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Dennis & Michael: It looks like this is an EnronCredit.com matter.
Could you please take care of this and coordinate with David Weekes or, in his absence, Gillian Johnson (in Houston).
Thanks for your help!
Mark
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Confidentiality Agreement
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Thanks for dealing with Tana on these issues.
It is not entirely clear to me what you want the policy to be regarding which counterparties have access to Australian power products.
You probably already know that the EnronOnline people want every counterparty everywhere in the world to have access to every product unless Credit or Legal can justify restricting their access.
Credit already performs a financial test on each counterparty to determine if they meet the CFTC Eligible Swap Participant requirements.
Unfortunately, that test is not as restrictive as the Australian tangible assets test.
It sounds like there should be a US$6 million tangible assets test applied by Credit before we give any counterparty access to Australian Power (this would be a total pain but certainly possible).
On the other hand, if you feel comfortable giving access to non-Australian counterparties without that test being performed, we can do that, too.
Pleas let me know if we should ask Credit to start performing this test on all counterparties or if it should be limited to Australian entities.
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EnronOnline access to Australian Power products
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(h) Jurisdiction.
Section 13(b) is hereby deleted in its entirety and=20 replaced with the following: (b) Jurisdiction.
With respect to any suit, action, claim or proceeding=20 relating to this Agreement (=01&Proceedings=018), neither party (i) waives = any=20 objection which it may have at any time to the laying of venue of any=20 Proceedings brought in any court, (ii) waives any claim that such Proceedin= gs=20 have been brought in an inconvenient forum, or (iii) waives the right to=20 object, with respect to such Proceedings, that a court does not have any=20 jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings = in=20 any jurisdiction, nor will the bringing of Proceedings in any one or more= =20 jurisdictions preclude the bringing of Proceedings in any other jurisdictio= n.=20 and just in case you need it: (b) Agreement To Arbitrate: Any claim, counterclaim, demand, cause of=20 action, dispute, and controversy arising out of or relating to this Agreeme= nt=20 or the relationship established by this Agreement, any provision hereof, th= e=20 alleged breach thereof, or in any way relating to the subject matter of thi= s=20 Agreement, involving the parties and/or their respective representatives=20 (collectively the =01&Claims=018), even though some or all of such Claims a= llegedly=20 are extra-contractual in nature, whether such Claims sound in contract, tor= t,=20 or otherwise, at law or in equity, under state or federal law, whether=20 provided by statute or the common law, for damages or any other relief, sha= ll=20 be resolved by binding arbitration.
Conduct Of The Arbitration, And Authority Of The Arbitrators: Arbitration= =20 shall be governed by the Federal Arbitration Act and conducted in accordanc= e=20 with the Commercial Arbitration Rules of the American Arbitration=20 Association.
The validity, construction, and interpretation of this=20 agreement to arbitrate, and all procedural aspects of the arbitration=20 conducted pursuant hereto shall be decided by the arbitrators.
In deciding= =20 the substance of the parties=01, Claims, the arbitrators shall refer to the= =20 Governing Law.
It is agreed that the arbitrators shall have no authority t= o=20 award treble, exemplary or punitive damages of any type under any=20 circumstances whether or not such damages may be available under state or= =20 federal law, or under the Federal Arbitration Act, or under the Commercial= =20 Arbitration Rules of the American Arbitration Association, the parties here= by=20 waiving their right, if any, to recover any such damages.
Forum For The Arbitration And Selection Of Arbitrators: The arbitration=20 proceeding shall be conducted in [New York, New York][Houston, Texas].
=20 Within thirty days of the notice of initiation of the arbitration procedure= ,=20 each party shall select one arbitrator.
The two arbitrators shall select a= =20 third arbitrator.
The third arbitrator shall be a person who has over eigh= t=20 years professional experience in over-the-counter derivative products and w= ho=20 has not previously been employed by either party and does not have a direct= =20 or indirect interest in either party or the subject matter of the=20 arbitration.
While the third arbitrator shall be neutral, the two=20 party-appointed arbitrators are not required to be neutral, and it shall no= t=20 be grounds for removal of either of the two party-appointed arbitrators or= =20 for vacating the arbitrators=01, award that either of such arbitrators has = past=20 or present minimal relationships with the party that appointed such=20 arbitrator.
Confidentiality: To the fullest extent permitted by law, any arbitration= =20 proceeding and the arbitrators award shall be maintained in confidence by t= he=20 parties.
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jurisdiction
|
I haven't seen any of the press reports (even though I am in London and I hear that's where they were) but I thought this was a well drafted response.
The only additional rumours I have heard indicate that the police may have been rough in their handling of demonstrators outside the fence at the plant construction site.
I remember hearing that there were times that the construction workers feared for their lives because of the vehemence of the protesters.
I guess that didn't make it into the Human Rights Watch (ever heard of them?)
report.
Mark
|
Human Rights Watch
|
We should probably start thinking about an agenda for this meeting if only so that we can determine appropriate attendees and get it on their calendars.
Do you have anything in particular in mind?
Were you thinking legal/regulatory/operations/business/marketing?
Hope you're having a fun weekend!
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October 2nd London Meeting
|
Hey guys - welcome home!
At least I assume you're home by now.
How was the trip?
I heard a bit about the departure but with any luck it must have gotten better.
Any hope you took digital pictures?
I have already told Linda but I wanted you both to know how great I thought your wedding was.
There is no doubt in my mind that it was the most special, beautiful, fun wedding I've ever been to.
Magical doesn't seem like too strong a word.
Thank you very much for letting me be part of it.
It's been about 30 years since I had been to that part of the world - it's easy to see why you enjoy it so much.
I was serious about sailing in the Caribbean at Thanksgiving.
If you are
|
Welcome home!
|
Dear John: So sorry for the delay.
I hope it hasn't caused too much inconvenience.
I would have called to apologize in person but believe it or not I don't have your phone number!
Here are my comments to the draft documents you sent: Part 1 (b) In our other derivatives trading, the cross default test applies to Enron Corp. with a Threshold of US$100,000,000.
To accomplish this in the schedule, Threshold Amount for the Enron party would apply to our Credit Support Provider if there is going to be an Enron Corp. guaranty and the dollar figure adjusted accordingly.
Part 1 (d) Has Baker & McKenzie recommended this?
We rely on local counsel advice for this provision but our preference is that the termination in a bankruptcy context not be automatic unless it needs to be.
The risk in the automatic situation is that the market moves significantly before we are even aware of the situation, i.e.
the outstanding transactions terminate automatically, leaving us with an open, unhedged position which we are not able to protect since we are not aware of it.
In the U.S. the bankruptcy code allows us to terminate after the filing of a bankruptcy according to the terms of the agreement so we know exactly the time to rehedge.
Part 1 (e) We usually choose Loss here as the method which gives the non-defaulting party the most flexibility.
Market Quotation is often suggested because of its apparent objective nature.
However, in many of the markets where we operate, quotations will not be available, where they are available they may well not be meaningful, and the Loss method gives flexibility (while still requiring commercial reasonableness).
Part 1 (h)(ix) This Additional Event of Default only applies when there is no collateral annex.
When we have the ability to ask for (or be asked for) collateral in the case of a downgrading, we build that event into the Paragraph 13 to trigger a reduction of the threshold to zero which requires the posting of collateral to cover any open position.
If the party fails, it then becomes a default allowing termination.
Part 1 (h)(x) Wouldn't the cross default be triggered before this could happen?
Part 2 Have our internal Tax people approved this?
Part 3 I am not familiar with the Representative Director concept or some of the corporate documents referred to.
Since Enron Corp. will be a Credit Support Provider, does it have a Representative Director, etc.?
The legal opinion requirement is one that we can waive if local counsel does not think it necessary.
In many non-US jurisdictions, local counsel have advised that an opinion be obtained - in some cases derivatives transactions are so uncommon that they might be outside the ordinary course of business and therefore require special board approval; in others, derivatives would not be permissible activities for a company unless express provision is made in the corporate documents, etc.
Part 5 (b) (g)&(h) These representations originate with CFTC rules in mind (although they may be helpful for other reasons as well).
If neither party is in the US, the CFTC reason may go away.
On the other hand, since we are
|
Japanese ISDA Documents
|
I saw this article on the internet and just in case someone cancels and you= =20 need any last minute ideas... PLANNING CREATIVE LAW FIRM RETREATS By Daniel J. DiLucchio and Shannon Prown Over the years, retreats have been used for a number of purposes, including= =20 business planning, strategy development, consensus building and positioning= =20 reassessment.
While the primary function of retreats formerly was strategic= =20 planning, law firms have discovered a variety of other reasons to hold them= .=20 General education, entertainment, continuing legal education, management=20 education, personal and professional skills development and other areas of= =20 interest to the members of a firm are some of the retreat topics in favor o= f=20 late.
Careful planning and the articulation of clear objectives are the keys to= =20 conducting successful law firm retreats or off-site meetings.
