Document/Exhibit Description Pages Size
1: U-1 Application or Declaration -- formu1 29 136K
2: EX-99.1 Exhibit B-1 3 15K
3: EX-99.2 Exhibit G - Form of Notice 8 36K
4: EX-99.3 Exhibit H - List of Applicants 6 61K
5: EX-99.4 Exhibit S-1 - Services and Indemnity Agreement 5 25K
6: EX-99.5 Exhibit S-2 11 36K
7: EX-99.6 Exhibit T - Ena Examiner Letter 2 9K
File No. 70-______
United States Securities and Exchange Commission
Washington, D.C. 20549
----------------------------------------
Form U-1
Application/Declaration
Under the
Public Utility Holding Company Act of 1935
----------------------------------------
Enron Corp.
Indicated Enron Corp. affiliates
and subsidiaries
1400 Smith Street
Houston, Texas 77002
(Names of companies filing this statement
and addresses of principal executive offices)
----------------------------------------
N/A
(Name of top registered holding company)
----------------------------------------
Enron Corp.
Attn.: Corporate Secretary
1400 Smith Street
Houston, TX 77002
(Names and addresses of agents for service)
The Commission is also requested to send copies
of any communication in connection with this matter to:
Robert H. Walls, Jr. William S. Lamb Sonia C. Mendonca
General Counsel LeBoeuf, Lamb, Greene & LeBoeuf, Lamb, Greene &
David M. Koogler MacRae, L.L.P. MacRae, L.L.P.
Assistant General Counsel 125 West 55th Street 1875 Connecticut Avenue NW
Enron Corp. New York, NY 10019-5389 Washington, DC 20009
1400 Smith Street Telephone: (212) 424-8170 Telephone: (202) 986-8195
Houston, TX 77002 Facsimile: (212) 424-8500 Facsimile: (202) 956-3321
Telephone: (713) 853-6161
Facsimile: (713) 646-6227
Facsimile: (713) 646-3092
TABLE OF CONTENTS
Item 1. Description of the Proposed Transactions..............................1
A. Introduction and General Request........................................1
B. Enron and its Subsidiaries..............................................3
C. The Bankruptcy Cases and the Chapter 11 Plan............................3
1. The chapter 11 plan represents a compromise and settlement of
significant issues..................................................4
2. Property to be Distributed Under the Plan...........................6
D. Key Elements of the Plan................................................7
1. The Sale or Distribution of Portland General........................7
a. Sale of Portland General..........................................8
b. Distribution of Portland General Shares...........................8
2. Formation of Prisma and CrossCountry and the Disposition of the
Debtors' Other Assets, Generally...................................11
a. Prisma...........................................................11
b. CrossCountry.....................................................13
c. Other Assets and Claims..........................................15
E. Treatment of Claims....................................................16
F. The Creditor Solicitation and Confirmation of the Plan.................17
G. Administration of the Estates..........................................19
1. Post-Confirmation Administration...................................19
2. Post-Effective Date Administration.................................19
H. Overall Fairness of the Plan...........................................21
Item 2. Fees, Commission and Expenses........................................22
Item 3. Applicable statutory provisions and legal analysis...................22
Item 4. Regulatory approvals.................................................24
Item 5. Procedure............................................................24
Item 6. Exhibits and Financial Statements....................................24
Item 7. Information as to Environmental Effects..............................25
FORM U-1
APPLICATION/DECLARATION
UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Item 1. Description of the Proposed Transactions
A. Introduction and General Request
Enron Corp., an Oregon corporation ("Enron"), and a public utility
holding company,/1 files this application on its behalf and on behalf of its
subsidiaries and affiliates listed in Exhibit H (collectively "Applicants" or
"Debtors"). Each of the Debtors commenced a bankruptcy case under chapter 11 of
title 11 of the United States Code ("Bankruptcy Code"), in the United States
Bankruptcy Court for the Southern District of New York ("Bankruptcy Court").
