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Enron Mail |
Ben,
I know you want to put Certosa Holdings on the back burner for a while but unfortunately we can't stop the process unless we withdrawal our request for unusual use permit. If we do so, we can not re-submit for 18 months. Since the application was submitted in the name of Certosa Holdings, if the property is conveyed to another entity, it may be possible to re-submit under this new entity. I've asked Kay to look into the possibility if throwing Certosa Holdings into bankruptcy. I have not heard back but here are my thoughts: (1) We are not a creditor and therefore we may not have the ability to put CH in bankruptcy (2) If we can deem CH in default of the option agreement, one of the remedies is reimbursement. Since CH is illiquid, we would automatically be a creditor with the ability to throw them into bankruptcy (3) Once in bankruptcy, I don't know what would happen. There are no secured creditors and we would be the only unsecured creditor. (4) Whether bankruptcy would halt the unusual use permit approval process or not, I do not know. Until we determine if bankruptcy helps, us we have no choice but to proceed. I estimate the burn rate will be between $50,000 and $60,000 per month through October. This is broken down into four types of costs: (a) lobbyists: $17,000 per month from June through October plus $210,000 in success fees if we get project approval from the commissioners. (b) yet to be negotiated option consideration: $20k to $35k to Certosa Holdings as well as an adjacent property owner looking for a buyout © land fill closure related activities: $35,000 (ground water testing, fencing the property and funding assistance to get $800,000 of bond money released to reimburse closure costs) (d) Consultants and lawyers: $23,000 per month As you know we are now out of the jurisdiction of the CZAB and in the jurisdiction of the Board of County Commissioners. Below is a summary of where we are and where we need to go. Please let me know when you have a few minutes to discuss this project. Renew or New Option Agreement: We need to renegotiate the Option Agreement with Certosa Holdings: Rather than giving CH a chunk of money that could disappear immediately, I'd like to structure an arrangement where we fund, as long as the Option Agreement is in effect (we don't terminate before expiration), some landfill closure work. This benefits both Enron and CH as DERM will be more amenable to amending the Consent Agreement that sets out the time table of closure if they can see some progress. I an trying to get with Kay to discuss alternatives. We need to be aware that CH could file bankruptcy sooner or later. I checked the Option Agreement and unlike some of the other agreements, this one does not appear to have bankruptcy as a default. If we have to give CH anything I would want to give him only a nominal amount of money; $25k max Option on adjacent property: As referenced above, we (Kerri) have been contacted by an attorney representing a property owner adjacent to the CH site who may be looking for a buy out. The property is wetlands and should be relatively cheap considering it is useless. Unusual Use Permit Application and Claim of Taking: We expect to present the project and argue the taking issue before the Development of Impact Committee ("DIC") in July. This is a committee of County Department heads. They will make a recommendation to the Board of County Commissioners who will hear the merits of the project and decide on whether to approve the project. Only if they reject the project does the taking issue come into play. I will work to target the Board of County Commissioners hearing for October. You are aware of the ordinance we propose to discuss with the Commissioners. I'd like to talk to you about this when you have time. DERM (Department of Environmental Resource Management) issues: When we executed this option agreement, we fully expected CH to have closed the landfill by now. Obviously things have changed. We (Kerri, Valorie Settles of Shutts & Bowen and I) met DERM last week. DERM is willing to consider revising the Consent Agreement and the schedule of closing the landfill. We discussed creating a 3 phase closure. the first phase would be the easy (cheap) stuff as discussed above. The second phase would be more expensive and may include removal of a pile of wood for $171k and or removal of exotics from the wetlands for $83k. The second phase would be times to occur after we received County Commissioners approval for the Unusual Use Permit. The third phase would be the very expensive stuff ($ millions) and would be timed to be when we expect to exercise the option. Consultant Agreements for Lobbyists: We have been working with one lobbyist, whose contract expired at the end of May. Another, a former chief of staff of the commissionwer whose district the project is in, publishes a newspaper called the Gospel Truth, which recently published an article about the project and the need for power
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