Yet, for thos= e=20 responsible for planning the retreat agenda, constantly developing new idea= s=20 is a challenge.
The following table of topics is provided to assist retreat= =20 planners in designing creative, challenging and productive programs.
The=20 general content or concept intended, the general format of the session and= =20 potential sources to present the program are also included.
This list is no= t=20 intended to be an exhaustive account of every possible topic.
The purpose i= s=20 to generate some new topic ideas.
The following chart depicts some of our latest thoughts on retreat planning= .
RETREAT TOPICS Topic Content/Concept Format Source Marketing Role Playing=20 Lawyers "role-play" client presentations, judged by clients or peers Interactive=20 Internal Resources or Clients Client Presentations Clients are invited to speak about their business environment and upcoming= =20 legal needs Lecture Clients Client Survey Results Presentation of client survey results, possibly followed by development of= =20 initial marketing strategies Lecture/ Interactive Firm Marketing Director or Consultant Public Relations "How to handle the press."
Lecture Public Relations Firm or Consultant Corporate Counsel Views/Partnering What do corporate counsel really want from their law firm?
Lecture Consultant or In- House Lawyer of Client Cross-selling Services: Principles, Tools & Tactics How to capitalize on cross- selling opportunities with the firm's client ba= se Lecture/ Interactive Consultant Entertainment Comedian "Professional" humor Lecture/ Interactive Speakers Bureau Cartoonist Caricatures of lawyers enacting their favorite activity/fantasy One on One=20 Artist/ Cartoonist Sports/Entertainment Figure Popular sports or entertainment figure speaks about their experiences or a= =20 "cause" Lecture Speakers Bureau Motivational Speaker Self-help speaker may speak on a variety of topics Lecture/ Interactive Speakers Bureau Legal Education Emerging Legal Issues Invite a law professor to discuss emerging legal issues Lecture Local University, Law Professor, Speakers Bureau or ABA Politics/ Government Invite a local politician or government official to discuss new or upcoming= =20 legislation Lecture Politician, Government Official State of Judicial System, Judicial Reform Invite a judge or court official to discuss the state of the judicial syste= m Lecture State or Local Courts, ABA Management Education Alternate Billing Discuss alternate billing methods, the pros, cons and keys to successful=20 implementation Lecture/ Interactive Consultant Trends Learn about trends in the legal profession, including financial, management= =20 and business trends Lecture Consultant or Accountant TQM What are the principles of TQM?
How do they apply to the legal profession?= =20 How do you initiate TQM in your organization?
Lecture/ Interactive/Break-out Groups Consultant or Lawyer whose firm has implemented TQM Financial Planning Discuss financial strategies and profitability analysis Lecture/Breakout Groups Financial Planner, Accountant or Consultant Employment Issues Discuss changing employment laws and practices, e.g., ADA, discrimination,= =20 sensitivity training, etc.
Lecture Labor/ Employment Lawyer, Consultant, Director of Human Resources, Law Professor International Opportunities Discuss current trends and opportunities in international expansion, joint= =20 ventures and affiliations Lecture Consultant, Professor Social Interaction Myers-Briggs Myers-Briggs or other "personality" tests can be used to heighten awareness= =20 and understanding about co- workers Interactive Consultant or Psychologist Outward Bound Outdoors experience designed to encourage teamwork and enhance perspective Total Participation Outward Bound Habitat for Humanity (or other hands-on community improvement program) Participate in building (hands- on) low income housing Total Participation Habitat for Humanity, Local Church or Civic Organization Individual Interest Asset Accumulation Income Management Make an investment counsellor available to meet with individuals to discuss= =20 how to best manage their personal income One on One Investment Firm or Individual Investment Counsellor Image/Etiquette Discuss proper dress, evaluate/critique an ensemble, etc.
Interactive Consultant Retirement Planning Make a retirement planner available to meet with individuals to discuss how= =20 to plan for their retirement One on One Consultant, Investment Firm or Accounting Firm=20 Training Delegation Learn how to develop younger lawyers, paralegals and staff through=20 appropriate delegation Lecture/ Interactive Consultant Stress Management Symptoms of stress and how to eliminate/ overcome them Lecture/ Interactive Consultant Rainmaking Demonstrate how to develop personal selling skills Lecture/ Interactive Consultant Teambuilding Roadblocks to teamwork and how to overcome them to build effective teams Lecture/ Interactive Consultant Time Management Basic organizational and time management skills needed to be productive in = a=20 busy law firm environment Lecture/ Interactive Consultant Conducting Performance Reviews How to use lawyer or staff evaluations as a strategy for mutual success Lecture/ Interactive Consultant Supervisory Skills Basic supervisory skills and how to get the desired results from those we= =20 supervise Lecture/ Interactive Consultant Technology Training Training can be developed for research, document management or other=20 technology tools Interactive Software Representative, Computer Support Group or Technology Consultant DiLucchio, Daniel J. and Shannon Prown.
=01&Planning Law Firm Retreats.=018= Report=20 to Legal Management.
Altman Weil Publications, April 1994.
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Probably too late for this but....
|
Approved re: monitor.
What is our policy on printers for lawyers?
I know a number of people (including me) have them but I don't know how that happens.
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"Thin" Computer Flat Screen
|
It's not looking good for getting back to you today on this - shaping up to be a very bad day and we need to coordinate with Credit for their responses as well.
I have a call in to John Suttle and have forwarded the revised draft to him.
We'll do what we can.
I saw your reply to my previous note.
On this one point: It strikes me as disingenuous to say that they don't have the internal systems for csa's with nonfinancial counterparties - the same systems would work for nonfinancial parties as well as financial parties.
IBJ is the most sophisticated Japanese player in the derivative market and one would believe that they could handle the documentation for both financial and non-financial entities.
I note, I have heard that it is not market practice for Japanese financial institutions to provide collateral to non-financial institutions, so it may be very difficult for them to alter their position.
I understand.
My view is just that it is probably not a systems issue but a position and it irks me to have the point made as a systems issue when it is not.
As we both agree, the issue may be moot depending on what Credit thinks.
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IBJ
|
I've chartered in the BVI a number of times and it is a great place to take beginners.
I only caught your post of yesterday so didn't see the earlier thread.
I'm assuming you're picking up the boat in Road Town or nearby.
The only problem with getting away from the dock by 12 or so is if the boat isn't quite ready.
I've always used the Moorings so they're the only outfit I know.
They don't usually let you get started on the boat until after the chart briefing which means you don't go aboard until 10.
If you use their provisioning service it eases that chore but sometimes the food isn't there right on time.
Having several people (but not too many) around this time is helpful to put food away, take inventory, attend boat briefing, etc.
Of course, if you get the boat the day before - maybe with a sleepaboard option or some such, you have that much more certainty that everything will be done on time.
Check with your charter company about attending the briefings before sending the last person off to the airport - some companies may require 2 people from your boat to attend.
As for first day - if you are away by 1 I suggest heading over to the Bight on Norman Island.
There are lots of moorings there and you'll get one as long as you're not in too late.
It shouldn't take more than a few hours to get there and if it looks like it might be close you can always fire up the engine.
There are a couple of places (a beach bar and a boat) to eat and drink there if you don't feel like cooking the first night and although you can't call it deserted or even secluded because of the number of boats there, there is at least very little ashore to bother you.
The caves are just around the corner and the Indians right outside for great snorkeling/diving either that afternoon or first thing the next day.
Whether you go clockwise or counterclockwise doesn't really matter.
My advice running roughly clockwise: skip Soppers Hole - just a commercial port with little of interest (unless you're clearing customs); skip the USVI - all the clearing out & in & out & in can take a lot of time and there's plenty to do in the BVI - if you just have to go, the northern shore of St. John is the best - nice anchorages (several of the 'secluded' variety) without the crime on St. Thomas and the resort at Caneel Bay will let you come ashore for a fancy dinner (but make reservations and leave your trash on board - there's nowhere to put it); Jost van Dyke is fun - anchor in Great Harbor or pick up a mooring in Little Harbor - Sydney's Peace & Love restaurant in Little Harbor still has an honor bar where you mix your own drinks & just keep track in his little black book while you're waiting for dinner, Foxie's in Great Harbor is a classic beach bar/rest.
- lots of fun and good food & drinks; Sandy Cay is everyone's image of a desert island and perfect for a lunch stop and a swim; don't miss Cane Garden Bay (unless the northerly swell is too heavy) there's a wonderful swath of pure white beach with palm trees swaying overhead and steel drum bands serenade you into the evening - watch the reefs but the channel in is well marked; if there's a full moon be sure to be on Tortola somewhere that night (Cane Garden works fine) to get to Bomba's Shack for the party - there are lots of taxis there as the evening progresses to get you back; it's easy to pick people up (or drop them off) at the airport (close to the water with a dinghy dock) midweek if you need to and kind of fun to be met that way; the Baths are a must but VERY crowded (no anchoring allowed - must use a mooring) so I'd try to get there as early in the day as possible (Cooper Island, Marina Cay and area by Last Resort are nearby for the night before) - maybe get up early, motor or sail over and have breakfast once you're safely moored - and be careful to use the right color mooring and avoid the ones reserved for commercial craft; I usually skip Spanish Town (Virgin Gorda Yacht Harbor) since I'd rather be at anchor than stuck in a marina slip with no breeze, but if you stay there you can get a taxi to the Baths and top off with water in case your crew is not serious enough about fresh water conservation (and what crew ever is?
