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Enron Mail |
Are we doing anything on California and do you need my input? -----Original Message----- From: =09Cheek, Charles =20 Sent:=09Monday, July 23, 2001 12:03 PM To:=09Peng, Gary; Eickenroht, Robert; Sanders, Richard B. Cc:=09Rogers, Rex Subject:=09RE: Second Quarter 10-Q Litigation Disclosure The Rio Piedras Explosion Litigation note needs to be updated. My suggested= note follows with deletions being noted by "***" and additions noted in bo= ld. Please let me know if you have any questions are comments. ____________=20 On November 21, 1996, an explosion occurred in *** the Humberto Vidal Build= ing in San Juan, Puerto Rico. The explosion resulted in fatalities, bodily = injuries and damage to the building and surrounding property. San Juan Gas = Company, Inc. (San Juan Gas), an Enron affiliate, operated a propane/air di= stribution system in the vicinity, but did not provide service to the build= ing. Enron, San Juan Gas, four affiliates and their insurance carriers were= named as defendants, along with several third parties, including The Puert= o Rico Aqueduct and Sewer Authority, Puerto Rico Telephone Company, Heath C= onsultants Incorporated, Humberto Vidal, Inc. and their insurance carriers,= in numerous lawsuits filed in U.S. District Court for the District of Puer= to Rico and the Superior Court of Puerto Rico. These suits seek damages for= wrongful death, personal injury, business interruption and property damage= allegedly caused by the explosion. After nearly four years without determi= ning the cause of the explosion, all parties *** agreed not to litigate fur= ther that issue, but to move these suits toward settlements or trials to de= termine whether each plaintiff was injured as a result of the explosion and= , if so, the lawful damages attributable to such injury. The defendants ***= agreed on a fund for settlements or final awards. Numerous claims have bee= n settled and ten cases involving 19 plaintiffs are scheduled for trail in = the United States District Court beginning on December 10, 2001. No cases h= ave yet been scheduled for trail in the Superior Court. Although no assuran= ces can be given, Enron believes that the ultimate resolution of these matt= ers will not have a material adverse effect on its financial position or re= sults of operations.=20 ____________ -----Original Message----- From: =09Peng, Gary =20 Sent:=09Thursday, July 19, 2001 3:37 PM To:=09Cheek, Charles; Eickenroht, Robert; Sanders, Richard B. Cc:=09Rogers, Rex Subject:=09Second Quarter 10-Q Litigation Disclosure Find below the Litigation and Other Contingencies footnote from the the Mar= ch 31, 2001 Form 10-Q. Please update the section of the disclosure for whi= ch you are responsible for inclusion in the second quarter 2001 Form 10Q . = Also, please let me know if there are any new items that should be conside= red. Please respond no later than Monday July 30. Thanks, Gary 3-6841 =09 3. LITIGATION AND OTHER CONTINGENCIES=20 Enron is a party to various claims and litigation, the significant items of= which are discussed below. Although no assurances can be given, Enron beli= eves, based on its experience to date and after considering appropriate res= erves that have been established, that the ultimate resolution of such item= s, individually or in the aggregate, will not have a material adverse impac= t on Enron's financial position or results of operations.=20 Litigation. In 1995, several parties (the Plaintiffs) filed suit in Harris = County District Court in Houston, Texas, against Intratex Gas Company (Intr= atex), Houston Pipe Line Company and Panhandle Gas Company (collectively, t= he Enron Defendants), each of which is a wholly-owned subsidiary of Enron. = The Plaintiffs were either sellers or royalty owners under numerous gas pur= chase contracts with Intratex, many of which have terminated. Early in 1996= , the case was severed by the Court into two matters to be tried (or otherw= ise resolved) separately. In the first matter, the Plaintiffs alleged that = the Enron Defendants committed fraud and negligent misrepresentation in con= nection with the "Panhandle program," a special marketing program establish= ed in the early 1980s. This case was tried in October 1996 and resulted in = a verdict for the Enron Defendants. In the second matter, the Plaintiffs al= lege that the Enron Defendants violated state regulatory requirements and c= ertain gas purchase contracts by failing to take the Plaintiffs' gas ratabl= y with other producers' gas at certain times between 1978 and 1988. The tri= al court certified a class action with respect to ratability claims. On Mar= ch 9, 2000, the Texas Supreme Court ruled that the trial court's class cert= ification was improper and remanded the case to the trial court. The Enron = Defendants deny the Plaintiffs' claims and have asserted various affirmativ= e defenses, including the statute of limitations. The Enron Defendants beli= eve that they have strong legal and factual defenses, and intend to vigorou= sly contest the claims. Although no assurances can be given, Enron believes= that the ultimate resolution of these matters will not have a material adv= erse effect on its financial position or results of operations.