Conference Call

For the most part, the committee call was uneventful. The commandeering ac=
tion is proceeding. The State has asked us to stipulate to lift the stay o=
n the chance that it will want to assert counterclaims. We aren't sure wha=
t counterclaims it would have against the PX, so we are asking for details =
to evaluate the State's request. The arbitration demand will be discussed =
in a special call next Wednesday at 3 pacific. Weg acknowledged that peopl=
e are still thinking through the implications of the arbitration. His conc=
ern is applying some pressure while the legislature is in session and consi=
dering the Edison bailout issue. Some committee members evidently are conc=
erned about the bearing of an arbitration on a possible involuntary petitio=
n. I suppose we can take this up in our call next Tuesday. On Sept. 5 the=
court will consider Edison's objection to employment of Kaye, Scholer and =
BDO Seidman. A response will be filed today. PGE evidently is filing a de=
claration in support of our committee. Interesting. A 2004 exam of Edison=
is now scheduled on Sept. 25. We expect that Edison will be moving for so=
me kind of protective order. Weg wants to form an Edison subcommittee and =
would like Enron to be on it. Your thoughts? The biggest issue of the day=
related to structuring a plan. With the prospect that the PX will run out=
of money soon, we need to define responsibilies, create a budget and find =
a funding source ASAP. Weg suggests the earnings on the $400 million (abou=
t $6 million to date) to get us through the chapter 11 case. Then we'll ha=
ve to find a source for post-confirmation activities like pursuing commande=
ering litigation, maintaining records, running numbers and making distribtu=
ions. Cohen made a speech about the need to nail this down soon because hi=
s firm is actively involved in litigation matters that cost a lot to mainta=
in. Let's talk about this issue next week. We obviously need work to cont=
inue and that costs money. Finally, the Weg settlement is being reviewed, =
among others, by PGE. Their initial reaction was quite positive. Howard h=
opes to have comments so he can present it to FERC by Sept. 15 as what he s=
tyles an "offer of settlement". Bob

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