Enron Says It May Have to Pay Off $690 Mln Note Next Week
Bloomberg, 11/19/01
USA: INTERVIEW-Pepco sees electricity deregulation slowing.
Reuters English News Service, 11/19/01
Lawmaker/Andersen -2: Co 'Confident' About Quality
Dow Jones News Service,  11/19/01
Some Pension Funds Consider Legal Action Against Enron
Dow Jones Business News, 11/19/01
Gold Bennett Cera & Sidener LLP Announces Class Action Lawsuit Against Enron Corporation and Certain Officers and Directors
PR Newswire, 11/19/01
USA: UPDATE 2-Congressman urges probe of Andersen on Enron.
Reuters English News Service, 11/19/01
Enron delays closing Indian plant after creditors' legal action
AFX News, 11/19/01
USA company - Enron's trials have just begun.
EIU Viewswire, 11/19/01
$1 Billion Secured Credit Hasn't Calmed Fears About Enron
High Yield Report, 11/19/01
Kaplan Fox Expands Class Period For Investors Who Purchased Enron Corp. Securities
Internet Wire, 11/19/01
DYNEGY TO BUY ENRON: CHEVRONTEXACO PROVIDES $2.5 BILLION CASH FLOW
Octane Week, 11/19/01
ENRON MELTDOWN & HIGH GAS PRICES?
Gas Processors Report, 11/19/01
U.S.'s Dingell Seeks Probe of Arthur Andersen, Dow Jones Says
Bloomberg, 11/19/01

Enron's Azurix May Have to Sell Assets If It Can't Borrow
Bloomberg, 11/19/01



Enron Says It May Have to Pay Off $690 Mln Note Next Week
2001-11-19 18:16 (New York)

Enron Says It May Have to Pay Off $690 Mln Note Next Week

     Houston, Nov. 19 (Bloomberg) -- Enron said a drop in its
credit rating may force it to pay off a $690 million note by Nov.
27 if it doesn't find collateral to guarantee the debt.

     Repayment was triggered by the Nov. 12 downgrade in Enron's
senior unsecured debt rating to BBB- by Standard & Poor's, the
company said in a securities filing.

     Enron must post collateral equal to the amount of the note or
repay it, the Securities and Exchange Commission filing said.

    Without repayment, partners in a Limited Partnership that owns
natural gas assets in Brazil can immediately begin to liquidate
the partnership's assets, Enron said. Enron said it's working with
lenders to come up with an acceptable agreement on the debt.

     A further drop in its debt rating, which would put it below
investment grade, would trigger repayment of $3.9 billion in debt
owed by two affiliated companies.

     The rating drop would trigger repayment of $2.4 billion in
debt owed by Osprey Trust, and $915 million owed by Marlin Water
Trust, the company said in the filing.

     Enron is being bought by Dynegy Inc. for $25 billion in stock
and debt. Enron also said in its filing that if shareholder
lawsuits result in judgments totaling more than $2 billion, the
Dynegy deal could collapse.

    The filing was released after the stock market closed.  Shares
of Houston-based Enron rose 6 cents to $9.06. Dynegy shares rose
$1.13 to $43.60. Shares of ChevronTexaco Corp., which owns 26
percent of Dynegy, fell 54 cents to $82.91.


USA: INTERVIEW-Pepco sees electricity deregulation slowing.
By Christopher Doering

11/19/2001
Reuters English News Service
(C) Reuters Limited 2001.
WASHINGTON, Nov 19 (Reuters) - Several states that delayed plans to deregulate power markets were scared off by the woes of beleaguered energy trader Enron Corp., California's failed electricity market restructuring, and the Sept. 11 attacks, the head of Potomac Electric Power Co. said on Monday. 
John Derrick, chief executive of Washington-based Pepco, said in an interview, while utility deregulation will eventually regain momentum, uncertainty in the market has left some states questioning the effectiveness of any near-term change to the volatile power market.
Several states have delayed power deregulation, including Nevada, Oregon, New Mexico, Oklahoma, Arkansas, West Virginia and Montana. 
"All things that are happening to the margin, whether it be California, 9-11 (the Sept. 11 attacks), or Enron , will tend to slow down changes that have gone down that path," Derrick said after addressing an Energy Department conference here on coal technology. 
Derrick was optimistic about the future of deregulation. "Where it already exists, it's working, and I think we'll stay the course," he said. 
To boost customer choice, 23 states and the District Columbia have deregulated retail electricity markets. Deregulation breaks up utility monopolies, giving customers a choice of providers and driving down prices. 
Electricity competition is set to begin in Texas, Illinois, Michigan, and Virginia next year. 
Derrick said state deregulation efforts will pick up momentum if consumers demand more choice and lower prices. 
"People who (live in a market that is deregulated), and move to a place where it doesn't exist, are going to say 'Gee, why can't I have it here'," Derrick said. 
"Customers are going to start to demand choice," he added. 
Pepco is part of the Pennsylvania, New Jersey, Maryland (PJM) power pool, which operates the electricity grid in the mid-Atlantic region. PJM, which currently coordinates a pooled generating capacity of more than 59,000 megawatts, plans to expand generating capacity by 25 percent in the next few years to meet demand. 
PJM also operates a wholesale electricity market with more than 200 buyers, sellers and traders. 
California dealt the first blow to electricity deregulation last year, when state power prices soared, bankrupting PG&E Corp.'s Pacific Gas & Electric unit, and forcing rolling blackouts to some customers. 
Experts have blamed the California power crisis on the state's ill-fated deregulation plan, which prohibited utilities from passing on wholesale price increases to consumers. 
The decline of Enron may slow restructuring because uncertain customers will stick with existing power suppliers rather than seek new energy providers.



