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Date: Fri, 16 Mar 2001 09:01:51 -0600
From: "Tracey Bradley" <tbradley@bracepatt.com>
To: "Paul Fox" <pfox@bracepatt.com>
Cc: "Alfredo Perez" <aperez@bracepatt.com>, "Jeffrey Watkiss" 
<dwatkiss@bracepatt.com>, "Mark Evans" <mevans@bracepatt.com>, "Ronald 
Carroll" <rcarroll@bracepatt.com>
Subject: AP - Edison Creditor Secures Plant Lien
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Thursday March 15, 9:14 pm Eastern Time

Edison Creditor Secures Plant Lien

By LESLIE GORNSTEIN
AP Business Writer

LOS ANGELES (AP) -- Breaking away from a pack of creditors owed billions by 
Southern California Edison, Caithness Energy got permission Wednesday to 
secure a lien against one of the utility's plants.

The judgment lets the New York-based electricity supplier to attach a partial 
claim on an Edison facility in Laughlin, Nev. -- a move that could spur 
bigger creditors to launch similarly aggressive approaches or even force 
Edison into bankruptcy.

Caithness, which has two Nevada plants owed $20 million by Edison, was 
allowed to attach the lien by U.S. District Judge Lloyd George of Las Vegas.

Once it becomes final in the next few days, the claim will be the first lien 
successfully placed against an Edison asset since California's energy crisis 
began last year.

An Edison spokesman said the utility will seek a stay of the order next week.

A lien allows a creditor a better chance of getting paid by laying claim to 
all or a portion of any future sale of a property. The judge allowed 
Caithness to file for a 56 percent interest in the plant, which employs 309 
people and is valued at $530 million.

The energy was used by Edison to feed California's energy grid, Caithness 
attorney Philip Korologos said Thursday.

Edison owes Caithness a total of $100 million, and another $20 million bill 
will come due at the end of March, Korologos said.

``They took delivery of the power and they are supposed to pay us for the 
power,'' Korologos said.

But whether Caithness will go after Edison's California assets is far from 
certain. Korologos said he believed that some form of additional mediation is 
required for California liens that might make such an option less attractive 
in the utility's home state.

Edison's bigger creditors, including Reliant Energy of Houston, declined to 
speculate on whether they will employ a similar tactic.

But industry experts said that the Caithness move could cause other, bigger 
creditors to feel pressure to act more aggressively on behalf of 
shareholders. The law requires only three major creditors to band together to 
force Edison into involuntary bankruptcy; the utility has said it does not 
intend to file on its own.

So far, most creditors have chosen to simply wait, or ``forbear,'' on the 
Edison debts, having fielded repeated pleas by Edison to do so. At least four 
creditors or groups of creditors have sued the utility for money owed but 
have taken no further action.

A New York-based creditor last month unsuccessfully tried to attach a lien to 
an Edison bank account without success, an Edison spokesman said.

Edison's problems began last year when, under California's 1996 deregulation 
law, investor-owned utilities were forced to buy power on the soaring spot 
market while limiting the rates they could charge consumers.

Edison and fellow utility Pacific Gas & Electric say they owe creditors a 
combined $14 billion.