As set forth in more detail below, by orders, dated January 9, 2004,/2
the Bankruptcy Court (a) approved, among other things, the adequacy of the
information contained in the disclosure statement (the "Disclosure Statement")
related to that certain Fifth Amended Joint Plan of Affiliated Debtors Pursuant
to Chapter 11 of the United States Bankruptcy Code, dated January 9, 2004 (the
"Plan"), filed by the Debtors and (b) established, among other things, (i) April
20, 2004 as the date for commencement of the hearing to consider confirmation of
the Plan in accordance with section 1129 of the Bankruptcy Code, (ii) March 24,
2004 as the last date for filing objections to confirmation of the Plan and
(iii) procedures in connection with the solicitation of acceptances and
rejections to the Plan. The Securities and Exchange Commission (the
"Commission") was present at the hearing to consider approval of the Disclosure
Statement. In accordance with the Disclosure Statement Orders, the Debtors have
posted solicitation materials on the appropriate website, prepared documents and
diskettes for distribution and begun distribution of such materials to creditors
and equity interest holders.
Enron, the Commission's Division of Investment Management ("IM") and
the Commission's Division of Enforcement ("Enforcement") have held discussions
regarding the registration of Enron as a public utility holding company under
Section 5 of the Act, the Plan, the solicitation of votes accepting or rejecting
the Plan, and various transactions in furtherance of the chapter 11 cases that
may require Commission authorization under the Act were Enron a
---------------
1 Enron was formerly an exempt holding company under the Act by virtue of two
applications filed under Sections 3(a)(1), 3(a)(3) and 3(a)(5) of the Public
Utility Holding Company Act of 1935 ("Act"). By order dated December 29, 2003,
Holding Co. Act Release No. 27782, the Commission denied the applications filed
under Sections 3(a)(1), 3(a)(3) and 3(a)(5). Enron subsequently filed an
application for exemption under Section 3(a)(4) of the Act on behalf of itself
and two other entities. SEC File No. 70-10190. The Section 3(a)(4) application,
as it related to Enron but not the other two applicants, was set for hearing by
Commission order dated January 14, 2004, Holding Co. Act Release No. 27793.
2 Order on motion of Enron Corp. approving the disclosure statement, setting
record date for voting purposes, approving solicitation packages and
distribution procedures, approving forms of ballots and vote tabulation
procedures, and scheduling a hearing and establishing notice and objection
procedures in respect of confirmation of the plan, Docket No. 15303, In re Enron
Corp., et al., Chapter 11 Case No. 01-16034 (AJG), Jan. 9, 2004 (U.S. Bankruptcy
Court, S.D.N.Y.). Order, pursuant to sections 105(a), 502, 1125 and 1126 of the
Bankruptcy Code and rules 3003, 3017 and 3018 of the Federal Rules of Bankruptcy
Procedure establishing voting procedures in connection with the plan process and
temporary allowance of claims procedures related thereto, Docket No. 15296, In
re Enron Corp., et al., Chapter 11 Case No. 01-16034 (AJG), Jan. 9, 2004 (U.S.
Bankruptcy Court, S.D.N.Y.) (collectively, the "Disclosure Statement Orders").
These orders are attached hereto as Exhibits J-1 and J-2.
1
registrant under the Act./3 In addition, a format for a comprehensive settlement
of the exemption application filed by Enron and other parties in SEC File No.
70-11373 has been discussed. This application (the "Plan Application"), and a
second application (the "Omnibus Application"), are the result of such
discussions.
Consistent with such discussions, Applicants request herein an order
of the Commission under the Act, (i) approving the Plan under Section 11(f) of
the Act; (ii) authorizing Applicants to continue the Bankruptcy Court authorized
solicitation of votes of the Debtors' creditors for acceptances or rejections of
the Plan and to make available to creditors a report on the Plan, as prescribed
in Section 11(g) of the Act; and (iii) authorizing Applicants to conduct such
transactions as may be necessary to effect the Plan. Applicants will file a
separate application to seek authorization for the sale of Enron's only public
utility subsidiary company, Portland General Electric Company ("Portland
General") to a third party, or the distribution of the common stock of Portland
General to creditors or to a trust, as contemplated by the Plan.
