilmington, DE 19810-0000

      Counsel for Appellee

                                        OPINION

AMBRO, Circuit Judge

      Stone & Webster, Inc. (“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

                                             2
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 argue that the latter did not assume the

guaranty. 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 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 costs, we note

our agreement with the Court’s analysis of these 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

                                             3
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 debtors’ 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 liabilities have controlling

                                             4
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.

                                            5
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.1

       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.” App. 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.2 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

       1
        For instance, Schedule 2.03, which describes liabilities, lists a guaranty given by
Stone & Webster to Enron Power Corporation and includes a reference to “outstanding
bank indebtedness.” A note at the end of Schedule 3.17(a)(ix) also labels responsibilities
from a guaranty as a “liability.” App. at A283-84.
       2
       At the time of the sale hearing, the District Court was hearing bankruptcy cases
pursuant to 28 U.S.C. § 1334(a).

                                              6
Shaw “will cure . . . any default existing prior to the date hereof under any of the

Assumed Contracts.” App. at A432. 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 A437–38. 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.3 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 in the Bankruptcy Court for the District of

Delaware, alleging that the Guaranty and Payment Letter were Assumed Liabilities for

which Shaw was responsible. After successfully moving for a withdrawal of the

proceeding to the District Court, Shaw and SW Engineering, among others, answered

SAMBA’s claim with a motion for summary judgment. They 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

       3
        SAMBA’s Statement of Cure Claim also sought $144,430 from SW Engineering
on an unrelated letter of credit issued by SAMBA for the joint venture’s account.
SAMBA had received a demand for payment on the letter of credit from the second
advising bank, MISR Romanian Bank of Bucharest, but this payment was stayed by an
injunction obtained by SW Engineering. See App. at A457–58, 475–89. SAMBA did not
request payment from Shaw of the $144,430 in the complaint that began the case before
us. See Saudi American Bank I, 2005 WL 1036556, at *4.

                                              7
responsible.4 SAMBA counterclaimed with its own motion for summary judgment.

       The District Court granted SAMBA’s summary judgment motion and denied that

of Shaw and SW Engineering. 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 SW Engineering’s

Guaranty was an Assumed Liability for which Shaw was responsible. The Court believed

the Guaranty was “a separate contract” that was not “unambiguously” listed as an

Excluded Asset or Liability under the Purchase Agreement. Id. at *6–7. In so doing, it

rejected Shaw’s argument that the Guaranty was 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

       4
         SAMBA now asserts that Shaw was equitably estopped from asserting that it did
not assume SW Engineering’s liability to SAMBA because Shaw failed timely to contest
SAMBA’s cure claim. As SAMBA did not present this equitable estoppel argument to
the District Court, it is waived. See Union Pac. R.R. Co. v. Greentree Transp. Trucking
Co., 293 F.3d 120, 126 (3d Cir. 2002). The failure to present this argument is easily
understood, as equitable estoppel would need to involve misleading conduct by Shaw and
detrimental reliance by SAMBA, not simply a failure timely to contest the cure claim.
See Bechtel v. Robinson, 886 F.2d 644, 650 (3d Cir. 1989) (explaining that, under
Delaware law, equitable “estoppel may arise when a party by his conduct . . . leads
another, in reliance upon that conduct, to change position to his detriment”).

                                             8
Guaranty was an Excluded Liability.5 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 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 and SW Engineering, among others, 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

       5
         Although it is not relevant to our determination of this case, we note that the
District Court properly excluded Carroll’s declaration at summary judgment review. See
MBIA Ins. Corp. v. Royal Indem. Co., 426 F.3d 204, 214 n.4 (3d Cir. 2005) (“[I]n
determining whether an ambiguity exists a court may consider only undisputed
background facts . . . . ‘[U]ndisputed background facts’ do not include the self-serving
parol evidence submitted by the parties . . . .”).

                                             9
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). We note as well that 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.

III.   Discussion

       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, costs, and attorneys’ fees.