); the Bitter End is great for a long hot shower (I think you pay at the resort front desk) and maybe a 'fancy' dinner and there is also a water dock there (10 cents a gal.?).
Sometimes it seems like the distances are so short you don't get to sail enough - you shouldn't have any trouble getting a lot in (but you won't be able to see everything).
The only difficulty might be if you need to get the boat back in for an early flight but I've let people out at Cane Garden Bay to take a taxi to the early flight & then sailed around to have the boat back well before noon.
Having said that, I suggest Cooper Island or the Bight for your last night - it just makes that last morning a bit more leisurely.
And just as I mentioned for the first night, it makes sense to get into most anchorages early rather than late so you're sure to get a mooring (in those that have them) and don't have to worry about finding a spot for the boat - many of them can get quite crowded.
Of course, if you're going anytime between now and Thanksgiving there shouldn't be any trouble with crowds - just pay daily, close attention to the weather forecasts!
Don't expect much in the way of night life but there are places to eat at nearly every anchorage - many are closed in the low season.
A few of the islands have some good hiking but there's not much for the sight seers either.
But snorkeling and diving are everywhere.
Ask at your chart briefing for the best spots these days.
If you have divers along, don't miss the wreck of the Rhone - you can have a dive boat come and meet you there and bring along equipment and a guide for the divers.
The cruising guide will have lots of info on all these issues.
Wish I was going - it's always a blast!
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BVI
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I sent Amanda & Bill an e-mail a couple of weeks ago and here is Bill's reply.
I sent him a fairly detailed note on how we usually schedule things and which were the best times of year, etc.
I haven't heard anything from Amanda and was beginning to assume they were not really interested in a November trip.
Have you heard anything firm from Virginia?
Bill's next-to-last paragraph tells me that he's getting to know Amanda - but I don't think she'll leave him alone for the holiday.
The real question is whether her uncanny ability will extend to his schedule, too.
If they still want to go we'd better make travel plans soon - that Thanksgiving Sunday is notoriously difficult to get seats.
If you'd rather wait until Jan. or Feb. that's fine with me too.
Just let me know.
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Sailing
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I've been to Argentina - what can I tell you about it?
We need to get sailing soon!
Ever get to Houston?
I have a boat here but don't sail too much - just working too hard.
Hope you're well!
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Hey Greg
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I have read about the Super Maramu 2000 and note from your website that you have a location on the Mediterranean in France.
I will be in Southern France September 23 through 25.
Would it be possible to visit you in Hyeres during that time?
Is an appointment necessary?
Mark Taylor 1322 Rutland Street Houston, Texas 77008 (713)863-7190 (home) (713)853-7459 (work) (713)646-3490 (fax)
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Visit in Hyeres
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Your new offices will be ready in a week or so.
We anticipate your moves will take place over the weekend of September 29.
Joy Davis will coordinate your moves and can help with obtaining boxes, etc.
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Office Moves
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Marc - Bummer - this is the last message I'm sending and then I'm out the door for the airport.
We're on our way to France - not back until 10/4.
Mark
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rsvp
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Kathy: Please issue a guest user id to Bob Lawrence at Milbank Tweed Hadley & McCloy.
Bob is a lawyer helping us with various EnronOnline matters including Broker Connect.
His e-mail address is rlawrence@milbank.com.
Thanks,
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guest id
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It looks to me like another case of an obvious error (i.e.
the counterparty should have known it was a mistake).
I'm afraid we've just been lucky that the numbers have been so far off - some day we're going to have one that is too close to call obvious.
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Correction to PG&E Spread Trade
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Please use the PEP system on your computer to suggest reviewers by the end of the day tomorrow at the latest.
It is important that your reviewers have enough time to fill out the reviews and the system closes for that purpose at the end of next week.
If you have any questions or are having trouble accessing the system, please let me know.
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Year End Performance Reviews
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Hello from Texas.
It's probably been about six years since we last spoke but I thought I'd drop you a line to see how you were doing.
I saw Pete Datos for brunch when I was in town a couple of years ago and he seemed to be fine but I have been very bad about staying in touch with people.
Ted Bockius & I are still together - he works at an internet start-up company doing their public relations work.
I'm still a corporate lawyer at Enron working on financial contracts and e-commerce stuff.
I get to nyc 3 or 4 times a year so we should get together for a drink or a meal some time and catch up.
Hope you are well.
Mark
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Voice from the past.....
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I decided I needed the book we discussed so I went online to Amazon.com and ordered it!
While there I found references to a number of books I tought you might be interested in: the Hornblower series by C.S.
Forester the Bolitho stories from Alexander Kent the Drinkwater series from Richard Woodman (e.g., "An Eye of the Fleet") the Ramage series from Dudley Pope Revolution at Sea Trilogy/James L. Nelson Lobscouse & Spotted Dog : Which It's a Gastronomic Companion to the Aubrey/Maturin Novels by Anne Chotzinoff Grossman, Lisa Grossman Thomas
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Maritime Novels
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Peter: Here is our first attempt at EnronOnline Long Description language for the double transaction calendar spread product.
We had to guess at several aspects.
Please let me know if we got close.
Mark
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Double Transaction Calendar Spread Swap
|
Thanks so much for the Christmas present.
Everyone is enjoying it very much.
Bob Bruce's first reaction was "Wow -- I hope this isn't in lieu of
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Merry Christmas!
|
Thanks for your notes.
Just so you know, I have the Polo Sport perfume and a Victoria's Secret gift certificate for Emily.
Were there lists for you and Dad?
I can't seem to find them.
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Christmas Lists
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In case you haven't already looked at the Fee Agreement draft, here is a slightly revised version.
Also attached is a revised BETA.
The changes marked in the BETA are a combination of the commercial guy's comments and my revisions of those comments (hopefully marked separately).
Unfortunately I didn't get the changes in the Fee Agreement marked.
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Broker Connect Agreements
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Here is your conversation with my revisions marked (deletions struck through, insertions in bold).
Hope this helps but feel free to call or write with any questions or comments: A: The CFTC regulates futures contracts and certain kinds of option contracts.
SP: What's a futures contract?
A: It is a contract for the sale of a certain kind of commodity through a regulated exchange.
SP: How is the contract different than a non-futures contract?
A: Ahem, just for your information, we call the non-futures contracts forward or over the counter contracts.
The big difference is that the forward contract does not must go to delivery while futures contracts do not.
SP: I though the futures contracts went to delivery.
I remember getting all messed up on the gas side with delivery of NYMEX futures gas at the Henry Hub, and what about those stories of a guys getting a load of soy beans dumped in their front yards?
A: Well, er, yes they do sometimes go to delivery, but they are not really supposed to relatively few of them go to delivery.
They are supposed to more frequently (actually the vast majority of the time) net out as financial transactions.
It's that option of settling financially that distinguishes the futures contract.
SP: Well lets get to the point, why are physical buy sells so bad?
A: That's easy.
Because they look like futures contracts.
They are not intended to go to delivery.
And if you are trading in futures contracts you are supposed to be doing it on a CFTC regulated exchange.
SP: So what you are saying is that if we deliberately net out our physical deals and never intend to even try to schedule delivery under them we are trading in futures contracts and could be subject to regulation by the CFTC?
A: You've got it.
But it's even worse than that - federal law says that a futures contract which is not traded on a regulated exchange is illegal: not only could the CFTC come after you but your counterparties could use that law against you to get out of performing.
So you can think of each contract like that as having written a free option.
SP: Well how much physicality do we have to have to make it a forward contract?
A: What do you mean?
SP: Well, if we settled physically one day a month but financially the other 29 days, would we have a futures contract?
A: Oh for Christ's sake I've had it.
I'm telling you once and for all that physical buy sells are futures contracts and you can't do them now get the hell out of my office!--
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Forwards vs. Futures
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Marc, Here's a draft reply to your latest e-mail, which I would send to all those copied on your note to me.
What do you think?
Marc, We have sought, and paid for, advice from Indian counsel concerning commodity derivative transactions with Indian counterparites.
We have had that advice updated and confirmed in connection with this proposed transaction.
The result of that advice is that we will require an opinion from DPC's outside counsel that the proposed transaction is enforceable against DPC before the transaction can proceed.
While I have no legal objection to sending a form of L/C that would be acceptable to us, it doesn't make much sense to go through the exercise if DPC will not be providing the necessary opinions.
