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Enron Mail |
The recent amendments to the Commodity Exchange Act essentially codified the
prior regulations on this point. If this technique was effective in 1998 it should still be effective today. Guenther Klar 05/03/2001 03:32 PM To: Jonathan Marsh/EU/Enron@Enron, Mark Taylor/HOU/ECT@ECT cc: Catharina Clabots/LON/ECT@ECT, Julie Watt/EU/Enron@Enron, Janine Juggins/LON/ECT@ECT Subject: Reorg - Capitalisation of LLC here's the note i referred to in my email just now. ---------------------- Forwarded by Guenther Klar/LON/ECT on 03/05/2001 21:31 --------------------------- Rajen Shah 03/05/2001 17:35 To: Guenther Klar/LON/ECT@ECT cc: Subject: Reorg - Capitalisation of LLC I think there is a fax from Doug Harris on the reorg file with the CFTC rules. I will try to find it. ---------------------- Forwarded by Rajen Shah/LON/ECT on 03/05/2001 17:35 --------------------------- Rajen Shah 15/12/1998 17:53 To: Rod Sayers/LON/ECT@ECT, Paul Simons/LON/ECT@ECT cc: Subject: Reorg - Capitalisation of LLC Telecon with Douglas Harris (AA New York): 1. The "$10m total assets" requirement technically needs to be satisfied at all times. 2. No clear definition of total assets but his view is that total assets on a US GAAP basis should be satisfactory. 3. If the LLC were to issue an interest free note to an Affiliate and on lends the proceeds to Affiliate 2 then the receivable from Affiliate 2 would qualify for the $10m total assets test. 4. If the LLC were to issue an interest free note to an Affiliate and the proceeds are used to fund on going trading then if due to losses total assets were to fall below $10m then technically LLC would need to top up total assets for the losses incurred. It would appear from the above that the most effective route is to fund the LLC by way of an interest free loan and for the LLC to on lend to affiliates.
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