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Enron Mail |
Sorry I didn't come up with more concrete examples. I'm really concerned
about my dad, although I try to deny it. I still think that we should insulate ENA on the next deal. Kay From: Carlos Sole on 03/19/2001 05:15 PM To: Stephen Thome/HOU/ECT@ECT, Jake Thomas/HOU/ECT@ECT cc: kay.mann@enron.com Subject: Salmon Energy Post-Closing Risks Justifying Guaranty Steve, per our phone conversation, the following are examples of post-closing risks that justify Delta's provision of a Parent Guaranty: - Delta Affiliate issues a $5 million Change Order to GE, but doesn't have the money to pay for it; Enron decides to pay for that change order in order to maintain our relationship with GE and then Enron's recourse is limited to the Delta Affiliate that defaulted on the GE Change Order payment in the first place - Delta Affiliate stops paying for the Insurance that the LLC must have; Enron decides to make the Insurance payments and then must recover the costs from the Delta Affiliate - Despite its representations, Delta Affiliate has incurred a brokerage fee, defaults in that payment, Enron covers it and then must recover from Delta Affiliate - Delta Affiliate incurs some third party personal injury liability and Enron becomes liable for it, and can seek recovery from the Delta Affiliate - Delta Affiliate breaches the agreement and Enron seeks damages which are limited to what it can recover only from the Delta Affiliate As a compromise, there could be a monetary cap on the guaranty that it be tied to the Transaction Value (ie $68 million)
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