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Enron Mail |
Is this something we should respond to, both to clarify and defend our
actions. There are a lot of untruths in their memo including their "lack of support" of what they call "Enron's actions" which were in fact the Board's and/or Executive Committee's actions. They were consulted on most if not all of the major issues, including the removal of senior management, financial restructuring, etc... In any event, ENA never acted in a vacuum. Everything was done in concert with the Board of Directors and/or the Executive Committee (Milt Datsopoulos, Linda Murdoch and myself) appointed by the Board. On Aug 1 we had a meeting in Vancouver when I resigned off the Board and Ray Bowen informed them ENA would not fund any longer. The attendees were: Ray Bowen, Randy Petersen and myself (all from ENA), Ken Swaisland (shareholder), Richard Bullock (Berkeley), Linda Murdoch (CFO of Kafus and member of the Board) and Milt Datsopoulos (Chairman of the Board). Once informed of ENA's decision, Ken Swaisland immediately replied that this would put the company into bankruptcy and immediately began trying to cut a deal offering ENA all of Kafus' stock in CanFibre in exchange for its stock in Kafus and full forgiveness of all debt at the Kafus level. We told Ken that ENA was not interested in such a deal but was open to discussing alternative restructuring proposals and encouraged them to bring ideas, restructuring plans, refinancings, etc... to us. Back as early as May of this year (possibly even earlier although my involvement only goes back to May), Mike McCabe and Tony Valentine came to us stating they were working on a restructuring/refinancing plan. Such a plan was never presented, although they did submit a very broad (i.e., very few specifics) "cost cutting" plan. In Berkeley's memo of 23, they again ask for an opportunity to present a "plan." Where's the beef? What I'd like to see their reaction to is questions re: the trading of Kafus stock within the first hour after we informed them of ENA's decision not to fund the company any more at our Aug 1 meeting in Vancouver. The volume which normally traded in the 50,000 shares/d range had shot up to 150,000 shares/d the two weeks preceding our Aug 1 meeting and on that very day over 500,000 shares were sold. Per Tony Francel, the IR guy at Kafus, all of the sales appeared to be coming in thru 3rd party agents from Europe. Per Tony, whoever was executing the trades was taking careful steps to disguise their identity. Chris Helfrich has a chart of the Aug 1 stock volume activity broken down into 15 min intervals and I noted on the same chart the timing and progress of our meeting that day in Vancouver including who was in the room at all times, when specific people left the room, etc..... Based on the volumes being traded, there are only 3 people who could've been dumping that much stock over that short a period: Swaisland, Berkeley and ENA. We have confirmed that ENA has NOT sold any of its stock. It's also important to note that preceding all of this, Berkeley had tried to get a couple of transactions "pushed thru" the Board including Kafus International (KIDG) and Hyaton. In both cases, the Board rejected their proposals for two reasons: 1) the value being offered by Berkeley for each asset was very suspect to the relative market value and 2) the proposals were structured as "forgiveness" of Kafus debt to Berkeley, i.e., non-cash transactions.
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