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<br />a reserve account i[ had withheld end was seeking to setoff
<br />against life Sneurance premiums claimed by Equitable to be due
<br />and owing from Reorganized CFii/ (b) declaratory relief to deny
<br />setoff; (c) an order for payment of the reserves by Equitable to
<br />Reorgeni xed CP61 for the benefit of certain of its retirees who
<br />elected Co part Sclpete in Che Retiree Major Medical Insurance
<br />Program offered by CPiI 9tee1 Corporation and insured by
<br />Equitable until July 31, 1989 (the "Reti rase"); (d) en order
<br />denying Bquiteble•e claim against Reorganized CP4I; (e) the
<br />enforcement of Sniunctlon end award of sanctions pursuant [0 11
<br />U.S.C. $ 524 (e)12) end Debtor's Confirmed Plan; and (f) en award
<br />of Eeee to Reorganized I:F6I for remedying Equi[able'e alleged
<br />breech of fiduciary duty under the Employee Retirement Income
<br />Security Act ("BRISA").
<br />4. Based on a etlpuletlon of the parties end an order
<br />of the Court, the Adversary Proceeding was to be resolved Sn
<br />three 13) phases.
<br />5. With respect to the Phase I issues, Reorganized
<br />CF6I filed a Motion For Part Sal Summary Judgment Againe[
<br />Equitable Life Aaeurnnce Society Of The United States and
<br />Equitable filed its Croee Motion for Summary Judgment.
<br />6. On March 29, 1996, the Court entered ire Judgment
<br />Denying The Equitable Life Assurance Society OE The United
<br />Sta[ea' Motion Por Summary Judgment (Doted October 16, 19951, And
<br />Granting Reorganized CP6I Steel Corporation's Motion For Partial
<br />Summary Judgment (Dated September 1, 1995) and its Judgment
<br />Denying The Equ1 [able Life Assurance Society Of The United
<br />States' Motion For Summary Judgment (Dated October 16, 1995), And
<br />Granting Reorgeni Zed CF6I Steel Corporation's Mo[Son For Partial
<br />Summery Judgment (Dated September 1, 19951 (the "Judgment"I.
<br />7. The Judgment held Chat Equ Stable had no right to
<br />setoff funds in the reeervee held by Equitable against the life
<br />insurance premiums claimed by Equitable to be due to it by
<br />Reorganized CF4I Steel and ordered Chet equitable pay the
<br />reeervee to Reorganized CF6I for the benefit of Che Retirees.
<br />The Judgment also denied the relief sought Sn Equltable's third
<br />counterclaim, S.e• Equ1[able'e asserted right to setoff the
<br />reeervee SC held to pay unpaid life Sneurance premiums Equitable
<br />asserted Reorganized CFaI owed.
<br />8. Although pureuent to Che Judgment on Phase I
<br />issues, Equitable was ordered Co pay [he reeervee to Reorganized
<br />CF4I, the accounting of the reeervee was part of Pheee II of the
<br />arl.._ r/ sroceed'^ ^d!^^'_y .hc a of h :ca-:.-o .,a,.
<br />not yet been determined by Che~COUrt; therefore, those reeervee
<br />had not yet been paid to Reorganized CPiI far the benefit of the
<br />Retirees.
<br />9. On May 1S, 1996, the parties flied a Report OE
<br />Parties' Planning Meeting (POrm 35) concerning disclosures,
<br />discovery end motion deadlines for Pheee II issues, including
<br />Reorganized CF6I's claim for en accounting of the reeervee.
<br />30. Subsequently, Che parties engaged Sn informal
<br />discussions end exchange of information on [he eccountLng issues.
<br />Ae a result, the pa r[See have entered into a Settlement Agreement
<br />And Mutual Releeee (the "Settlement Agreement") dated the 31st
<br />day of October, 1996, a copy of which Se etteched hereto end
<br />incorporated herein by reference ee Exhibit "1". Connecticut
<br />General LLEe Insurance Company ("CGLIC") was also a party Co the
<br />Settlement Agreement because pursuant to an Agreement between
<br />Equitable end CGLIC dated March 28, 1990, [he reeervee end the
<br />right to assert and enforce [he claim against Reorganized CF6I
<br />for alleged unpaid life Sneurance premiums were transferred to
<br />CCLIC end remain with CCLIC at the present time.
<br />11. The pertinent terms of the Settlement Agreement
<br />are eummarl zed ee follows:
<br />a. On November 1, 1996, CCLIC shall pay the sum
<br />of 5795,600 to be held in truer for the benefit of [he Retirees
<br />Sn an iota rest-bearing escrow account in accordance with the
<br />terms of an escrow Agreement, a copy of which Se etteched to the
<br />Settlement Agreement ae Exhlbi[ A, pending Bankruptcy Court
<br />approval;
<br />b. IE Bankruptcy Court approval Se obtained, the
<br />$795,600 sum, plus accrued inters e[ [hereon, Se to be released
<br />from Che escrow account end di et ri bu[ed in accordance with en
<br />order of the Bankruptcy Court;
<br />c. If for any reason Bankruptcy Court approval ie
<br />not obtained within 270 days from the date of the execution of
<br />the Settlement Agreement (1 .e. by July 28, 1997), 5416,224.64 of
<br />the $745,600, plus interest accrued on the 5416,224.64, Ss to be
<br />retained in the sec row account for the benefit of the Retirees
<br />end dietribuced pureuent to further order of the Bankruptcy
<br />Court, with the balance of 5329,775.76, plus accrued interest,
<br />being returned [o CCLIC, et its option, !n which event the
<br />Settlement Agreement, with Che exception of certain provisions,
<br />shall be of no further force and effect and the parties will
<br />litigate their remaining claims in the Adversary Proceeding.
<br />CGLIC may also elect to leave the $329,375.76, plus accrued
<br />interest, in [he escrow account after such 270-day period pending
<br />a ruling by [he Court on [he Settlement Agreement. If the Court
<br />enters an order denying approval of the Settlement Agreement,
<br />[hen [he 5729,375.36, plus accrued inCere9[, shall be returned [o
<br />CGLIC, in which even[ the Settlement Agreement, with the
<br />exception of certain provi eione, shall be of no further force and
<br />
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