Mark
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Reply to e-mail
|
In light of the rising frequency of human-grizzly bear conflicts, the Montana Department of Fish and Game is advising hikers, hunters, and fishermen to take extra precautions and keep alert of bears while in the field.
We advise that outdoorsmen wear noisy little bells on their clothing, so as not to startle bears that aren't expecting them.
We also advise outdoorsmen to carry pepper spray with them in case of an encounter with a bear.
It is also a good idea to watch out for fresh signs of bear activity.
Outdoorsmen should recognize the difference between black bear and grizzly bear dung.
Black bear dung is smaller and contains lots of berries and squirrel fur.
Grizzly bear dung has little bells in it and smells like pepper.
You guys around this weekend?
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Bear Alert
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Dan - I left you a voice mail about this contract.
Can you let me know who the best person would be to review one of these for Brent?
Thanks,
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translation
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Marc, The game starts at 7:30.
Why don't we stop by to pick you up at a little before 7:00.
Let me know if this presents any problems.
Mark
|
Rockets
|
Carolina, I have finally received my tickets.
I will arrive at Ezeiza on United Airlines flight #761 on Sunday, March 14 at 11:15 a.m. Can you arrange to have a driver meet me at the airport?
I will be staying at the Sheraton.
Thank you very much for your help.
Mark
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Arrival in Buenos Aires
|
P.S.
- If you do get in touch with Kartini, please send her my regards.
I'm pretty sure she still likes me in spite of the way Skadden's relationship with her ended.
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Kartini
|
Could you guys please get in touch with Andrea Bertone in Sao Paolo & send her copies of our forms that might be useful in coming up with appropriate documentation for this transaction.
Sara - you should probably discuss with her the regulatory situation and make sure we can actually do this.
Brent may have some information as well.
Thanks,
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Brazilian Power Trading Contratcts
|
Scott: I have a call scheduled with Martin for tomorrow morning to discuss these CFTC issues.
I'll let you know how it goes.
I have also not forgotten your request for my view on Martin's tenure in Houston.
I have mixed feelings that are difficult to put down in writing and I'm hoping we can take a few minutes in New Orleans to discuss.
Mark
|
CFTC issues in Norway
|
Hey Jeff: I just saw your email address on the Monmouth web site.
I didn't realized you were at Mayer Brown.
I don't even know if we've talked since I left New York (almost 5 years ago).
I'm now in the legal department at Enron Capital & Trade Resources in Houston where my group is responsible for the legal issues in derivatives trading here.
I don't get to Chicago often but if they ever send you down this way, be sure to look me up!
C., F. & S., Mark
|
Hello!
|
Torrey: I am the lawyer in ECT legal responsible for our relationship with the NYMEX and monitoring our compliance with NYMEX position limits.
Phillipe Travis tells me you may be able to help him in preparing the reports of our positions with the option delta factored in.
Thanks very much for your assistance.
Mark
|
NYMEX Positions
|
Suzanne: Please send an e-mail to all of the lawyers and paralegals in the ECT Legal Dept.
asking them to reserve the conference dates and asking them to let you know their t-shirt sizes.
Once you have everyone's t-shirt sizes, please give the list to Dan.
Thanks,
|
e-mail to conference attendees
|
FYI: One of our legal consultants has mentioned that another of his clients is setting up an internet derivatives trading system.
They are using an outfit called Intuitive Products International based in New York and London to assist with system design.
Tana Jones (x33399) will be setting up a demo by these folks with our legal department needs in mind - if you'd like to attend, we'd be happy to have you and ask them to expand their presentation to include internet trading.
|
Internet Trading Consultants
|
Cynthia: As you know, the Bankruptcy Code revisions never made it through the recent Congress.
I understand they bogged down in the final days over issues which were essentially irrelevant to us in ECT.
I'm not sure you are aware of the importance to our trading business of certain of the other proposed revisions.
We anticipate that the revisions will be reintroduced in the next Congress and are beginning to think about ways that we can influence the outcome this time around.
Are you the right person in your shop for us to talk to about this?
If you could let me know, I'd appreciate it.
Thanks,
|
Bankruptcy Code revisions
|
Just a thought: I'm assuming it will be too difficult to build in customized credit provisions on a counterparty by counterparty basis on-line - but if there are master agreements in place, the credit provisions contained in them would apply to on-line trades.
The availability of the on-line system may therefore encourage more master agreements since the Credit Dept.
will limit a counterparty's trading volume until credit terms can be imposed.
|
On-line Trading
|
I currently have a 28800 modem but would like to get the fastest (within reason) modem we have available for a Compaq LTE 5280.
Please let me know if this is the kind of thing I can get by Friday since I leave for London Friday afternoon and would like to take the computer (complete with modem) with me.
If the new modem is not available in that time frame, I at least need a new pigtail for the existing card since the old one is broken.
Thanks and please charge 413/1157.
|
Modem Order
|
We're home this weekend - might go sailing (you're welcome to come if you want) but nothing big planned.
I'm in NYC next Wed - Sun., T's in a swim meet in Atlanta next weekend, NYC after that.
Nothing planned for the 26/27 weekend & still toying with the idea of Seattle for the 4th.
|
Plans...
|
Here's a very rough draft of a set of slides we might use.
Let me know if this is even close to what you have in mind.
I can have one of our paralegals and our graphics dept.
fill in whatever we need and make it look good tomorrow.
Mark
|
ISDA workshop
|
Jeff: In preparation for his meetings with Commissioner Newsome and Congressman Stenholm, Mark H. has asked for information including a bullet point list of our key issues and any appropriate background material.
I have prepared a draft issues list which is attached.
Would you please take a quick look at it and see if there is anything you think should be added and then forward it on to Mark?
He probably also needs the final itineraries.
Thanks for your help.
Mark T.
|
MEH Meetings with Newsome & Stenholm
|
Just a quick note to give you as much warning as possible.
The next phase of the office construction project will begin in a little over a week.
There is good news and bad news.
First the bad: the office which you currently occupy will be in the next construction phase.
Now the good: it looks like we will probably have a place for you to sit until your new office is ready.
Taffy Milligan will submit the move request (for next Friday - Jan. 12) and will have details directly.
Your assistants can help you order boxes and arrange your move.
|
Construction Schedule - Office Moves
|
Enron Online Transactions .
Any member of the Envera Network (an =01&Envera Network Member=018) who = is a=20 customer of EOL may submit to EGM an irrevocable offer to buy or sell any= =20 petrochemical, natural gas liquids, or plastics product that is then traded= =20 by EGM on EnronOnline, on the standard terms and conditions (including=20 without limitation quantity, quality, shipping dates and payment terms) as= =20 are established for such products on EnronOnline=01v, at a price that is be= tween=20 the bid and ask prices then posted by EGM on EnronOnline=01v, with such off= ers=20 being a binding commitment by such Envera Network Member to complete the=20 proposed transaction on the same trading day (as trading days are determine= d=20 by EGM).
EGM agrees to conditionally accept such offers, subject to the=20 following requirements and limitations: Current Envera Network Members (as of the Closing Date) may submit such=20 offers on or before the first anniversary of the Closing Date, and not=20 thereafter.
Any Envera Network Member who first becomes a member after the= =20 Closing Date but before December 31, 2001, shall have until the first=20 anniversary of its membership agreement with Envera in which to submit such= =20 offers, but not thereafter.
Any Envera Network Member who first becomes a= =20 member after December 31, 2001, shall not be entitled to submit any offers = to=20 EGM under this Section 8.2.
All of EGM=01,s obligations under this Section= 8.2=20 shall expire no later than December 31, 2002.
The irrevocable offer by the Envera Network Member must be placed as a lim= it=20 order on EnronOnline=01v and made irrevocable until the end of the trading = day=20 in writing (by facsimile or otherwise) or otherwise in accordance with the= =20 standard confirmation procedures of EGM.
In no event will EGM be liable fo= r=20 any failure to complete any limit order or trade.
=20 The Envera Network Member must be a registered user of EnronOnline=01v and= =20 qualified to trade in the product that is the subject of the offer, all in= =20 accordance with the standard terms established by EGM or EnronOnline=01v.
EGM will accept or reject the offer on or before the close of the trading= =20 day and will communicate such acceptance or rejection to the Envera Network= =20 Member; if accepted the transaction will be completed through EnronOnline= =01v.
=20 EGM's acceptance or rejection may be based on EGM=01,s ability to reverse t= he=20 trade with a third party or otherwise fully mitigate the risk created by th= e=20 trade, and on such criteria as EGM applies to such trades generally,=20 including without limitation its evaluation of the credit risk of such Enve= ra=20 Network Member based on EGM's standard credit policies then in effect.
Any trades of similar products by EGM shall be independent of the=20 transaction offered by the Envera Network Member.
EGM's trades will be for= =20 its own account and in no event shall EGM trade for or on behalf of the=20 Envera Network Member.
Neither EGM nor EOL will charge the Envera Network Member any transaction= =20 fees with respect to such transaction.
