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Enron Mail |
Tom Hatch concluded his examination of Aron Izower today.? Lawyers for the
other plaintiffs will begin tomorrow.? Izower was a first-year lawyer at White & Case when he began working on the NSM offering in Oct. 1997.? The senior White & Case lawyers who worked on the deal have either changed firms or retired. Highlights: --Hatch spent much of the morning on the off-take agreements and their description in the offering memo.? Izower strongly defended offering memo's description of the off-take agreements as accurate but would not cooperate with Hatch when asked to point out where in the off-take agreements Preussag or Klockner were "obligated" to purchase NSM's steel.? Izower's counsel objected to the questions as calling for a legal conclusion.? --Hatch walked Izower through the various drafts of the off-take agreements and asked if Izower had discussed the changes with the "underwriting group."? Izower testified that most of the comments were received from Gleacher Natwest, McDonald, Cravath and SDI.? Izower produced a responsibility schedule concerning certain documents related to the offering with completion dates.? Enron/ECT is not mentioned in the document as having had any role in the drafting although Izower did mention, as an afterthought, that Enron and Paine Webber may also have provided comments on the off-take agreements. --Hatch established that the offering memo failed to disclose the existence of certain material agreements such as: a)????? Employment agreements between NSM and Swasdi Horrungruang and NSM and Chamni Janchai (who was thought of as being a crook) pursuant to which they received an annual salary of $350,000 for ten years; b)????? A Throughput Agreement between Sriracha Harbor and NSM pursuant to which NSM offering proceeds would be diverted to the Harbor (which Swasdi had an ownership interest in) and to certain Thai banks who were owed sums from the Harbor.? Apparently, the Thai banks were threatening a foreclosure and take over of the Harbor jeopardizing NSM's ability to import and export materials.? The payment sums are not disclosed.? In less than convincing fashion, Izower indicated that the agreement was probably not mentioned in the offering memo as it may not have qualified as "related party transaction." --Izower had no idea why the legal, financial and advisory fees on the NSM deal had increased from $29 million to $35 million. This e-mail message may contain legally privileged and/or confidential information. If you are not the intended recipient(s), or the employee or agent responsible for delivery of this message to the intended recipient(s), you are hereby notified that any dissemination, distribution or copying of this e-mail message is strictly prohibited. If you have received this message in error, please immediately notify the sender and delete this e-mail message from your computer.
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