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Facts: Stone & Webster, Incorporated ("Stone & Webster") and its subsidiaries, including Stone & Webster Engineering Corporation ("SW Engineering") filed for chapter 11 bankruptcy. Postpetition, the debtors entered into an asset purchase agreement ("APA") with the Shaw Group, Inc. ("Shaw") to sell substantially all of its assets. The sale was approved (the "Sale Order"). After the sale, Saudi American Bank ("SAMBA") filed a cure claim against SW Engineering for payment of $6.7 million dollars pursuant to a guaranty agreement and then sued both SW Engineering and Shaw for that amount under the APA. Issues: Whether Shaw assumed a guaranty obligation of the SW Engineering to SAMBA in the APA.
Rules: Although case law establishes that "'a guarantee and the underlying contract are separate contracts' ... the general law of contract, that agreements are enforced 'in accord with their makers' intent,' must control." "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.'... '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.'"
Holding: "the Guaranty and Payment Letter are Excluded Liabilities because they are associated with ... [a project that is] an excluded Special Project Claim [under the APA]."
Reasoning: First, the court felt that SAMBA has standing to sue the parties under the APA due to the language of the Sale Order, which includes language protecting the rights of third parties and which supersedes the language of the APA. Here, "the parties expressed a clear intent to associate guaranties and other liabilities or obligations with their underlying contracts." Under the APA, "a liability need only be 'associated with' an Excluded Asset or a debt not an Assumed Liability, or 'arise 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... Thus, the Guaranty and Payment Letter may be Excluded Liabilities if the... [contract] with which they are associated is listed as an Excluded Asset." Although there were certain discrepancies in the APA, the schedule of contract at issue was specifically listed as an Excluded Asset, and therefore, the guaranty and payment letter are excluded liabilities because they are associated with an excluded asset. Lastly, the court reversed the award to SAMBA for attorneys' fees. Although the court agreed with the lower court's legal analysis in awarding the fees, since the court reversed on the guaranty portion of the ruling, SAMBA was no longer entitled to attorneys' fees.
Facts: Before bankruptcy, the Debtors - American Home Mortgage Corp. ("AHM Corp.") and AHM SV, Inc. ("AHM SV") - originated, sold, and serviced residential mortgage loans. The loans