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
Lawmaker/Andersen -2: Co 'Confident' About Quality

11/19/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
"Congressman Dingell may not be aware that accounting firms are required to report litigation involving allegations of audit failures to the quality-control inquiry committee of the SEC practice section, which the Public Oversight Board oversees," Andersen spokesman David Tabolt said after reviewing Dingell's request. 
Tabolt wasn't sure if Andersen has notified the committee of class-action litigation filed against the firm for its audit of Enron, but said it will do so within the required 30-day deadline.
After it is notified of any legal action, the inquiry committee must study the matter and determine if it represents evidence of systemic quality-control problems. 
"We are confident that this process will confirm the quality of our auditing processes," Tabolt said. 
-By Judith Burns, Dow Jones Newswires; 202-862-6692; judith.burns@dowjones.com



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
Some Pension Funds Consider Legal Action Against Enron
By Christiane Bird

11/19/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)
Dow Jones Newswires 
NEW YORK -- Some pension funds with major stakes in Enron Corp. are considering taking legal action against the Houston energy giant following its recent stock collapse and disclosures of possible conflicts of interest among management.
Other institutional investors are taking a more passive approach, waiting to see how developments unfold. 
Among those pension funds looking into possible lawsuits are the $112 billion New York State Common Retirement Fund and the five New York City pension funds, which handle a total of $85 billion in assets for the city's firefighters, police, teachers and other workers. The state fund holds about 2.1 million Enron (ENE) shares and the city funds hold about 2.9 million. 
"We're looking at a possible lawsuit, but we're not leaning one way or another," said Frank Sobrino, spokesman for the New York State Common Retirement Fund. 
"We're looking into [possible legal action], but nothing's been decided yet," said David Neustadt, spokesman for the New York City Comptroller's Office, which oversees the city's five pension funds. 
Barclays Global Investors, which manages about $790 billion, mostly for pension funds and other institutional clients, said it would join others in a class-action suit, but wouldn't be the lead plaintiff. Barclays is the fourth-largest investor in Enron, with about 21 million shares as of Sept. 30. 
"Our style doesn't lend itself to taking that lead role, but we would be members of a class suit," said Linda Selbach, head of corporate governance. As primarily a passive money manager, Barclays invests according to market forces, not according to company information, and so couldn't claim to have been misled by false information, she explained. 
However, "on the macro level, we've been very involved in the shaping of the law with respect to securities litigation, and would be again," she said. The company would be especially inclined to get involved if the suit promised to set a precedent for other cases further down the line, she said. 
Pension Funds Among Largest Enron Investors 
Institutional investors such as pension funds, mutual fund companies and money management firms are among the largest investors in Enron, once a top-performing company whose stock has plunged 89% year-to-date and is now the subject of a Securities and Exchange Commission probe into outside partnership deals. Several law firms already have sued the company on behalf of shareholders, accusing Enron of misleading investors and artificially inflating its share price. 
Last week, the $143 billion California Public Employees' Retirement System, or Calpers, issued a release stating their intention to oppose the appointment of any current Enron board member to the board of any company with which Enron may be contemplating a merger. 
The statement came following reports that Enron might be acquired by smaller rival Dynegy Inc. (DYN), and that Enron was seeking the right to appoint three members to the combined company board. 
"Until all of these issues are sorted out, the interests of shareholders are best served by retirement of all the current directors," Michael Flaherman, chair of Calpers' investment committee, said in the statement. 
However, Calpers has no comment regarding possible legal action against Enron, spokesman Brad Pacheco said. 
Calpers owns about three million shares of Enron and also invests in Dynegy. 
The $105 billion California State Teachers Retirement System, or Calstrs, is "taking a keen interest, and reviewing our holdings and options" regarding Enron, said a spokeswoman. The board has made no decisions yet, but plans to discuss the subject in a closed session at the next board meeting, she said. 
The $96 billion Florida Retirement System, which holds 9.7 million Enron shares, is "still evaluating the situation," spokeswoman Lee Baldwin said. "Our feeling is that there's so much news going on, and the decision is so far off, that we're waiting to see what will happen." 
Similarly, among mutual fund companies, Janus Capital Corp., the second-largest holder of Enron with 41.4 million shares as of Sept. 30, is not yet considering legal action, as a spokeswoman said it would be premature. 
Alliance Capital Management LP, the largest holder of Enron with 42.9 million shares as of Sept. 30, and Fidelity Management & Research, the fifth-largest holder with 20.8 million shares as of Sept. 30, said that they have policies of not commenting on individual company holdings. The largest actively managed U.S. mutual fund, the $71.6 billion Fidelity Magellan fund, held 5.7 million shares of Enron as of Sept. 30, according to a semiannual report released last week. 
-- John Shipman and Frank Byrt contributed to this article. 
Write to Christiane Bird at christiane.bird@dowjones.com 
Copyright (c) 2001 Dow Jones & Company, Inc. 
All Rights Reserved.