The Omnibus Application (SEC File No. ____, filed ____) is a request
by Enron and its debtor and non-debtor subsidiaries for authorization to conduct
business under the Act in a manner that furthers the chapter 11 process. In that
regard, the Omnibus Application requests authorization for the Enron group
companies to reorganize their nonutility businesses, enter into settlements,
asset sales and other transactions involving guarantees, indemnifications and
the acquisition of securities, to pay dividends and redeem securities to
transfer value among the group in connection with rationalizing Enron's complex
corporate structure, and several other transactions that may be conducted by
Enron group companies, all through July 31, 2005. The Omnibus Application is
supplemental to the Plan Application and it is intended that the Commission's
authorization of both applications would give the Enron group sufficient
authorization under the Act to solicit creditor votes for the plan, obtain the
confirmation of the plan before the Bankruptcy Court, implement the plan, and to
conduct business within the parameters specified in the Omnibus Application
pending the confirmation and full implementation of the plan. The Plan and
Omnibus Applications are predicated on Enron's registration under the Act
immediately after the authorizations requested in such applications have been
granted.
Applicants respectfully request the Commission to authorize the Plan
and Omnibus Applications on an expedited basis. Applicants are in the midst of
selling, restructuring and liquidating many subsidiaries and resolving contracts
and claims. Without adequate authorization under the Act, Applicants would be
required to stop many transactions that are currently being structured,
negotiated or in progress, many of which have already received authorization
from the Bankruptcy Court, and to postpone entering into other transactions
until appropriate orders from the Commission can be issued. Many of these
transactions represent significant value to the Debtors' estates and their
creditors. Delay could cause significant adverse effects on the Debtors and
creditors. For example, delay could cause purchasers to withdraw from a proposed
transaction, interest rates on negotiated financings may change, tax benefits
may be lost, and other adverse effects may occur. As noted above, consistent
with the requirements set forth in the Disclosure Statement Orders, the Debtors
are in the process of soliciting creditor votes on the Plan. A timely order and
report on the Plan issued by the
---------------
3 A representative of the Creditors' Committee (defined below) attended some of
the discussions as an observer.
2
Commission could be included in the Plan Supplement that is scheduled to be
filed with the Bankruptcy Court and placed online at www.enron.com no later than
March 9, 2004 or such other date as authorized by the Bankruptcy Court. By doing
so, creditors would have the input of the Commission prior to the expiration of
the period to vote on the Plan.
B. Enron and its Subsidiaries
Enron is a public utility holding company within the meaning of the
Act by reason of its ownership of all of the outstanding voting securities of
Portland General, an Oregon electric public utility company.
From 1985 through mid-2001, Enron grew from a domestic natural gas
pipeline company into a large global natural gas and power company.
Headquartered in Houston, Texas, Enron and its subsidiaries historically
provided products and services related to natural gas, electricity, and
communications to wholesale and retail customers. As of December 2001, the Enron
companies employed approximately 32,000 individuals worldwide. The Enron
companies were principally engaged in (a) the marketing of natural gas,
electricity and other commodities, and related risk management and finance
services worldwide, (b) the delivery and management of energy commodities and
capabilities to end-use retail customers in the industrial and commercial
business sectors, (c) the generation, transmission, and distribution of
electricity to markets in the northwestern United States, (d) the transportation
of natural gas through pipelines to markets throughout the United States, and
(e) the development, construction, and operation of power plants, pipelines, and
other energy-related assets worldwide.
In 1997, Enron acquired Portland General, an Oregon electric public
utility company. Enron is a public utility holding company within the meaning of
the Act solely by virtue of its ownership of all of the outstanding voting
securities of Portland General. If, as proposed under the chapter 11 plan, Enron
sells the common stock of Portland General to an unaffiliated purchaser or
distributes such stock to the Debtors' creditors, upon the completion of such
transaction, Enron would deregister as a holding company and cease to be subject
to the Act as a holding company.
C. The Bankruptcy Cases and the Chapter 11 Plan
In the last quarter of 2001, the Enron companies lost access to the
capital markets, both debt and equity, and had insufficient liquidity and
financial resources to satisfy their current financial obligations. On December
2, 2001, Enron and certain of its subsidiaries each filed a voluntary petition
for relief under chapter 11 of the Bankruptcy Code. As of today, one hundred
eighty (180) Enron-related entities have filed voluntary petitions./4 Pursuant
to sections 1107 and
---------------
4 On November 29, 2001, and on various dates thereafter, certain foreign
affiliates of Enron in England went into administration. Shortly thereafter,
various other foreign affiliates also commenced (either voluntarily or
involuntarily) insolvency proceedings in Australia, Singapore, and Japan.