=20 On November 21, 1996, an explosion occurred in or around the Humberto Vidal= Building in San Juan, Puerto Rico. The explosion resulted in fatalities, b= odily injuries and damage to the building and surrounding property. San Jua= n Gas Company, Inc. (San Juan Gas), an Enron affiliate, operated a propane/= air distribution system in the vicinity, but did not provide service to the= building. Enron, San Juan Gas, four affiliates and their insurance carrier= s were named as defendants, along with several third parties, including The= Puerto Rico Aqueduct and Sewer Authority, Puerto Rico Telephone Company, H= eath Consultants Incorporated, Humberto Vidal, Inc. and their insurance car= riers, in numerous lawsuits filed in U.S. District Court for the District o= f Puerto Rico and the Superior Court of Puerto Rico. These suits seek damag= es for wrongful death, personal injury, business interruption and property = damage allegedly caused by the explosion. After nearly four years without d= etermining the cause of the explosion, all parties have agreed not to litig= ate further that issue, but to move these suits toward settlements or trial= s to determine whether each plaintiff was injured as a result of the explos= ion and, if so, the lawful damages attributable to such injury. The defenda= nts have agreed on a fund for settlements or final awards. Numerous claims = have been settled. Although no assurances can be given, Enron believes that= the ultimate resolution of these matters will not have a material adverse = effect on its financial position or results of operations.=20 Trojan Investment Recovery. In early 1993, Portland General Electric (PGE) = ceased commercial operation of the Trojan nuclear power generating facility= . The Oregon Public Utility Commission (OPUC) granted PGE, through a genera= l rate order, recovery of, and a return on, 87 percent of its remaining inv= estment in Trojan.=20 The OPUC's general rate order related to Trojan has been subject to litigat= ion in various state courts, including rulings by the Oregon Court of Appea= ls and petitions to the Oregon Supreme Court filed by parties opposed to th= e OPUC's order, including the Utility Reform Project(URP) and the Citizens = Utility Board (CUB).=20 In August 2000, PGE entered into agreements with the CUB and the staff of t= he OPUC to settle the litigation related to PGE's recovery of its investmen= t in the Trojan plant. Under the agreements, the CUB agreed to withdraw fro= m the litigation and to support the settlement as the means to resolve the = Trojan litigation. The OPUC approved the accounting and ratemaking elements= of the settlement on September 29, 2000. As a result of these approvals, P= GE's investment in Trojan is no longer included in rates charged to custome= rs, either through a return on or a return of that investment. Collection o= f ongoing decommissioning costs at Trojan is not affected by the settlement= agreements or the September 29, 2000 OPUC order. With the CUB's withdrawal= , the URP is the one remaining significant adverse party in the litigation.= The URP has indicated that it plans to continue to challenge the OPUC orde= r allowing PGE recovery of and a return on its investment in Trojan.=20 Enron cannot predict the outcome of these actions. Although no assurances c= an be given, Enron believes that the ultimate resolution of these matters w= ill not have a material adverse effect on its financial position or results= of operations.=20 Environmental Matters. Enron is subject to extensive federal, state and loc= al environmental laws and regulations. These laws and regulations require e= xpenditures in connection with the construction of new facilities, the oper= ation of existing facilities and for remediation at various operating sites= . The implementation of the Clean Air Act Amendments is expected to result = in increased operating expenses. These increased operating expenses are not= expected to have a material impact on Enron's financial position or result= s of operations. Enron's natural gas pipeline companies conduct soil and gr= oundwater remediation on a number of their facilities. Enron does not expec= t to incur material expenditures in connection with soil and groundwater re= mediation.
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