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
Gold Bennett Cera & Sidener LLP Announces Class Action Lawsuit Against Enron Corporation and Certain Officers and Directors

11/19/2001
PR Newswire
(Copyright (c) 2001, PR Newswire)
SAN FRANCISCO, Nov. 19 /PRNewswire/ -- Gold Bennett Cera & Sidener LLP announced today that it has filed a class action in the United States District Court Southern District of Texas, Houston Division, Case No. H-01-4009, on behalf of purchasers of Enron Corporation (NYSE: ENE) ("Enron") common stock during the period of November 15, 1998 through November 8, 2001, inclusive (the "Class Period"). Plaintiff seeks to recover damages on behalf of all purchasers of Enron securities during the Class Period. 
The plaintiff is represented by the San Francisco law firm of Gold Bennett Cera & Sidener LLP. For over 30 years, Gold Bennett Cera & Sidener LLP and its predecessors have successfully engaged in complex commercial litigation, including shareholder, consumer and antitrust class actions, in federal and state courts throughout the United States, recovering hundreds of millions of dollars for its clients. Purchasers of Enron securities may http://www.gbcsf.com for additional information about the Firm's practice.
The Complaint alleges that Enron and certain officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Specifically, the Complaint alleges that defendants misrepresented and/or omitted to state material facts regarding Enron's business and financial results during the Class Period to artificially inflate and maintain the price of the Company's securities. 
On November 8, 2001, prior to the opening of the market, Enron shocked the investing public by announcing that it would restate its financial results for 1997, 1998, 1999 and 2000, and the first two quarters of 2001 to correct accounting irregularities which had caused Enron's to overstate its net income by hundreds of millions of dollars. Enron also admitted that the audit reports which had been issued for its financial reports during those periods could not be relied upon. As a result of the restatements, Enron was forced to reduce shareholders' equity by $1.2 billion. Upon revelation of this news, Enron's stock plummeted to $8.41 per share, down from a Class Period high of approximately $90 per share. 
If you are a member of the Class described above, you may, no later than December 21, 2001, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this case or your rights or interests, please contact Gwendolyn Giblin, Esq. of Gold Bennett Cera & Sidener LLP, 595 Market Street, Suite 2300, San Francisco, California 94105, by telephone at 800-778-1822 or 415-777-2230, by facsimile at 415-777-5189 or by e-mail at Enron@gbcsf.com. 
MAKE YOUR OPINION COUNT - Click Here 
http://tbutton.prnewswire.com/prn/11690X53166224

/CONTACT: Gwendolyn Giblin, Esq. of Gold Bennett Cera & Sidener LLP, 800-778-1822, or +1-415-777-2230, or fax, +1-415-777-5189 or Enron@gbcsf.com/ 16:11 EST 


Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
USA: UPDATE 2-Congressman urges probe of Andersen on Enron.
By Kevin Drawbaugh

11/19/2001
Reuters English News Service
(C) Reuters Limited 2001.
WASHINGTON, Nov 19 (Reuters) - A U.S. Congressman has called for an investigation of Big Five accounting firm Arthur Andersen LLP in connection with its audits of Enron Corp. and Waste Management Inc. , according to a letter released on Monday. 
Turning up the heat under the conflict-of-interest issue among the world's largest bean-counters, Rep. John Dingell asked the Public Oversight Board for "an oversight review or special investigation of Arthur Andersen LLP," said the letter made available to Reuters.
Dingell also asked the board to look into peer reviews of Arthur Andersen conducted in recent years by other accounting firms, including Deloitte & Touche, and questioned the value of a triennial peer review process in place since 1978. 
"The best accounting standards in the world are meaningless if the accounting and audit processes are so inept or corrupt that they produce unreliable numbers and untruthful reporting," wrote Dingell, a Michigan Democrat, in the letter. 
"I request that POB's investigation or review include adequate, transparent and public disclosure of all significant issues identified," Dingell wrote. 
As accounting has consolidated into fewer and larger firms with more lines of business from auditing to consulting, it has come under increasing fire on the conflict-of-interest issue. The Dingell letter is only the latest in a continuing barrage of criticism leveled in recent years at Big Five firms. 
Arthur Andersen, based in Chicago, was auditor to Houston energy trading giant Enron, rocked in recent weeks by a Securities and Exchange Commission probe of certain outside partnership deals involving company officers. Enron's stock price has plunged, several managers have resigned and numerous shareholder lawsuits are pending. Enron earlier this month said it planned to be bought out by rival Dynegy Inc. . 
Critics have said Arthur Andersen should have done more as Enron's auditor to draw investors' attention to its unusual finances. A lawsuit filed in Oregon alleged Arthur Andersen's judgment was swayed by lucrative consulting fees that it was collecting from Enron while it was also being paid as auditor. 
ANDERSEN SAYS CONFIDENT IN PROCESS 
Responding to Dingell, Andersen spokesman David Tabolt said accounting firms must report litigation involving allegations of audit failures within 30 days to a committee of the SEC's practice section, which the Public Oversight Board oversees. 
"Under the profession's self-regulatory processes, which the POB oversees, the committee is responsible for conducting an inquiry to determine whether the matters that are the subject of litigation indicate systemic quality control problems that need to be addressed either by the firm involved or by the profession," Tabolt said. 
"We are confident that this process will confirm the quality of our auditing processes," he said. 
After the SEC said last month that it was investigating Enron, the company appointed a special internal committee to look into the unusual partnership deals at the heart of the probe. Deloitte & Touche, also a Big Five accounting firm, was named to assist the committee in its inquiry, Enron said. 
But, according to Dingell, Deloitte is conducting a triennial peer review of Andersen under a system set up in the 1970s to ensure quality accounting. The peer review process is also supervised by the Public Oversight Board, based in Connecticut. Neither the board nor Deloitte could be reached. 
Dingell said Deloitte's dual roles as peer reviewer of Andersen and as internal investigator of its audit client Enron raise further questions of potential conflicts of interest. 
"Given the appearance of conflicts of interest, the public record to date regarding allegations of professional malpractice or worse by Andersen in both the Waste Management fraud and the evolving Enron Corp. accounting debacle, as well as the considerable damage to investors, there appears to be little reason for the public to have faith in Andersen or the peer review process," wrote Dingell, ranking member of the House Committee on Energy and Commerce. 
In June, Arthur Andersen was fined $7 million by the SEC to settle charges that it filed false and misleading audit reports of Waste Management, a garbage hauling concern, in the largest ever civil penalty against a Big Five accounting firm. Andersen did not admit or deny the charges.



