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Enron Mail |
Richard - here's what I've been able to gather over the past day.
the timing of all this w/ WMI goes back to '95-'99 all this relates to the Davis St. project in Oakland GSF was the operator of the wellfield and the medium Btu processing plant GSF owned the plant (a compressor and refrigeration unit) and the pipelines used to gather the gas the key person from Ecogas was a guy named Ray Kuroki who was formerly with GSF when Ecogas acquired them prior to Ecogas' acquisition of GSF, the project was losing money so GSF was prepared to walk from the site based on their "economic out" in the Agreement. WMI did not want to assume operations so they initiated negotiations w/ GSF (Ray) to eliminate the royalty payments in return for GSF continuing to operate the wellfield. WMI was having its own financial problems and didn't want the hassle of having to operate a stand alone facility. Ray claims WMI lawyers (in Irvine, CA) had drafted an amendment to their contract but it was never executed. He believes Ecogas has a copy somewhere in their files. While this was occuring, Ecogas acquired GSF and Ray was moved to another area and Jerrel Branson and Jon Hall (former CFO of Ecogas) took over. Everyone I've spoken to does confirm that the royalty payments owed were never made, so this claim could have some legitimacy. I'm trying to find out how much? However, both Ray and Geoff Brown (former GSF who was in charge of ops at Davis and now currently VP-Ops for Ecogas) assert that GSF never agreed to be responsible for the landfill's compliance with air quality standards (they quote Bay Area Rule 34). Ray and Geoff both stated that GSF was NOT an environmental company and would never have agreed to such. Ray seemed to recall that during the negotiations there was some discussion re: language whereby GSF would agree to use its "best efforts" to assist WMI in meeting its compliance standards but nothing that obligated GSF to be responsible for them. I have skimmed the Agreement (a copy has been sent to you) and found nothing that asserts GSF/Ecogas was responsible for any environmental compliance for anything other than their assets and their operations. WMI's claim is based upon fugitive emissions (gas seeping out of the ground) and NOT upon GSF/Ecogas' failure to operate its plant properly. Therefore, the environmental claim seems to be much less grounded. I'll see you at 3 pm in my office to discuss. RANDY
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