                                             10
       A.     Standing

       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 under the Purchase Agreement, as only the debtors

(i.e., the Stone & Webster entities) have standing to sue Shaw for payment of Assumed

Liabilities. According to this theory, SAMBA should have brought its claim under the

Guaranty against SW Engineering, which could then have sought indemnification from

Shaw if it believed that the Guaranty was an Assumed Liability.6

       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

       6
         Shaw presents two other arguments for consideration in its brief. First, it asserts
that the Guaranty and Payment Letter were not “Contracts” that granted SAMBA
enforcement rights under the Sale Order’s third-party beneficiary provisions. Second,
Shaw claims that the Guaranty and Payment Letter are non-executory contracts incapable
of being assigned to it. As Shaw failed to present either of these arguments to the District
Court, they are waived on appeal. See Union Pac. R.R. Co., 293 F.3d at 126.

                                               11
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

                                              12
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 on this issue.7

       B.     Summary Judgment

       Based on the standard already noted in general, 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

       7
          Shaw claims that by this conclusion “every . . . part[y] who d[oes] not like the
status it was assigned under the Purchase Agreement ha[s] standing to sue Shaw.”
Shaw’s Br. at 33. Shaw, however, agreed to the Sale Order, and we are simply following
what it states. See Saudi American Bank I, 2005 WL 1036556, at *7.

                                              13
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

                                               14
       (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; (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.

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 the . . . contract.” App. 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.8

       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

       8
         SAMBA argues against associating the Guaranty and Payment Letter with the in-
kingdom project because neither SW Engineering nor Stone & Webster had “any
involvement whatsoever in [the project’s] execution and performance.” SAMBA’s Br. at
4. It also claims that use of the loan secured by the Guaranty was not limited to the in-
kingdom project. Id. at 5–7. It is evident, however, that SW Engineering had an equity
stake in the joint venture, see App. at A516, and that it included contracts related to the
in-kingdom project in its bankruptcy estate. See id. at A212. Furthermore, internal
SAMBA documents and the transcript of Sheheryar Ali’s deposition indicate that the
Guaranty was directly linked to the in-kingdom project loan, see id. at A77–96, and that
the loan to which the Guaranty related “was money given to [the joint venture] to finance
this particular contract.” Id. at A294.

                                              15
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 [Stone & Webster and its

subsidiaries] has been completed.” App. at A117. 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. The Purchase Agreement is thus

ambiguous on whether the in-kingdom project is an excluded Completed Contract.

       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

                                             16
specifies the in-kingdom project. Id. 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.9

       9
         The District Court did not consider this argument because “Schedule 2.02(e) was
added to the [Purchase Agreement] by debtor and defendant Shaw subsequent to [the
District Court]’s approval of the Execution Copy of the [Purchase Agreement].” Saudi
American Bank I, 2005 WL 1036556, at *3 n.6. As mentioned, Sections 2.07 and 5.17 of
the Purchase Agreement permit Stone & Webster to amend and add schedules, see App.
at A133 & A158, and § 7.01(a) explains that any such schedule is “deemed to have been
made and delivered as of the Effective Date [of the Purchase Agreement].” Id. at A163.
Moreover, the District Court’s argument is undermined by the fact that it emphasized the
importance of Schedule 3.17(a)(ix), see Saudi American Bank I, 2005 WL 1036556, at
*7, which was added to the Purchase Agreement on the same day as Schedule 2.02(e).
       SAMBA also argues that we should not consider the relevance of Schedule 2.02(e)
because (1) paragraph 31 of the Sale Order provides that the Purchase Agreement “could
not be modified without an order of the Court, unless the modification would not have a
material adverse effect on Debtors’ estates,” and (2) Shaw’s counsel stated at the sale
hearing in July 2000 that “the contracts that are in [the Purchase Agreement] are now
fixed.” SAMBA’s Br. at 55. We reject both arguments.
       First, the sections of the Purchase Agreement permitting amendment of schedules

                                             17
       SAMBA’s arguments against considering the Guaranty and Payment Letter

Excluded Liabilities do not overcome the unambiguous language of the Purchase

Agreement. Indeed, its 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 [Stone & Webster and its subsidiaries’]

outstanding bank indebtedness” and “other liabilities related to the . . . Assumed

Contracts.” Id. 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

were not modified or added to the Agreement after the issuance of the Sale Order. Also,
as noted by SAMBA’s counsel at oral argument, it is “uncontested” that Stone & Webster
was the party that filed Schedule 2.02(e). Or. Arg. Tr. at 21. Adding the schedule was
thus sanctioned by the District Court and was not materially adverse to Stone &
Webster’s interests.
       Second, counsel’s remark about the contracts being “fixed” says nothing about the
parties’ ability to add contracts or adjust the schedules. In fact, counsel’s statements
immediately following the “fixed” remark focus on “preserving the right for [Stone &
Webster] to say . . . [a contract]’s in, and Shaw to say . . . it’s out,” and discuss the
parties’ belief that further negotiations would be necessary to clarify “material
misunderstandings about what the effect of this contract on the estate is.” App. at
A736–43.

