RE: Investments Meeting Agenda

Does ECR realize the negatives coming in MEGS.

-----Original Message-----
From: Kitchen, Louise
Sent: Thursday, June 21, 2001 4:55 PM
To: Garland, Kevin
Cc: Lavorato, John; Colwell, Wes; Miller, Michael L.
Subject: Re: Investments Meeting Agenda

I had a meeting this morning with Dick to go through the assets following a discussions with the Enron Americas team. Enron Americas will be keeping the following assets:

Bridgeline - Mrha
LRC (Enron I Cavern - to Bridgeline) - Mrha
MEGS - this asset has been transferred to ECR within Enron Americas
Onondaga - to be retained by Ben Jacoby

This solves one of the issues below.

Louise

From: Kevin Garland/ENRON@enronXgate on 06/21/2001 03:54 PM
To: John J Lavorato/ENRON@enronXgate, Wes Colwell/ENRON@enronXgate, Michael L Miller/ENRON@enronXgate
cc: Louise Kitchen/HOU/ECT@ECT

Subject: Investments Meeting Agenda

John, Wes and Michael,

The purpose of tomorrow's meeting is to discuss a few of the investments that we are planning on transferring to the new investment group. The specific issues are as follows:

? Encorp - the value of this investment was written up from $3 million to $9.85 million in Q4 2000 without justification. It should be written back down at the end of this quarter. Otherwise, we are going to have a bigger problem later.
? Dais Analytic - same issue as above. Investment was written up from $8 million to $20 million. It should be written back down this quarter.
? AMPS - This is a problem. This company is going to continue to need capital (an additional $7 million immediately) well beyond what Enron should be funding. I am not willing to provide this company with ongoing funding without significant further evaluation. If it is that important to the strategic effort of ENA, then I recommend that ENA continue to manage the company and provide financing.
? Bridgeline - After further evaluation, it is clear that this is not a merchant investment and should not be moved to my group. I spoke with Jeff Donahue, and we both agree that if you want it sold, then his team should be the right one to do it.
? Copel - This one is fuzzy, but Jeff Donahue and I have agreed that one of us should take responsibility for exiting this investment. We still need to figure this one out.

KG