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Enron Mail |
I am faxing you separately three pages from Don Ray George, reflecting
calculations that I asked him to do concerning each individual plaintiff's damages shown by the Rhodes study. Specifically, Don Ray, with Marianne's help: (i) tried to determine the specific wells in which each individual plaintiff had an interest; (ii) located, from Rhodes' study, the 2-page sheets for each of those wells; (iii) added up all the over- and undertake "values" (dollar amounts) shown for that well in the Rhodes study; and (iv) applied plaintiffs' percentage interest to that amount. He then added up the individual well amounts for each plaintiff, to arrive at that plaintiff's "actual damages per Rhodes." The purpose of this exercise was to make a rough cut determination as to which plaintiffs will be claiming the most damages, and therefore, to help us decide which method of choosing ten representative plaintiffs would most benefit us. In doing so, we gave plaintiffs the benefit of the Rhodes Study's methodology, with two exceptions: (1) for a given plaintiff, Rhodes added up only the undertaken "values," disregarding entirely and thus failing to offset overtaken "values;" in the scenarios on p. 1 and p. 2, we credited a given plaintiff's overtaken values against that plaintiff's undertaken amount; (2) Rhodes also added an "interest" calculation" to his numbers; we did not use his interest calculations at all, because they are totally wrong under the law. But of course, Rhodes' methodology is totally flawed in numerous other respects as well -- so much so, in our opinion, that it is utterly defective -- and furthermore, plaintiffs have now indicated they want to rerun numbers using different (Intratex) data. This is just our best effort to get our arms around some numbers at this stage based on plaintiffs' theories, with no consideration of most of our defenses as to each individual plaintiff and to all plaintiffs in general. Page 1 shows the results for each individual plaintiff, crediting overtakes against undertakes. DISREGARD the $27 million total; that is the total only if net overtakes from all of the overtaken plaintiffs combined are credited against net undertakes from all of the undertaken plaintiffs combined. At least as of this stage, since we are not seeking contribution from overtaken plaintiffs, that number is not valid even under our current theories. (It may become valid at some point, but for now, let's disregard it entirely). Page 2 shows the cumulative total for all plaintiffs with damages, when offsets are not considered. The total is: $50,528,850. Page 3 shows the cumulative total for all plaintiffs, when overtake values are NOT taken into account. The total is: $66,402,761. A few observations about these numbers: 1. First, many plaintiffs -- approximately half -- have no damages at all under the Rhodes methodology, when undertaken values are taken into account. 2. If my hurried calculations are right, of the $50 million shown on page 2, $45 million represents the damages of only 8 plaintiffs (nos. 1-8). 3. There are significant individualized defenses with respect to these plaintiffs. It appears at this stage that Southwest Royalties is another Beeson -- i.e., that it acquired its interests in the wells after the 1978-88 time period at issue. We do not yet know that SW Royalties acquired the right to sue on the contracts. With respect to Eclipse (Beeson's company), we're pretty sure it did not. American Trading and Production (ATAPCO) had Panhandle gas, and litigated its "fraud" claim re: Panhandle; thus, all damages as of the time of the Panhandle agreements (1985) are plainly barred. Almost all of Staley's damages would be foreclosed by a settlement he entered into in 1987 (I think that's the date). We know Joe O'Neill deliberately underproduced a lot of the time. Those are just a few examples from my memory, all of which underscore that these numbers are inflated. 4. Of course, at trial -- since the court has not certified, and they are entitled to prove up individualized types of damages -- plaintiffs could try for damages over and above those shown by the Rhodes study, such as "reservoir damages" for certain individual plaintiffs, etc. So these are not a ceiling, necessarily. 5. Again, using the Rhodes study as a basis is very iffy to begin with, since plaintiffs have indicated they're going to redo their ratability analysis using Intratex numbers -- which may yield entirely different results -- and the Rhodes study's methodology is utterly wrong. But at least it gives us a rough basis with which to work at this stage of the game.
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