                                             18
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

referenced guaranties 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 (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 A496.10

       We also disagree with SAMBA’s assertion that the transcripts of the sale hearings

       10
           Moreover, even if the Guaranty and Payment Letter were somehow included
within the guaranties listed in Schedule 3.17(a)(ix), their placement there would not be
conclusive of their assumed status. The Purchase Agreement anticipates in Sections 1.01
and 3.17 that there are liabilities and obligations listed in Schedule 3.17(a)(ix) that are
elsewhere excluded through specific mention or association with an Excluded Asset.
There is no reason why the Guaranty and Payment Letter at issue here would not be such
liabilities if, in fact, they were listed in Schedule 3.17(a)(ix).
         In its brief, SAMBA also cites page A882 of the Appendix to support an assertion
that the “Guaranty and Payment Letter were listed on the Second Amended Assumed
Contract List.” SAMBA’s Br. at 23. Page A882, however, is merely a title page for the
Amended Assumed Contracts Lists, and a search of the preceding and following pages
reveals no specific mention of the Guaranty or Payment Letter.

                                            19
show that the Guaranty and Payment Letter were Assumed Liabilities 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 whether the Guaranty and Payment

Letter are Excluded or Assumed Liabilities. The statement does not discuss the relevance

of the “liabilities and obligations” associated with Excluded Assets, and it fails to

mention the importance of the Special Project Claims. Other statements from the

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 [sic] to try and make adjustments, because I

understand it is going to be complicated . . . .”).

                                               20
       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.11

       C.     Interest, Costs, and Attorneys’ Fees

       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, costs, and attorneys’ fees. 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, 2000.12 We likewise concur in the Court’s

       11
        As expressly reserved by SAMBA in its Statement of Cure Claim, its claim for
repayment of $6,872,979 should now be treated as a Proof of Claim against SW
Engineering. See App. at A458.
       12
          Despite the Guaranty’s statement that it “shall be governed by the laws of the
State of New York,” SAMBA sought application of Delaware’s legal interest rate of 11%.
See Saudi American Bank II, 354 B.R. at 689–91. Shaw, SW Engineering, and others
argued in response that SAMBA was not entitled to receive interest on the sum because
the joint venture’s “obligation to SAMBA ultimately arose under and is determined by the
Credit Agreement, and . . . Payment Letter,” which are controlled by Saudi law that
forbids the collection of interest. Id. at 690. The District Court concluded that the terms
of the Guaranty controlled in all respects, granting SAMBA pre-judgment interest at New
York’s interest rate of 9%. See id. at 690–91; N.Y. C.P.L.R. §§ 5001(a) & 5004. The
Court distinguished the Guaranty from the Credit Agreement by reiterating that a
guaranty “is a separate contract involving duties and responsibilities which are different
from the basic contract to which it is collateral.” Id. at 690 (quoting FinanceAmerica,
380 A.2d at 1379). It applied New York’s interest rate because it determined that
Delaware, whose law would control in the absence of the parties’ choice of law, did not

                                            21
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.

       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 litigation costs. 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

directly incurred in enforcing rights against SW Engineering under that instrument. See

id. at 692.

IV.    Conclusion

       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 its grant of

summary judgment to SAMBA, and we vacate its orders requiring Shaw to pay pre- and

post-judgment interest, litigation costs, and attorneys’ fees. We further remand the matter

to the District Court for proceedings consistent with this opinion.

have a “materially greater” interest in the subject matter than New York. Id. at 691
(quoting Hionis Int’l Enters., Inc. v. Tandy Corp., 867 F. Supp. 268, 271 (D. Del. 1994)).

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