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
Enron delays closing Indian plant after creditors' legal action

11/19/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
BOMBAY (AFX) - Enron Corp's Indian subsidiary said it had to delay serving a final termination notice to close its power project in western Maharashtra state after local creditors filed legal action. 
The Dabhol Power Company Ltd (DPC) was originally going to serve the notice to Maharashtra State's Electricity Board (MSEB) after today, when the six-month deadline for resolving a payment dispute ends, an Enron official told Agence France-Presse.
Now, however, it has to wait until after Dec 3, because Indian banks and financial institutions that have lent money to Dabhol Power recently filed a lawsuit to ensure they get their funds back. 
"The domestic lenders have gone to the court and secured a stay order against our final notice till their next nearing which is on December 3," an Enron official said. 
"We are working on a strategy to help resolve the issue as soon as possible, but obviously can't disclose it now." 
The lawsuit was filed by the State Bank of India, ICICI Ltd, the Industrial Development Bank of India and IFCI Ltd. 
The Enron official said the bankers have gone to court demanding an immediate resumption of work at the plant to ensure cash flow and to help the owners repay money owed to the lenders. 
jds/cmr/jsa 
For more information and to contact AFX: www.afxnews.com and www.afxpress.com



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
USA company - Enron's trials have just begun.

11/19/2001
EIU Viewswire
(c) 2001 The Economist Intelligence Unit Limited. All rights reserved.
COUNTRY BRIEFING 
FROM THE ECONOMIST
NEW YORK: Lawyers are swarming all over Enron's old financial statements and press releases in the hope of reaping huge fees from securities litigation. More than 20 class-action lawsuits have been filed in recent weeks, and new ones are popping up every day. A formal process has been started to consolidate litigation in Houston, where the troubled energy company is based, with all lawyers interested in the case required to stake their claims by December 21st. 
The broadest accusations will be of fraud and material misstatement, legal ways of saying that the company's financial statements were garbage. This week, Enron's founder and chairman, Kenneth Lay, decided to forgo a severance package worth over $60m while admitting that the company's problems "had been exacerbated by the extensive use of debt capital, both on and off the balance sheet". America's Financial Accounting Standards Board (FASB) is looking again at off-balance-sheet financing, having fretted about it on and off for a decade. 
There will also be charges of insider trading, because even as Enron was issuing securities amid glowing profits reports, top executives were dumping over $1 billion of Enron shares to "unsuspecting investors", a group that includes anybody who, however briefly, has held one of the company's 750m shares in the past two years. "The number of class members will be huge," says Maurice Pesso, a lawyer at a New York firm that has filed a claim. 
There are, however, limits to the company's liability. It has already restated its results going back five years, but federal law restricts litigation to the past three. Moreover, Enron will not take the rap alone. Its auditor, Arthur Andersen (now plain Andersen), is also named as a defendant in at least one of the complaints already filed. The litigation comes after a rough decade for Andersen. It has had to pay hundreds of millions of dollars in settlements after sloppy audits on such companies as Waste Management, Sunbeam and Discovery Zone. 
Because Enron evolved from an energy company into a financial firm, it became much like an unregulated bank. The lack of supervision meant that the role of the company's auditor was crucial. Andersen was certainly paid as if it was. In 2000, it collected $25m for auditing Enron's books and another $27m for consulting services. Now how do you account for that? 
SOURCE: The Economist.