The aggregate number of transactions that EGM will be obligated to accept= =20 pursuant to this Section 8.2 shall not exceed one hundred (100) per Envera= =20 Network Member, and shall not exceed an aggregate of five thousand (5,000).
No offers shall be accepted by EGM under this Section 8.2 after December 3= 1,=20 2002.
No transactions under this Section 8.2 will be executed if, in the sole go= od=20 faith judgment of EOL or EGM, upon advice of its counsel, the result or=20 effect of which may be that any of EGM, EOL, or EnronOnline=01v, their=20 Affiliates or any of their respective businesses (i) could become subject t= o=20 regulation under the Commodities Exchange Act, as amended; (ii) could becom= e=20 subject to regulation by the Commodities Futures Trading Commission; or (ii= i)=20 could become subject to any regulatory proceeding, investigation, action,= =20 inquiry or review.
|
Section 8.2
|
I have a conflict with the Friday morning call this week.
Any chance you will be covering it?
I know you guys are busy this week.....
|
Friday ISDA call
|
Tana has pointed out that Net Works does not have a policy (at least not one we have heard of) regarding the handling of original contract documentation after it is executed.
There is not an Enron-wide policy but instead a patch-work of policies created by the operating units.
Tana and I would be happy to discuss this with you - or whoever you want to designate - and make suggestions if you don't already have a plan in mind.
|
Net Works Documentation
|
The EnronOnline team has asked if we can discontinue sending copies of the GTC's when EnronOnline transactions are confirmed.
They have suggested a sentence be added to the confirmation to the effect that it is subject to the GTC's which can be accessed on the website.
Any thoughts?
|
EnronOnline Transaction Confirmations
|
As you are all aware, the legal department has grown significantly over the last several months.
While so far we have been able to find places for everyone to sit, we have not added significantly to the available file cabinet space on the floor.
In fact, a number of file cabinets are now in locations where they will not be able to remain due to fire code requirements.
Please review the files you currently have stored outside your own office space and, after condensing, archiving and destroying as many as possible, give an inventory of your current usage and needs to your group leader.
Once we have an accurate picture of our needs, we can come up with a plan to allocate the available file cabinet space.
Most if not all of us will have to make significant sacrifices and modify our filing practices so that we each reduce our file space usage to our fair share.
|
File Space
|
I spoke with Susan Bulgawicz again today.
She relates the following points: Gensler has been subcontracted to do interior space planning and design for the new building generally While our work is probably in addition to that already agreed (and will therefore be billed to us) it should be covered by an amendment to the existing agreement rather than a new, separate agreement Bill Donovan feels that the design and space planning work should be done as near in time as possible to the actual construction work to avoid having to redo the work (and pay twice) to take into account new factors not apparent earlier (e.g.
organizational and technology changes) Bill's view is that we are 3 to 6 months premature at this point in doing this work for the legal department Susan suggested that you might want to call Bill to discuss this and talk about how you want to move forward.
|
Space Planning for the new building
|
They don't have the exclusive line (brand new) boat for our week but they do have this one.
If you can get in the night before we can actually stay on the boat and leave early in the morning - effectively getting an extra day of sailing.
If you want to check it out online, their website is www.moorings.com and the boat is a 463.
There's some good stuff on the site for people who've never been before - Bill might find it comforting.
|
Moorings quote
|
I have taken a stab at a Legal & Privacy Statement for the Broker version of EnronOnline.
Please take a look and let me know what you think.
Justin - I don't know if or when they expect to launch something like this in Europe but I expect it won't be long.
Mark G. has been working on the Broker version of the ETA (the "BETA") and a Fee Agreement which we can send along.
|
Broker Legal & Privacy Statement
|
Just wanted to say hello.
I hadn't heard from you lately and wondered how things were going.
Have you moved out of the hotel yet?
I know how depressing it can be going home to a hotel room every night.
Even though the hotel where I lived for the first three months I was in Jakarta was very nice, it was still just a hotel room.
I was so glad to get out of there into an apartment - major quality of life improvement.
We've been just busy enough for me this month: Austin for a couple of days on Presidents' Day weekend, a Rockets game last Friday, and we're off to the Diverse Works annual gala on Saturday.
Ted wants to leave town to do something - anything - next weekend but I'm trying to talk him out of it since we're taking that week-long cruise starting the following Saturday.
Since my arguments carry no weight, I'm just lucky that air fares are surprisingly high right now - $1000 rt to Ft. Lauderdale is even too high for Ted.
Ted's brother is working on a project here in town so we had him over the other night for dinner.
Ted had planned - can you guess - tuna steaks, having conveniently forgotten that his brother is allergic to fish.
How do you just forget something like that?
Luckily they went to the gym ahead of time and Ted mentioned what was on the menu so they stopped at the store and bought his brother a steak on the way home.
That nice January bump in Enron's stock price is ancient history now - pretty much the whole thing has been given back.
I'm still going to buy a new car - looks like an Audi A6 - but just one.
Hope you are doing well!
Mark
|
Hi Jim!
|
Marcus - I understand you are the new physical power online lawyer - lucky you!
Here's one that the EOL people are anxious to get covered.
I'd be happy to sit down and go over exactly what all this means and you'll probably want to talk to Tana a bit as well.
Mark
|
EnronOnline - Power Spread Long Description
|
I will be on vacation from Monday the 19th through Monday the 26th (returning to the office on Tuesday the 27th).
My cell phone and pager will not work either at sea or in the countries I will be visiting.
I can be reached via Maritime Communications Network at (877)225-7447 - you will need to give my name and the name of the ship - Celebration.
Since the rates are around $10 per minute, I don't plan to check my voicemail as often as usual but will call in when in port.
|
Vacation Memo
|
David - I haven't had a chance to look at this yet but thought I ought to send it on to you.
I will be out of the office (vacation) until the 27th and didn't want to lose the entire week.
Mark ps - I lost all of my voice mails the other day and I think there was one from you regarding a possible conflict - my understanding is that we're just assigning a bunch of transactions over from one party to another and in that case I tend to think there's no problem.
|
ETA Amendment
|
I have not yet done the performance reviews for several people in the group.
They are due by the 28th.
Please schedule 45 min.
for me with each of Sara, Mary, Brent, Carol and Bob Bruce on Tuesday afternoon or Wednesday morning.
|
Performance Reviews
|
I found this on a sailing magazine web page: An acquaintance who is a professor of literature at Stanford brought Patrick O'Brian to my attention, claiming him to be the finest living author writing in the English language.
Being an avid reader who had consumed about everything including, of course, all of Forster's Hornblower books, I had my doubts.
But after an increasingly mesmerizing reading of all of the sixteen O'Brian Aubrey/Maturin novels then in print with ever mounting captivation and awe, I wholeheartedly concurred.
After a second reading of the entire series which revealed to me previously undiscovered depths and glories I felt compelled to pay down the debt I owed this author for the wonderful, life-enriching experience he had given me.
Since O'Brian obviously loved the sea, it occurred to me to write offering him a fortnight's cruse aboard my Perini ketch, the 154 foot Andromeda la Dea, for himself and his friends without any interfering presence from myself.
I asked Danielle Steel if she thought O'Brian would be offended by receiving such a letter and her interesting reply was, "I get about 20,000 letters per year from readers and I have yet to receive a single one offering to do anything for me - he will be delighted even if age and circumstances prevent him from accepting."
So I wrote via his publisher, having literally no idea where in the world he lived, and after some forwarding delay I received his handwritten reply, in his fine and precise penmanship, saying "I accept your kind offer with perhaps obscene haste."
As Mr. O'Brian was to give a lecture tour of the United States in early 1995 that included San Francisco, I invited him to dinner the week of his visit and I first saw him in person when I attended his lecture in Herbst Hall.
His host was the poet laureate of America (Robert Haas).
I was both charmed and alarmed when introduced to O'Brian's lightening quick wit and rather acerbic manner.
The following evening he and his wife, Mary, came to my house in Belvedere for a 'literary' dinner with admirers and one or two other authors.
Mr. O'Brian was utterly charming, if perhaps a little aloof.
He took tremendous interest in an Admiralty Board (dockyard) model I have of an English First Rater of 1702.
He understood everything about that ship and greatly augmented my own knowledge.
After the other guests departed, we settled into a series of brandies by the fire and I discovered: 1) his capacity for serious drinking greatly exceeded my own; 2) his reserve only eased very slightly in the presence of this unknown American (me) and; 3) his knowledge of the practical aspects of sailing seemed, amazingly, almost nil.
After a half liter of cognac had vanished (and we were still calling each other Mr. O'Brian and Mr. Perkins), I produced a chart of the Mediterranean and we began to discuss the agenda for his cruise.
I had learned that the O'Brians' home was in Collioure, a village on the Mediterranean coast of France just north of the Spanish border, in Basque country.
The harbor of Port Vendres lies nearby, where Andromeda could pick all of them up.
