CATS litigation

----- Forwarded by Richard B Sanders/HOU/ECT on 03/30/2001 10:01 AM -----

Mary Nell Browning
03/30/2001 09:12 AM

To: James Derrick/Corp/Enron, Michael R Brown/LON/ECT@ECT, John
Sherriff/LON/ECT@ECT, Mark Evans/Legal/LON/ECT@ECT, Richard B
Sanders/HOU/ECT@ECT, Fernley Dyson/LON/ECT@ECT, Paul Chivers/LON/ECT@ECT,
Richard Lewis/LON/ECT@ECT, Peter Crilly/LON/ECT@ECT, Richard
Harper/LON/ECT@ECT, Paul Turner/LON/ECT@ECT, Jackie Gentle/LON/ECT@ECT,
Claire Wright/LON/ECT@ECT, Raj N Patel - Tax/LON/ECT@ECT
cc:
Subject: CATS litigation

The House of Lords have notified us that they will give their decision in the
CATS litigation on Wednesday 4 April. The decision is being handed down
approximately 6 weeks earlier than anticipated. Our counsel Jonathan
Sumption believes this may be a favourable sign for Enron for two reasons:
(1) he believes the Lords would not have had a suffficient amount of time to
do the sort of analysis that it would take to compose a decision overturning
the Court of Appeal ruling, and (2) he believes that Lord Hoffman, the
individual who seemed most against us during the hearing, is busy writing a
decision in an important human rights case and very likely then is not
writing the decision in our case. For these reasons, the likelihood of the
ruling being in favour of Enron has improved; I would estimate our currently
likelihood of success at 60%. Our team believes that the CATS parties are
unlikely to accept a settlement offer of less than o50 million. Because we
believe we are more likely than not to win, we believe we would be giving up
value by making an offer of o50 million and therefore recommend that we not
make an offer of settlement.

We expect to have a decision by 11:00 am London time on Wednesday; judgement
will be handed down formally at 2:00 pm that day. I will make sure that each
of you is contacted as soon as possible with the result.