fyi
----- Forwarded by Richard B Sanders/HOU/ECT on 09/01/2000 10:59 AM -----

	RTellis@milbank.com
	08/31/2000 08:32 PM
		 
		 To: Richard.B.Sanders@enron.com
		 cc: SHoward@milbank.com
		 Subject: Izower Deposition Day 1




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.

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