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
$1 Billion Secured Credit Hasn't Calmed Fears About Enron
John Hintze

11/19/2001
High Yield Report
Copyright (c) 2001 Thomson Financial, Inc. All Rights Reserved.
A new $1 billion loan has not done much to calm market participants' fears about the future of Enron Corp. Many bankers are concerned about the energy giant's liquidity, and fear the worst may be yet to come. 
The banks in charge of Enron, though, are tight lipped. Lead arrangers for the $1 billion loan - JP Morgan Chase and Citibank/SSB - had scheduled a bank meeting for Nov. 9, but it was postponed, and officials at both institutions declined to say whether or not a new meeting has been set. Market players are speculating that the meeting was postponed partly because of a fear that new troubles may arise as outside auditors review the company's books. That process will take at least a few weeks, Enron chairman and CEO Kenneth Lay said in a conference call Nov. 15.
To be sure, Enron is not in the best financial position. The company has a $1.75 billion loan coming due in April, a facility that will be nearly impossible to refinance at that date if any components of its complicated rescue package fall through in the meantime (this includes a $1.5 billion cash infusion by Dynegy, which last week agreed to buy Enron; another $500 million to $1 billion in private equity that Lay said was in negotiations last week; and the success of a planned $800 million sale of assets by year's end). 
The $1.75 billion loan is part of a $3 billion revolving facility, also led by JP Morgan Chase and Citibank/SSB, that was drawn down in October to pay off about $1.8 billion in commercial paper obligations and calm the market's concerns about Enron's liquidity. The facility also includes a $1.25 billion portion that matures in 2005. 
"One of the big credit issues from a corporate standpoint is Enron's ability to renew the 364-day facility that matures in 2002," said Ralph Pellechia, a credit analyst at Fitch. 
The lead banks declined to comment on the ongoing loan discussions, which include the already agreed to $1 billion facility that is secured by Enron pipeline assets, and other bankers in the close-knit loan syndication community admitted to being in the dark. 
It is likely, though, that the discussions have included an attempt to address bankers' concerns about the loan maturing in five months, Pellecchia said. 
"I think that in conjunction with the new $1 billion loan, they are attempting to address the revolver," Pellecchia said. 
The $1 billion loan, hammered out in late October, was expected to be syndicated among a small, select group of lenders. Incorporating the maturing revolver into the current solution would likely bring in a wider circle of banks, one banker said, noting that "just about everybody was in that [existing] deal." 
JPM/Citi Must Save Enron 
However the financing unfolds, arrangers JP Morgan Chase and Citibank/SSB's tight control of the deal reflects the banks' urgency in aiding a major corporate client to which they have a broad range of business exposure. That exposure extends beyond corporate loans to credit derivatives and short-term loans financing the company's myriad energy trading-related transactions. 
"[JP Morgan and Citi] have the most to gain but also the most to lose with respect to Enron," said one rival banker, adding that the banks' rapid response to Enron's deteriorating situation reflected the importance of those relationships. "I was amazed how quickly that [$1 billion] deal came together, and how Enron - which never did anything secured - pledged its most valuable [pipeline] assets." 
The $1 billion loan is secured by Enron's Trans Western and Northern Natural Gas pipeline systems, the latter of which is also pledged to Dynegy for its $1.5 billion investment. 
"From a risk standpoint, it's probably the best peace of Enron paper that Chase and Citi have - it's the only secured stuff out there," said one banker. But despite the impressive collateral, the $1 billion loan was priced attractively at 250 basis points over Libor, he said. "I think it's a comment on how bad the news was. Enron's going to have to put up one of its major jewels for a $1 billion credit at Libor plus 250." 
In addition to playing major roles in financing Enron's off-balance sheet ventures, such as the Dahbol power project in India, JP Morgan Chase and Citibank/SSB have also been major players in the company's complicated financing initiatives. For example, Citibank/SSB runs Enron's Yosemite credit-linked note program and, along with JP Morgan Chase, is active in other Enron-related credit derivative business. 
A recent research report by Goldman Sachs noted that the one-stop shop concept closely tied the banks to Enron and has also made them crucial in these trying times. 
"The two banks most involved with Enron in terms of magnitude of credit/derivatives exposure, Citi and JP Morgan, were also obviously involved in selling the company, with each acting as a financial advisor in the sale," the report stated. "The banks were critical (given Enron's liquidity needs and the related high risk to further rating agency downgrades) and likely influential to the outcome reached to sell the company as a means to sustain the operations of Enron and protect all creditors involved. Consequently, in a way, this is another win for the bank/broker model," the report says. 
In a separate report, Goldman's fixed income power analyst, Robert Rubin, said that despite Enron's questionable business practices bringing it close to the brink, a merger that maintains its core energy market-making operations is preferable to leaving a vacuum in that arena. He added that despite concerns raised by the ratings agencies and other parties, Goldman believes the merger will close. 
"The balance sheet of a combined company could be strong, if Enron completes its asset sales," Fitch's Pellecchia said. "But there are still a lot of moving pieces."



Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
Kaplan Fox Expands Class Period For Investors Who Purchased Enron Corp. Securities

11/19/2001
Internet Wire
(c) Copyright 2001 Internet Wire, Inc.
NEW YORK, NY -- (INTERNET WIRE) -- 19-11-2001 -- Kaplan Fox (kaplanfox.com) has filed a class action against Enron Corp. and certain of the Company's officers and directors in the United States District Court for the Southern District of Texas. The suit is brought on behalf of all persons or entities who purchased securities of Enron Corporation ("Enron") (NYSE: ENE) between January 20, 1998 and November 8, 2001, inclusive (the "Class Period"). 
The complaint charges Enron Corp. and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, the defendants engaged in asset and securities sales to closely related affiliates and interested parties, which disguised Enron's true financial position. Many of the details of these transactions were hidden from the public. Defendants used these asset sales to falsely improve Enron's balance sheet, thereby maintaining Enron shares at an artificially inflated price. Certain Enron executives, who held positions in the affiliates that presented clear conflicts of interest, reaped millions of dollars in personal gains from these transactions.
The complaint further alleges that during the Class Period, defendants made misleading statements regarding the potential value of Enron's Broadband business, in order to artificially boost Enron's share price. With knowledge that Enron's Broadband business would never post a profit and was seriously overvalued, Defendants continued to make misleading statements about the Broadband business in order to maintain the share price at its artificially inflated levels. Defendants used the artificially inflated value of Enron's Broadband business in order to gain millions of dollars in financing. Defendants failed to disclose the risk of these financing arrangements. Defendants hid the true nature of Enron's earnings, its hedging, its businesses, and the correct state of Enron's finances from its investors and the market, further artificially inflating Enron's share price. While the stock was artificially inflated for the above reasons, Enron executives engaged in extensive insider trading, gaining personal proceeds of more than $482 million during the Class Period, before the public became aware of the above practices. 
Plaintiff seeks to recover damages on behalf of the Class and is represented by Kaplan Fox & Kilsheimer LLP. Our firm, with offices in New York, San Francisco, Chicago and New Jersey has many years of experience in prosecuting investor class actions and actions involving financial fraud. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com 
If you are a member of the Class, you may move the court no later than December 21, 2001 to serve as a lead plaintiff for the Class. In order to serve as a lead plaintiff, you must meet certain legal requirements. 
If you have any questions about this Notice, the action, your rights, or your interests, please e-mail us at mail@kaplanfox.com or contact: 
Kaplan Fox & Kilsheimer LLP - 805 Third Avenue, 22nd Floor - New York, NY 10022 
Kaplan Fox & Kilsheimer LLP - 100 Pine Street, 26th Floor - San Francisco, CA 94111 
Contact: Frederic S. Fox, Esq, Kaplan Fox & Kilsheimer LLP 
Voice: 800-290-1952 
Fax: 212-687-7714 
Email: mail@kaplanfox.com 
or 
Contact: Laurence D. King, Esq., Kaplan Fox & Kilsheimer LLP 
Voice: 415-336-1238 
Fax: 415-677-1233 
Email: mail@kaplanfox.com 




Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
DYNEGY TO BUY ENRON: CHEVRONTEXACO PROVIDES $2.5 BILLION CASH FLOW

11/19/2001
Octane Week
(c) 2001 Phillips Business Information, Inc.
ChevronTexaco Corp. is backing Dynegy Inc.'s proposed buyout of ailing Enron Corp. by putting $2.5 billion of new equity in Dynegy to support the deal. ChevronTexaco, which currently owns approximately 26% of Dynegy's outstanding common stock, will invest $1.5 billion immediately. The $1 billion balance would be made at the closing of the Dynegy-Enron merger. 
"Our relationship with Dynegy has proven to be highly beneficial for both companies, and we are optimistic we will continue to see comparable or better performance in the future," said David O'Reilly, chairman and CEO of ChevronTexaco. Chevron first took a stake in Dynegy in 1996. Dynegy is one of the industry's largest marketers and traders of natural gas, power and coal, as well as a leading producer of electricity. Dynegy Midstream Services is one of the largest marketers and producers of natural gas liquids.
"We are also hopeful that the combination of Dynegy and Enron will restore market and credit confidence in this important energy sector," O'Reilly continued. In October, the Securities and Exchange Commission began investigating Enron's relationship with two questionable partnerships once run by its former Chief Financial Officer Andrew Fastow. In November, Enron revealed that certain off-balance sheet entities should have been included in its financial statements, and the company would restate four years worth of filings The company's stock price plunged from a 52- week peak of $84.87 to $7 two weeks ago. Shell was reported at one time to be a potential buyer of Enron. 
Together, Dynegy and Enron have natural gas sales of approximately 40 billion cubic feet per day and 25,000 miles of gas pipelines. 
-Carol Cole 




Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	
ENRON MELTDOWN & HIGH GAS PRICES?