O'Brian then suggested a cruise circumnavigating Sicily, a stop in Greece, dropping by Beirut and winding up with a comprehensive tour of the Balearic islands.
I was stunned!
How, I wondered, could this old salt possibly comprehend a tour of over 3,000 nautical miles with numerous port calls, in only 14 days in a yacht capable of only about 12 knots?
As I began to explain the physical limitations of time and space he added a desire to drop the hook in Naples, Capri and Tangiers as well.
While I could not reconcile this plan with reality, I assumed it was the wine in control and then I was both startled and pleased when he added at the evening's end that he had a major non-negotiable condition to accepting my offer; namely that I personally would join him, Mary and their guests aboard my yacht.
?
In May 1995, as the departure date appoached, I had a rough time getting Andromeda to the tiny and picturesque Port Vendres in time to pick them up.
Every time I have been in the Gulf of Lions, I have been pasted and this was one of the worst.
Andromeda broke her inner forestay and lost all telecommunication as well, but after a real dusting we made it and O'Brian and Mary showed me around the village and offered a lunch at their modest and charming home.
He took tremendous pride in his wine made from his own grapes, pressed and fermented in barrels in his cellar.
I was fascinated by his office, where the books were written.
It was lined floor to ceiling with reference works on an array of subjects (botany, geography, zoology, medicine, etc.)
in several languages, but not a single volume dated later than 1820.
He was literally immersed in the period of his work.
The following morning we were joined by his close friend, the scholar (and foremost authority on Peeps) Richard Ollard, his publisher Stuart Proffit and his agent Vivien Green.
We finalized our itinerary with the decision to visit all the Balearic islands and O'Brian, somewhat wistfully, asked if an additional stop in Istanbul would not be possible?
Told it was not, he boarded radiating the impression that I was something of an Indian giver, short-changing him on his yachting holiday.
Underway to Menorca beneath a sunny sky with a twenty knot following wind, the sailing was marvelous and O'Brian was delighted.
I introduced him to the helm, but he seemed to have no feeling for the wind and the course, and frequently I had to intervene to prevent a full standing gybe.
I began to suspect that his autobiographical references to his months at sea as a youth were fanciful.
He had no idea of the limitations of even a big yacht like Andromeda in terms of the handling and actual distance we could cover in a day.
However, he and Mary adapted quickly to the yacht with no trace of seasickness.
Mary, quiet, kind, interesting and interested, was wonderful to have aboard.
However, she was very frail.
They were both nearly 80 and I constantly feared she would take a tumble with the ship's motion, but thankfully this never occurred.
|
O'Brian article
|
Bill - If Sam's description below of the GCP procedure is correct, it looks to me like something needs to be changed.
The difficulty lies in the fact that the confirmation system reads the counterparty's name from Global Counterparty.
Since divisions of companies are not legal entities they do not have the power to contract in their own names.
If the correct legal name is not in Global Counterparty, the confirmation goes out with the wrong legal name on it seriously compromising the contract itself.
That is the source of Tana's concern regarding the correct entering of divisions in the system.
My suggestion is that Global Counterparty use the same name that the customer has signed on the EnronOnline Password Application -- my understanding is
|
Urgent - Counterparty Divisions: Cargill Ferrous International
|
Ken - I have a question about the interpretation of this paragraph of the EnronOnline Legal & Privacy Statement.
Maybe we can talk about it when we talk about the clearing issue.
14.
In the course of your use of this website, you may provide, or Enron may otherwise obtain, information about you or your business activities.
By using this website, you expressly consent to Enron (1) using this information to assess the function and performance of this website, to assess the needs of its customers, to market Enron's products and services and for the other purposes set out in this paragraph 14, and (2) transferring this data to Enron subsidiaries throughout the world for the purposes specified in (1) above.
Any information which you provide or which Enron otherwise obtains will be used solely by Enron and will not be sold or made available to third parties, with the exception of the third parties providing data processing or similar services to Enron, or in connection with Enron's provision or marketing of products and services to you.
|
Legal & Privacy Statement
|
We have reservations with Eric, the golf pro, on Friday afternoon at 3:00.
He thinks 4 or 5 holes will takes us 1 1/2 to 2 hours.
We don't have to play just holes 1 through 5 but can pick and choose -- based to some extent on
|
Reservations
|
You always make me laugh.
Why don't you just pay for you.
You've been footing the bill for Amanda & her friends all these years; it's your turn to take a break!
By the way, I don't remember pointing out that she is spoiled - thinking it often enough, but not pointing it out.
Of course we both know how my tongue loosens and my memory locks up in direct proportion to the volume of alcohol consumed..... "Linda Hayman" <LHAYMAN@skadden.com> 05/03/2001 05:51 PM To: <Mark.Taylor@enron.com> cc: Subject: Re: Fwd: St. Regis cost speaking of this bucket.
I think it is lovely that you are giving Amanda a graduation gift but - trust me - should would rather have another pair of earrings than have a free seat for me on the boat.
I didn't even know you when I graduated so it is much too late to give me a graduation present.
Won't you let me pay half ( the half of the boat that Bill and I are occupying)?
As you have pointed out amanda is too too spoiled.
Did anyone get you a yacht when you graduated?
|
spoiled? did I say spoiled?
|
From marshallconsultants.com SENIOR MEDIA RELATIONS PROFESSIONALS with the savvy to deal with varied and= =20 sensitive issues needed for the leading organization in one of North Americ= a=01, s top spectator sports.?
Work will require heavy travel to sporting events= =20 across the country =01) in some cases as many as 30 weekends per year away = from=20 home base.?
Salaries are open, starting at about $80K but potentially going= =20 higher than that.
(Contact Justin Meyer) ?
Email Justin Meyer
|
ad
|
As you already know, it's that time again.
Since I am leaving on vacation Friday morning, please use the system to input your suggested reviewers no later than noon tomorrow (Thursday) so that I can approve them and get the process started before I leave.
Sorry for the inconvenience.
Mark
|
Performance Review Process
|
Ken Raisler will be here on Monday, May 21 to conduct several training sessions for the weather and steel trading desks.
If you can work it into your schedule, please try and attend one or more of these sessions.
Brent will have further scheduling details.
Mark
|
Trader Training Sessions
|
Thanks for forwarding all the e-mails while I was out last week.
I found this one in my in-box when I got back this morning.
Is it yours?
|
Graham's leaving date
|
Julia sent me a copy of your memo following up on one of the questions asked at the session earlier this week.
I would like to ask a follow-up question: Do we lose the benefit of the special treatment under the bankruptcy code when we enter into cross-product (i.e.
physical and financial products) netting and joint credit support arrangements.
If we agree with a counterparty to net all of our trading exposures under multiple agreements (swap agreements and gas, power, steel, coal, etc.
trading agreements) to determine how much credit support should be posted and then only ask for a single LC that supports the whole shebang, do we lose this protection since arguably we are no longer just "under a swap agreement?"
|
Letters of Credit; Preference; Swap Transactions
|
I've got three undeveloped rolls of film in my car that I keep meaning to get developed but always forget until I'm not in the car.
I'll get around to it one of these days.
My address is: 1322 Rutland St. Houston, TX 77008 (713)863-7190
|
The Bitter End
|
It turns out that quite a bit has been happening without us so we may be inundated with information over the next day or so.
Let me know if the message below does not come through in color since it will be difficult to decipher.
Louise is quite anxious to finalize the ETA, PA and Read-only PA and I explained that we were still waiting for the proposed changes from London.
Knowing Louise I have a feeling we may see that stuff soon.
Since we seem to be a bit behind schedule, Louise agreed that an all-hands legal meeting next week might be premature and she is contacting the London team to discuss scheduling.
I'll let you know as soon as I have anything more to report on the calendar.
Mark
|
Registration Process Questions
|
From the NYT article: The business that Thomas D. Gros is building for Enron remains untested.
But his entire career seems to have been aimed at the opportunity.
He studied aerospace engineering, worked as an analyst for the Central Intelligence Agency, earned an M.B.A. and set up a natural-gas trading operation -- competing against Enron -- for British Petroleum.
He also did a
|
Tom Gros
|
Paul: Since the recent pet coke swap (deal 8025) is really a US deal, we should probably do the documentation here.
Would you please send me a copy of the confirm for the coal swap you worked on for us to use as a starting point?
Thanks,
|
Coal Swap
|
Here are the most recent versions from Clifford Chance.
They were sent to Sullivan & Cromwell yesterday to be "Americanized" and are still drafts with a number of open issues yet to be resolved - so we can easily make changes as necessary to solve issues you may raise.
The PA = Password Application - to be signed by counterparty & sent to us before a password is issued.
The ETA = Electronic Trading Agreement - to be agreed to online before trading is permitted.
The ROETA = Read Only ETA - to be agreed to online by persons wishing access to the site to view but not trade (probably misnamed - should be ROPA or something that doesn't sound like they'll be able to trade).
|
Online Trading Agreements
|
I will be handling the derivatives side of the ETOL transaction this time so future communications should probably come to me directly.
