|
|
Enron Mail |
mark, an issues update:
1. timing issues--sithe has extended the time for potential tollers to give comments back on the tolling and related agreements until next friday, may 12. final bids are not yet in and will probably be coming in as late as a week after that (may 19). we anticipate some real negotiation on the documentation and some issues that may be hard to resolve. our restructure document negotiations will be running a parallel path. this is a lot to accomplish, particularly with marty's torturous page-turning, wear you down negotiating style and the fact that he will be involved in all. marty has said he sees his june 1 date slipping. 2.bondholder issues--we have issues in addition to our consent issue that we have discussed. with respect to one of the transport pieces with transcanada, it signed a consent directly running to the bondholders that arguably it could be breaching if it consented to the assignment of the transport to us. marty's lawyer is clearly worried about this and transcanada is likely to at least ask for an indemnity from sithe and/or us. business guys are discussing splitting that risk 55 sithe/45 us, the partnership split under the proposed restructured deal. additionally, we have been asked to agree that the transport assigned to us is pledged to the bondholders and in essence agree that we will indemnify the bondholders directly if we do not make the transport contract payments. that number has potentially moved from $190 million to a significantly larger number ($350 million???). seems like the toller may have some concern with bondholder issues potentially in trying to protect itself during this long tolling period. this obviously could affect timing. bondholders are likely to have QF concerns as well (both on our side and with PECO). hard to tell what the business strategy is right now with respect to informing the bondholders about the transactions. 3.limitation on sithe liability--sithe served us very skinny documents, including no reps and warrranties except basically as to title, and those came from a shell subsidiary where it is dropping its interest (supposedly for tax purposes) and disappeared at closing. there will need to be significant push back on a number of fronts to get some fairer documents. 4.tax issues--leboeuf and steve douglas are working on, but there is a potential for disconnect between the two sides as to tax treatment that we are trying to run to ground. the deal is so tight and so structured that we worry that a disconnect could make a deal hard to do. 5.due diligence--the business guys have not really done. le boeuf has been geared up to help starting monday (financial, plant, material contracts). Lisa J. Mellencamp Enron North America Corp. - Legal 1400 Smith St. Houston, TX 77002 Tel: (713) 853-7986 Fax: (713) 646-3393 E-mail: Lisa.Mellencamp@enron.com
|