Generally speaking we have only documented that kind of concern when there 
were separate legal entities involved (like getting a comfort letter or 
guaranty from EI when ECT had to do the swap for one of their deals).  I 
think we can get away with pointing out the issue to both commercial sides.



	Mary Cook
	12/14/2000 03:30 PM
		 
		 To: Mark Taylor/HOU/ECT@ECT
		 cc: 
		 Subject: VPP Vehicle

The VPP swap vehicle is being structured such that if a major adverse 
reservoir event occurs (no gas!) and as a result the Partnership (owned by 
Trust/banks) cannot fund the swap payments, then as swap default occurs and 
if termination payment is owed to ENA, the termination payment will in 
essence be subordinated to the bank loan repayment.  This is clearly a free 
walk on ENA on the swap (ENA in essence wears reservoir risk on the swap).  
If this is the commercial deal, so be it.  However, I am concerned that the 
"$ fallout" in such event be charged internally to the finance originators 
and not the trading arm, but I do not know who to talk to about this.  Any 
ideas?  Or should I assume it resolves itself internally as and when it may 
occur?  
Mary


Cordially,
Mary Cook
Enron North America Corp.
1400 Smith, 38th Floor, Legal
Houston, Texas   77002-7361
(713) 345-7732 (phone)
(713) 646-3490 (fax)
mary.cook@enron.com