I will be reviewing the ISDA draft this weekend and it would be helpful if I could get some sort of description of the overall transaction.
Is there a term sheet or executive summary of the deal?
If so, my fax # is (713)646-3490.
|
ETOL
|
I've gone back through the ISDA Credit Support Annex and the "green book" and my conclusion is that unless we modify the standard form, we have to give an Independent Amount back to the counterparty when we go out of the money far enough (note that the definition of Exposure results in a negative number when we are out of the money reducing the Credit Support Amount below the Independent Amount).
The theory there is that as the market moves against us, we are cushioned by our "out-of-the-moneyness" and will be able to ask for support as the market moves back in our favor before we are actually in the money.
I'm afraid that Credit has been operating under the assumption that we get to keep Independent Amounts until the Transaction terminates.
We need to set up a system with Credit so we all know what is meant on the credit work sheets -- i.e.
whether a cushion or up-front amount should be
|
Independent Amounts
|
One day a cat dies of natural causes and goes to Heaven.
There he meets the Lord himself.
The Lord says to the cat, "You lived a good life and if there is anyway I can make your stay in Heaven more comfortable, please let Me know."
The cat thinks for a moment and says, "Lord, all my life I have lived with a poor family and had to sleep on a hard wooden floor."
The Lord stops the cat and says, "Say no more," and a wonderful fluffy pillow appears.
A few days later six mice are killed in a tragic farming accident and go to Heaven.
Again the Lord is there to greet them with the same offer.
The mice answer, "All of our lives we have been chased.
We have had to run from cats, dogs, and even women with brooms.
Running, running, running; we're tired of running.
Do you think we could have roller skates so we don't have to run anymore?"
The Lord says, "Say no more," and fits each mouse with beautiful new roller skates.
About a week later the Lord stops by to see the cat and finds him in a deep sleep on the pillow.
The Lord gently wakes the cat and asks him how was he doing.
The cat replies better than I could have ever expected.
And those Meals on Wheels you've been sending by are theeeeeeee best!!!"
|
You can see it coming.....
|
I think this is the most recent version of the ETA.
Obviously, this is the UK version and Sullivan & Cromwell are turning it into a US document.
The US version will be governed by NY law and contain an arbitration clause.
We're also trying to figure out how much to say about the confirmation process since it may vary from product to product and will almost certainly be different from the UK version.
Speaking of which, I was surprised to find that they have the telephone conversation (and in this case the web site records) control over a confirmation which has been signed by both parties.
What's the practice in your part of the world?
One alternative is to insert the language (or something like it) that we use in financial trading which says that we will send a written confirm, gives the counterparty a short time (2 or 3 days) to respond and indicates that silence will be deemed acceptance.
Would that work for your deals?
Anyway, I'm in NY today and tomorrow, back in the office on Wed. Louise is insistent that the GTC's be available to be uploaded this weekend.
I'll be calling in periodically tomorrow and will try to get you since I'm sure you will have issues to discuss - and now is the right time to get changes made to the ETA if necessary.
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Revised documentation
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Here is a revised version of my draft GTC's for derivatives transactions (I think marked from the draft I left with you).
Any comments or suggestions?
I've promised these to Louise by Friday.
Thanks,
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Derivatives GTC's
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My apologies for any confusion resulting from my e-mail yesterday.
While the GTC's must be finished this morning, Legal's revisions to the short and long descriptions are not due until Friday August 6.
I think it would make sense for us all to get together to discuss how these work early next week.
I will ask Taffy to set something up.
Mark
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Online Trading Product Descriptions
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Louise, I hope you had a pleasant weekend in N.O.
If you have a few minutes to spare, I'd like to get together with you this afternoon to talk about the weather deal documentation.
As I tried to draft up the standard GTC's I realized there are more variables in these transactions than are currently listed in the short & long description lists.
Mark
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Online Weather Transactions
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'Twas The Night Before Christmas as written by a lawyer 'Twas the nocturnal segment of the diurnal period preceding the annual Yuletide celebration, and throughout our place of residence, kinetic activity was not in evidence among the possessors of this potential (party of the first part), including that species of domestic rodent known as Mus musculus.
Hosiery was meticulously suspended from the forward edge of the wood burning caloric apparatus, pursuant to our anticipatory pleasure regarding an imminent visitation from an eccentric philanthropist among whose folkloric appellations is the honorific title of St. Nicholas (party of the second part).
The prepubescent siblings, comfortably ensconced in their respective accommodations of repose, were experiencing subconscious visual hallucinations of variegated fruit confections moving rhythmically through their cerebrums.
My conjugal partner and I, attired in our nocturnal head coverings, were about to take slumberous advantage of the hibernal darkness when upon the avenaceous exterior portion of the grounds there ascended such a cacophony of dissonance that I felt compelled to arise with alacrity from my place of repose for the purpose of ascertaining the precise source thereof.
Hastening to the casement, I forthwith opened the barriers sealing this fenestration, noting thereupon that the lunar brilliance without, reflected as it was on the surface of a recent crystalline precipitation, might be said to rival that of the solar meridian itself - thus permitting my incredulous optical sensory organs to behold a miniature airborne runnered conveyance drawn by eight diminutive specimens of the genus Rangifer, piloted by a minuscule, aged chauffeur so ebullient and nimble that it became instantly apparent to me that he was indeed our anticipated caller.
With his ungulate motive power traveling at what may possibly have been more vertiginous velocity than patriotic alar predators, he vociferated loudly, expelled breath musically through contracted labia, and addressed each of the octet by his or her respective cognomen - "Now Dasher, now Dancer..." et al.
- guiding them to the uppermost exterior level of our abode, through which structure I could readily distinguish the concatenations of each of the 32 cloven pedal extremities.
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night before christmas
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Here is the spreadsheet which lists all of the existing counterparties proposed to receive access to the online trading system.
Louise has asked us to identify for each counterparty those products from which, for legal reasons, such counterparty should be restricted.
As you might expect, our goal is to have as few restrictions as possible.
Since it is so wide, you may find that it is easier to modify the spreadsheet (by hiding various columns) in order to print it out.
If you need any help in this regard, please let me know.
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Counterparties versus Product Type Matrix
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I'm looking forward to seeing you Friday night.
I'll bring along some sailing info.
but thought I'd let you know now what we've got in mind.
Dan & Jamie are lined up so if you guys are still interested there would be 6 of us.
We have gotten a quote for a relatively new 46' sailboat in the British Virgin Islands for the week of Thanksgiving.
We'd fly down there on Saturday the 20th, pick up the boat the next day and return either Saturday the 27th or Sunday the 28th.
[The return date is still under discussion - so far we have (i) Jamie who wants to fly Saturday so we have a day at home before going back to work, (ii) Mark who likes to spend as much time on the boat as possible so wants to come back Sun., and (iii) Ted who when he heard the question said "Let's start back Saturday and spend the night in South Beach!"]
The charter company is the Moorings (their website is www.moorings.com) and the specific boat we reserved is called a Moorings 463.
You can see a floor plan and photos on the web but the boat has three separate double cabins each of which has its own bathroom.
Each day's schedule is usually pretty flexible - get up whenever (I seem to remember Jamie getting up pretty early & making coffee), have breakfast on the boat, decide where to go and sail off to the next island we've picked out, maybe stopping at one or two interesting looking spots on the way, maybe not.
Maybe stopping for lunch somewhere, maybe making sandwiches while we sail and maybe waiting for lunch til we stop for the day.
Most days we only actually sail for a few hours and are anchored in a little bay by 2 or 3:00 and spend the afternoon swimming (Ted's favorite), snorkeling (the masks, etc.
come with the boat), hiking on shore, exploring the coastline in the dinghy or sitting around on the boat or beach reading, chatting, napping or whatever (my favorite).
There's a CD player and we listen to a variety of music - luckily Ted has so far been able to restrain his heavy metal proclivity for the duration of the trip.
If you scuba dive there are dive companies that will come meet the boat and take you on a dive trip - there is at least one really good wreck dive (in 70 - 90') in the BVI.
If you want to learn to dive, you can take the classroom and swimming pool instruction in NYC and do your certification dives in the BVI (Dan & Jamie might be diving, Ted & I probably won't).
Sunsets are often spectacular and signal cocktail hour for me.
There's usually at least one restaurant on shore in most of these anchorages where we go for dinner but the charter company stocks the boat with food (there's a fridge, stove & bbq grill on the boat) and as you might guess Dan and Jamie are pretty good cooks so we can always eat on board if we don' feel like going ashore.
While no one is excluded from any activities and everyone can participate in planning the itinerary, we don't always do everything together, either.
Everybody usually pitches in and shares what work (cooking, cleaning up, sailing stuff) there is, although if only from our keen sense of self-preservation you and Ted probably wouldn't be expected to cook.
In the past Jamie has been the only smoker and he has invariably confined his habit to the downwind portion of the deck.
