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Because both sides wished to retain their contract-based claims
in other proceedings or against other parties, paragraph 6 of the
settlement provided:
Nothing in this Settlement Agreement in any way
affects, either directly or indirectly:
(a) The rights, if any, of the Milk Producers or
Danish Creamery to assert their claims in the pending
KF Dairies bankruptcy proceedings or to receive
distributions or other compensation in those
proceedings. In the event that any such distribution
is received by the Milk Producers or Danish Creamery,
Bank Defendants shall not receive any credit for any
distribution because the sums paid in connection with
this settlement are not attributable to the contractual
claims asserted by the Milk Producers and Danish
Creamery in the bankruptcy proceedings;
(b) The rights, if any, of the Milk Producers or
Danish Creamery to compromise those bankruptcy claims
or to dispose of them in any other way;
(c) The rights, if any, of the Milk Producers or
Danish Creamery to participate in those bankruptcy
proceedings as parties-in-interest;
(d) Bank Defendants' rights, if any, to assert
claims for indemnity against any other entity or party;
and
(e) The rights or liabilities, if any, of any
other entities or parties in the coordinated
proceedings or in the insolvency proceedings.
After the milk producers action settled, petitioners (and
all other milk producers) still had outstanding claims in the
Knudsen bankruptcy action for the value of the milk. Most of the
milk producers released their bankruptcy claims in exchange for
an assignment by Knudsen of its causes of action for breach of
fiduciary duty against its individual directors and officers.
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