Richard, earlier today I spoke with Barry Friedberg, Schultes' New York 
counsel to get some idea of what areas Schultes' Ohio counsel would be 
interested in during tomorrow's discussion.? Friedberg explained that the 
Ohio counsel are "classic plaintiff's lawyers" - they are not that familiar 
with the issues and will tend to ask broad generalized questions.? Friedberg 
also noted that they may be unaware that Enron is a defendant in the two 
California actions and will likely be unaware that Enron is the only 
defendant who has not cross-complained against Schultes. For purposes of 
insuring that any deposition testimony in the Ohio case is not used against 
any defendant in the bondholders' litigation,? Friedberg thought it would be 
a good idea to try a limit any discussion to post-closing events and, more 
specifically, whether Enron personnel were privy to any discussions with SDI 
or McDonald regarding (1) the decision to fire Schultes, (2) Schultes' 
alleged dishonesty and (3) Schultes' alleged incompetence.? Friedberg 
explained that Busse's defenses to the defamation and wrongful termination 
claims are (1) that he did not make any defamatory statements and (2) if he 
did, they were true.? The problem with the second defense is that it may 
affect our defenses in the bondholders' litigation.? If Enron or others were 
aware that Schultes was dishonest or incompetent it will be important to know 
when and how they learned of such information.? Ideally, they learned it 
after the closing and only through discussions between McDonald and SDI.


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