11/19/2001
Gas Processors Report
(c) 2001 Phillips Business Information, Inc.
October Henry Hub Bidweek Cash Price $1.87, November $3.16. Why? 
Over the past several weeks there have been several articles in the trade press about how the wholesale markets for natural gas and electricity, where Enron holds a commanding 25% market share, have been "unaffected" by the crisis enfolding the Houston trading giant. Enron was having no trouble during October finding counterparties for its trades, so not to worry, there was no lack of liquidity plaguing the market. Gas prices were responding "normally to supply and demand fundamentals." So the rosy scenario observers were saying, anyway.
Excuse us? November's bid week price was a full 70% over October's, and we can find no earthly fundamental reason for that surge. This had nothing to do with fundamental supply and demand. The weather during October was warm; storage was chock-full, so much so that little could be injected because cavern pressures were too high. Sure, there was a lot of weather hype about a cold winter coming, but that was only a forecast. That was meaningless even if it came true, because the winter would have to be 7-8% colder than normal just to burn up the 375 billion cubic feet (Bcf) surplus already in storage, to get next April's inventories in line with last April's levels. Anybody could see that surplus was also due to get much bigger by the end of November because there were huge 70-90 Bcf weekly withdrawals last year due to the fact that month was bitterly cold in 2000. 
In face of all those bearish facts, which could have been willing to bid cash prices up at spot for most of October, then bid them up even higher during the last week, which was bid week for November? We are talking about obligations that committed the buyers for baseload supply for the entire month of November - not just a spot price for a day or two of swing supply. No Big Storage Arbitrage Game, Either 
No, the cash market strength couldn't be explained by the arbitrage game of buying cash gas cheap, injecting it into storage and then shorting the out months' futures to lock in a margin. There wasn't much of a gap between the November screen index and cash prices. Most cash deals went at index minus a few cents during October. True, there was a nice gap between cash and the December futures screen, but there was not much chance to profit by this. Storage was so full that little volume could have been injected during October. 
So if someone says the price surge that month was all due to "the expected workings of supply and demand," we would have to ask him what he was smoking. Sunspots would have been a more likely explanation. Lack of Confidence in Enron as a Counterparty is a More Likely Explanation 
A better idea emerges after we note that spot prices continued high into November, in spite of continued record- breaking warmth. Henry Hub cash tags reached $3.24 on Friday, Nov. 2. Then that all reversed suddenly on Nov. 7-9, which was just when serious rumors that Dynegy was going to buy Enron and put it out of its misery began, and then became fact. By presstime last Wednesday, Nov. 14 -- a mere one week later -- the Henry Hub had collapsed all the way to $2.29 and was still falling like a stone -- getting back to where it should have been all October. Can this be just a coincidence? 
We think it likely that the reason prices were not that low in October is that with rumors of Enron troubles circulating, the wholesale market had been given a flat tire by a fear of a potential lack of liquidity. There could have been a perceived need for somebody with a better credit rating to back up the Enron traders who took the opposite side of one trade in four nationally. In fact, recent news reports say that after the first reports of Enron's problems emerged in mid-October, there was a falloff in the willingness of commercial users of gas (and electricity as well) to buy fixed- price supply contracts with Enron because the firm's corporate credit risk hampered its ability to hedge its obligations. "How comfortable would you feel signing a fixed-price deal with a company with no assets of its own to produce your gas or generate your power, and whose ability to obtain those supplies via futures or swaps was eroded because its credit was on the verge of being downgraded to junk?" an energy banker asked. This Could Have Favored the Long Side of the Market 
In normal circumstances, consumers such as utilities could almost have stayed out of the November bid week cash market, backed as they were by huge storage and warm weather. Instead they must have bought heavily, perhaps fearing that with Enron sick there wouldn't be enough counterparty weight to take the other side and supply them later if they stayed short. The fear could have been that over the counter swaps to hedge later spot purchases might just not be available on Enron Online the way they usually are. Other traders might not have been able to take up the slack, since they trade often with Enron. Commercial players might have perceived them as being infected with some of the same weakness. 
After the Dynegy deal was announced, however, prices could have been freed to fall back to where they were at the end of September, with users now unafraid to play the short side because Enron was back in business with a better credit rating. By Nov. 14, with cash prices more than $1 below where they were during bid week, Enron spokesman Eric Thode said, "Volumes on Enron Online have returned to the normal range. The 30-day moving average has improved to a more normal 5,700 transactions per day with a notional value of $1.7 billion." Even allowing for some exaggeration by Enron's PR man to instill market confidence, that points to a correlation of falling prices and a revived Enron. They Don't Speak German at Enron, Do They? 
If so, what happened to gas prices last month could have been the mirror image of the Metallgesellschaft AG- induced crisis on the oil futures market in early 1994. That crisis pushed oil prices down instead of shoving gas prices up. This German firm, a trader and user of oil, had used a very aggressive strategy to obtain its supplies of oil. In order to lock in a price for the coming year, the Germans "stacked" all their contracts covering their oil needs for the coming year as long positions on the near month. They would go to delivery on just the portion they needed for the next four weeks, then would "roll" the rest of the contracts onto the next futures month. They did that by selling the remainder of the expiring month's contracts and using the money to buy the same number of the next month's contracts. But to be sure of being able to do that without losing their lederhosen, the Germans had to be sure that the next month's contracts would be cheaper than the prompt month ones they had just sold. Well, due to last minute purchases by consumers going to delivery, the prompt month usually is higher than the next one. So the Germans thought they had a strategy that would guarantee them a profit every month when they flipped their futures stack, a nice kicker on top of having locked in the underlying cost of the oil they would use for the year. Yeah, right. Well, one month that didn't happen, mostly because other traders got wind of what the Germans were doing and decided to hold their feet to the fire by bidding up the next month (which is a variant of what happened to Long Term Capital Management four years later.) So, losing another Battle of the Bulge, this time to Nymex traders instead of to General Patton, Metallgesellschaft cratered. As a trustee unwound the train wreck of long futures, he went on a selling spree that kept the Nymex price low for months. 