As for $, the boat, provisioning (food on board for breakfast lunch and a few dinners), taxes, airport transfers and a hotel room for the first night we get there all comes to about $760 per person.
Extras include drinks (only fair since you and Jamie won't be imbibing as much as the rest of us) and any dinners ashore and of course the dreaded airfare.
I've tentatively got flights for you (through the boat company) that come to $544 per person, though if we decide to come back on Saturday that might go down.
Ted & I usually try to see if there is some way to use frequent flyer miles but we're not always successful.
It's such a popular week to sail we need to decide pretty soon so we can put a deposit down - the boat is not actually reserved until we do.
I'd better stop & send this - it's turned out to be a good bit longer than I intended but I get carried away sometimes when I daydream about sailing!
Check out the website & let me know if you have any questions.
|
Friday/Sailing
|
Marcus: When we were in New Orleans I mentioned that I might be planning a holiday in Germany - well, I've finally gotten around to scheduling it.
I'm flying into Munich on the 27th and leaving from Amsterdam September 9.
If you are going to be in the office next Monday or Tuesday (when I'll be in the London office), I'd really appreciate a few minutes of your time to get whatever suggestions you would like to make.
If you will be out next week, maybe we could chat by phone tomorrow or Friday.
Thanks!
|
Holiday in Germany
|
In order to complete the approved list of counterparties fo the new online trading system I need a list of master agreements you have negotiated that do not have all the necessary representations (e.g.
trade option exemption) and definition references to permit trading energy commodity derivatives.
Friday noon would be soon enough.
Thanks,
|
Restricted Mater Agreements
|
Hey Yao!
How are you doing these days?
We never see you anymore.
I'm going over to London on Saturday - any chance you'll be in that part of the world?
On a business note, we are getting set up to trade energy commodities and derivatives online and one of the things we have to do is figure out what we can trade with each potential counterparty.
Do you remember negotiating any master agreements for ECT that did not contain the necessary elements for trading energy commodity derivatives?
In particular I'm thinking about things like the trade option exemption representations and the commodity derivatives definitions provisions.
Thanks!
|
Restricted Master Agreements
|
Here is the North American legal issues list I prepared for Mark.
He actually called me down to ask for it yesterday (my first day back no less).
Obviously I've kept it to just the major areas where there might be residual legal risk.
He seemed satisfied enough with the format.
I explained that I had mentioned his request to you and that you were working on a European version which might turn out to be somewhat longer since you have so many jurisdictions to deal with.
|
Legal Issues List for MEH
|
The Online Trading IT people have sent us a revised version of the long descriptions and a document spelling out the "rules" for how they are put together.
Louise is asking for our final comments by close of business on next Wednesday (August 18th).
Since I will be out of town then, please forward your comments and/or approvals directly to Mark Dilworth.
Questions can be directed to Mark Dilworth, Marcello Romano or Louise Kitchen, all on the online trading team.
|
Product type long definitions - legal review
|
Joao - I'm making another business trip to Brazil - this time just to Sao Paolo.
I'll be there Tuesday to Thursday of this week.
Any chance you will be nearby?
I tried to arrange a meeting in Rio too but unfortunately our office there is quite small and the only people I need to see will be in Sao Paolo then.
I also still get to London every once in a while.
Let me know when you are there - maybe we can have dinner.
Mark
|
Trip to Brazil
|
Mark - Would you be available to sit down with me Monday morning (say beginning at 10:30) to go over the spreadsheet?
I have quite a few comments on the financial transaction items that I was able to understand and several questions on areas I haven't yet been able to decipher.
I am particularly concerned about the Weather Products generally and the Floating Prices for all financial products (the Index tab).
If you could let me or my assistant know so I can work out my calendar for the day I'd appreciate it (I've blocked out 2 hours but it might not take that long).
Unfortunately I'm leaving town mid-afternoon so I have to get these wrapped up.
I'm at x37459.
Thanks!
|
Long Descriptions Spreadsheet
|
Could you please send Tana the list of countries from which online trading of derivatives with ECT is permissible.
She is trying to complete the Counterparty spreadsheet for Louise.
Thanks!
|
Approved Countries for Online Trading
|
Please note that Mark Dilworth's demonstration scheduled for tomorrow morning (11:00 EB2601a) will not be of the entire EnronOnline system but will focus on the portion of the system that builds the long descriptions.
The system now builds the entire long description from the various elements - most of which we have already reviewed - and displays them as they will be viewed by counterparties online.
It is particularly important that the lawyers responsible for the long descriptions and the GTC's attend so that we can complete the review process.
If you can not attend, please let me know so we can set up a time for Mark to show you how to access the system.
Thanks,
|
Wednesday Online Trading Meeting
|
Dave: One item that was left open after my meeting with Mark D. this morning was what the Index should look like and how much input we have had from the confirm desk.
My inclination was that the index should be the same language that we currently use in the confirmation on the theory that the GTC taken together with the long description should result in a complete, unambiguous contract.
Mark felt that the index should provide a more complete description than the short description abbreviation but that the full legal text could wait for the paper confirm.
Given Mark's view as to how this field should be dealt with, it may be that the confirm desk has in fact looked at all of these and said they look fine as far as they go and has not attempted to correct them with the full legal language.
Mark said he would be contacting you himself but I thought it might make sense to give you my version as well.
What are your thoughts?
If you'd like to discuss, I will be in by 9:00 tomorrow but have a meeting at 10 and then the meeting with all of the lawyers and Mark to discuss the further long description review at 11.
Mark
|
Long Descriptions - Indexes
|
Just a 'heads up' - there is now no doubt that there will need to be some major revisions to the index language.
I am meeting with some of the folks from the confirm desks this afternoon to get them started on a further review.
Can you please arrange to have the following people given access to the Product Manager: Jeff Sorenson Dale Neuner Bob Bowen Lynn Shivers Kevin Sweeney
|
Online Indexes
|
Can you guys please send over a copy of the questions that were submitted to local counsel in Europe relating to the online trading project?
Alan needs it for Australia and Louise has asked me to deal with Columbia.
Thanks,
|
Local Counsel Questions
|
Here are several of the contracts we are planning to use for the online system.
I wish I could tell you these are the final (or even the most recent) versions of the documents but things have changed so frequently that I'm afraid these may not be quite up to date.
They do have the advantage of being in my directory and therefore available to send to you today.
I don't think the final changes will be significant but if you want to use these as starting points, please let me know so I can be sure you have the latest material.
The PA is the Password Application which is the only document the prospective counterparty actually signs by putting pen to paper.
The first time the counterparty logs on to the system with its approved password, it is required to agree to the ETA (Electronic Trading Agreement) by clicking on an "I Agree" box after scrolling through the agreement.
The GTC's are the contractual terms that apply to online transactions if there is no master agreement in place.
Legal will have the ability to restrict a counterparty to trading only certain products online if we feel it is necessary.
While most financial transactions will be governed by GTC's that look like our "Omnibus" documentation, the weather derivatives look more like a "Deemed ISDA."
One final complication, the credit group has asked us to create two sets of documents: one for highly creditworthy counterparties which will have no credit provisions included and a second set for counterparties credit is not quite comfortable with which will contain a provision allowing us to call for collateral if we choose.
|
Online Trading contracts
|
Here is my first cut at an Issues List for Wednesday.
Let me know what you think.
My meeting with Mark H. has been moved up to 1:00.
He may want to get you on the phone then but I don't really know.
|
Oct. 6 Issues
|
We have not decided "to prevent any regulated utility from completing any financial transactions" online.
If we have already satisfactorily concluded the necessary due diligence with respect to a particular utility, they will be approved.
It is only with respect to those utilities which have not yet been researched that we are withholding approval.
The due diligence required involves asking the utility for certain information concerning their organization and regulatory situation, hiring local counsel in the relevant state and having research done into the laws and regulations in place there and into any public utility commission orders respecting the particular utility in question, and on occasion requesting an opinion letter from the utility's counsel.
We usually begin that process only when a trader believes there is a likelihood of a sufficient volume of trading with the utility to justify the time and expense.
FYI, the due diligence process has in the past revealed circumstances which prevented the utility from trading derivatives or required actions to authorize such trading which had not been taken.
A recent count showed about 10 executed master agreements and another 30 to 40 in one stage or another of the due diligence/negotiation process.
Louise Kitchen
|
Online Derivatives Trading with Regulated Utilities
|
How does the New Product Type Approval process work?
We have received several test messages but it is not clear how we look beyond the short description in the e-mail to see the long description (can the short description be set up as a hyperlink to the web-site?)
or how we are supposed to respond (my attempted reply was rejected as undeliverable).
|
Procedures for New Product Type Approval
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I was glad to see that the next Monmouth meeting was rescheduled for a time other than December.
I guess Monmouth is a little harder to get to than Chicago but it will be nice to see the campus again.
I'm going to be in New York Nov. 1 & 2.
Any chance of getting together?
Mark
|
Good Morning!
|
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