Mark/Bryan

Based on our meeting with Sullivan & Cromwell, a few points occur to me 
(these may well be in the "obvious" category!)

we generally don't need to worry at all about non-energy reference credits, 
since we won't have any confidential info about them (this group will over 
time become the vast majority)
there are (as I understand it) about 200 energy reference credits we are 
looking at and this class (unlike the non-energy credits) is unlikely to grow 
substantially
of the 200 energy credits, a number should be definite "ins" (eg the high 
profile, big players with whom we don't have a special relationship) and a 
number will be "outs" (ie where the relationship is much too close to risk 
quoting on them) 
perhaps we could initially launch the product with the "ins" and, over time, 
add the residual category who get the all clear.

I agree that evaluating our relationships with individual reference entities 
may be tricky and time consuming.  Perhaps the best place to start might be 
with the business person who has overall responsibility for the relationship 
in question and should have a view on the nature of the relationship and 
whether we have any info about the entity which is sensitive.  It may well be 
that we have confidentiality agreements in place, but not much confidential 
info passing under them.

Grateful for any views on this.

Paul


To: Bryan Seyfried/LON/ECT@ECT
cc: Mark E Haedicke/HOU/ECT@ECT, Louise Kitchen/LON/ECT@ECT, Paul 
Simons/LON/ECT@ECT 

Subject: Re: Consent  

Apparently there was some miscommunication.  It was very clear to me after 
our meeting in Louise's office that with respect to proposed Reference 
Entities with which Enron has an existing business relationship you were 
going to add the consent to the notice letter.  It was that consent that was 
to dramatically speed up the process of determining which Reference Entities 
could be listed.  As we discussed last week, without that consent each 
proposed Reference Entity must be evaluated separately regarding whether or 
not a confidentiality agreement is in place and whether or not the existing 
business relationship is extensive enough to require consent.  Neither of 
these evaluations will be easy or quick.  While Enron North America has been 
reasonably good about compiling lists of confidentiality agreements, it is by 
no means clear that all other Enron entities have done so.  We have not yet 
determined a process for evaluating the extent of the existing business 
relationships with our customers but that process will necessarily require 
significant amounts of legal and commercial time at a high enough level to 
make important judgment calls.

My impression was that you were willing to add the consents to the notice 
letters since in one fell swoop it resolved a difficult legal issue and moved 
your earliest possible launch date forward by weeks if not months but also on 
the assumption that if a customer was not willing to give us their consent we 
should not be taking the commercial risk that it was precisely those 
customers whose relationships would be jeopardized by proceeding to use them 
as a Reference Entity.

We will now move forward to develop the processes necessary to conduct the 
evaluations mentioned above.  Please send the list of proposed Reference 
Entities as soon as possible.



Bryan Seyfried
01/19/2000 06:35 AM
To: Mark Taylor/HOU/ECT@ECT, Louise Kitchen/LON/ECT@ECT
cc: Paul Simons/LON/ECT@ECT 
Subject: Consent

Just to clarify, we do not intend to ask for consent from every reference 
credit, we do intend to send introductory letters to the relevant parties at 
the initial set of reference credits which notifies them of our intentions 
and why it is good for them.  My hope is that there are very few reference 
credits that we need to get consent from and then we can make the commercial 
decision of whether it is better to get consent or not quote on them.  

As an initial step, I think we need to understand which reference credits 
have confidentiality agreements in place and determine those names that we 
have a potential fiduciary responsibility.  The latter obviously will not be 
black and white but hopefully we can make some progress.  I would expect that 
are really deep relationships are likely to be with either really small 
counterparties or a very small subset of our large counterparties.

Hopefully I am restating what everyone already thought but if not apologies 
for the miscommunication.

Call me if you want to discuss further.

bs