NGL PRICE BOXSCORE
Data from Altrade(tm) NGL Indexes
MTD Averages in Italics
Mont Belvieu TX
Eth Pro Norm Iso Pen+ NGL Bbl 
Nov 8 - 14, '01 22.53 35.45 41.44 39.36 45.34 $13.99 
Nov 1 - 7, '01 23.85 35.91 41.24 40.38 45.5 $14.28 
Oct 25 - 31, '01 24.63 39.22 43.74 43.15 ### $15.30 
Oct 18 - 24, '01 23.95 39.27 43.96 43.34 47.84 $15.07 
Oct '01 24.05 39.44 45.06 44.44 50 $15.34 
Sept '01 25.62 42.4 52.65 51.8 59.68 $17.19 
3rd Qtr '01 26.55 41.12 49.94 49.7 56.31 $16.75 
2nd Qtr '01 36.27 49.57 55.22 64.89 64.68 $20.50 
3rd Qtr '00 39 59.39 66.99 66.35 75.29 $23.47 
Nov 9 - 15, '00 43.46 61.35 73.24 72.02 82.94 $25.39 
Conway KS: Group 140
Nov 8 - 14, '01 21.08 37.67 37.13 41.5 44.16 $13.78 
Nov 1 - 7, '01 22.57 40.69 38.5 43.68 43.78 $14.48 
Oct 25 - 31, '01 22.21 44.22 39.86 48.5 49.21 $15.41 
Oct 18 - 24, '01 21.72 44.74 40.84 47.17 50.44 $15.50 
Oct '01 21.7 44.21 39.63 46.37 54.04 $15.59 
Sept '01 21.83 46.97 44.93 51.87 78.11 $18.00 
3rd Qtr '01 23.86 45.33 44.72 52.77 74.4 $17.88 
2nd Qtr '01 32.27 54.15 53.99 76.12 76.01 $21.44 
3rd Qtr '00 37.11 63.91 65.8 67.48 78.9 $23.93 
Nov 9 - 15, '00 42.26 62.63 73.27 74.8 83 $25.43 
Individual product prices in cents per gallon. NGL Barrel: dollars per 
42 
gallons.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

U.S.'s Dingell Seeks Probe of Arthur Andersen, Dow Jones Says
2001-11-19 15:24 (New York)


     Washington, Nov. 19 (Bloomberg) -- U.S. Representative John
Dingell, a Michigan Democrat, has requested a special
investigation of Arthur Andersen LLP's audits of Enron Corp. and
Waste Management Inc., Dow Jones Newswires reported.

     Dingell sent a letter to Public Oversight Board Chairman
Charles Bowsher asking for the review, the newswire said.

      Andersen, the world's fifth largest accounting firm, served
as Enron's outside auditor for more than a decade, assuring
investors the company's financial statements conformed with
generally accepted accounting principles. Earlier this month, the
company reported that it overstated earnings by $586 million over
four-and-a-half years, inflated shareholder equity by $1.2 billion
because of an ``accounting error,'' and failed to consolidate
results of three affiliated partnerships into its balance sheet.

     In June, Andersen reached a $7 million settlement with the
Securities and Exchange Commission in which it neither admitted
nor denied allegations of fraud related to its audit of Waste
Management, Inc. Andersen is now undergoing a peer review by
Deloitte & Touche, Dow Jones said.

Enron's Azurix May Have to Sell Assets If It Can't Borrow
2001-11-19 14:35 (New York)

Enron's Azurix May Have to Sell Assets If It Can't Borrow

     Houston, Nov. 19 (Bloomberg) -- Azurix Corp., Enron Corp.'s
water unit, may have to sell assets if it can't find financing to
continue operations, the company said in a regulatory filing.

     Enron took Azurix public in June 1999 and then, after the
water company's stock plunged, took it private and paid off
investors in March.

     Azurix isn't sure it will be able to renew or refinance about
$113.3 million in long-term debt, including bank loans, that
matures before Sept. 30 at a ``reasonable'' cost, it said in a
filing with the U.S. Securities and Exchange Commission. The
company also had $326.3 million in short-term debt as of Sept. 30.

     The loans are Azurix's ``primary sources of liquidity,'' the
filing said. If the company can't raise the funds, it might have
to use the proceeds from planned asset sales to refinance debt and
get cash, the filing said.

     If those asset sales don't generate enough money, ``Azurix
may need to sell other assets, which could result in Azurix
incurring losses in future periods,'' the company said.

     Azurix, though it still must file with the SEC, no longer
trades as a separate stock. The shares of Houston-based Enron fell
8 cents to $8.92 in early afternoon trading.

     Enron agreed earlier this month to be acquired by rival
Dynegy Inc. in a transaction currently valued at $24.9 billion.
The buyout came after Enron's shares plunged amid an SEC
investigation of the company's dealings with affiliated
partnerships.