Additional filings have continued world-wide and insolvency proceedings for
foreign affiliates are continuing for various companies registered in Argentina,
Bahamas, Bermuda, Canada, the Cayman Islands, France, Germany, Hong Kong, India,
Italy, Mauritius, the Netherlands, Peru, Spain, Sweden, and Switzerland. Once a
foreign affiliate is placed into a foreign insolvency proceeding, control of the
foreign affiliate along with the management and distribution of its assets will
generally be transferred to an insolvency practitioner, such as an
administrator, receiver, or liquidator. The foreign bankruptcies are not
administered jointly with the proceeding in the Bankruptcy Court. Thus,
commencement of most foreign proceedings results in a loss of ultimate control
by Enron and its subsidiaries over the assets of the foreign affiliate. Where
Enron no longer has control over such companies for the reasons described above,
the companies are no longer direct or indirect Enron subsidiaries and are not
subject to the Act. However, even if there are some companies over which Enron
retains control, the Commissions' jurisdiction under section 11(f) of the Act,
if any, extends only to those bankruptcy cases brought in United States courts.
None of the foreign proceedings referenced herein relate to Portland General.
3
1108 of the Bankruptcy Code, the Debtors continue to operate their businesses
and manage their properties as debtors in possession. Portland General, Enron's
sole public utility subsidiary company, has not filed a voluntary petition under
the Bankruptcy Code and is not in bankruptcy. Likewise, many other Enron
companies that are operating companies have not filed bankruptcy petitions and
continue to operate their businesses.
The Debtors have been engaged, since the commencement of the chapter
11 cases, in the rehabilitation and disposition of their assets to satisfy the
claims of creditors. The Debtors have been consolidating, selling businesses and
assets, dissolving entities and simplifying their complex corporate structure.
The Debtors are holding cash from prior sales pending distribution under the
chapter 11 plan and are positioning other assets for sale or other
disposition./5 In this process, hundreds of corporations have been or will be
liquidated./6 The Debtors also have been involved in the settlement of numerous
contracts related to wholesale and retail trading of various commodities. In
some cases, cash resulting from these settlements also is being held pending
distribution pursuant to the chapter 11 plan.
1. The chapter 11 plan represents a compromise and settlement of
significant issues.
The Debtors have worked with the Official Committee of Unsecured
Creditors appointed in the Debtors' chapter 11 cases (the "Creditors'
Committee"), the Bankruptcy Court appointed examiner to review transactions
related to Enron North America Corp. ("ENA") and to represent the creditors of
ENA (the "ENA Examiner"),/7 and individual creditor groups to formulate a
chapter 11 plan. On July 11, 2003, the Debtors filed a joint chapter 11 plan and
a related disclosure statement, both of which were subsequently amended several
times. A hearing to consider the adequacy of the information contained in the
disclosure statement was held commencing on January 6, 2004. On January 9, 2004,
the Bankruptcy Court issued two orders approving the Disclosure Statement,
establishing voting procedures, and ordering the solicitation
---------------
5 The Debtors, non-Debtor affiliates and other related companies have completed
a number of significant asset sales during the pendency of the chapter 11 cases
resulting in gross consideration to the Debtors' bankruptcy estates, non-Debtor
affiliates, and certain other related companies aggregating approximately $3.6
billion. In many instances, proceeds from these sales are segregated, or in
escrow accounts, and the distribution of such proceeds will require either
consent of the Creditors' Committee or an order of the Bankruptcy Court.
6 On the initial petition date, the Enron group totaled approximately 2,400
legal entities. Approximately 600 entities have been sold, merged or dissolved
and approximately 1,800 legal entities remain. By the end of 2004, it is
anticipated that all legal entities will be reduced to those necessary for
Enron's operating businesses and the liquidation of assets.
7 The ENA Examiner was appointed, among other things, to serve as a plan
facilitator for ENA and its subsidiaries. The ENA Examiner has performed this
function by engaging in dialogue with the Debtors, representatives of the
Creditors' Committee, and certain parties in interest that assert claims against
ENA and its subsidiaries. The ENA Examiner has also performed his role as plan
facilitator by filing reports regarding various plan-related issues, such as
whether ENA's exclusive right to propose a plan for ENA should be preserved and
whether a joint plan involving ENA and the remaining Debtors is appropriate and
beneficial from the perspective of ENA's creditors.
4
of votes approving or rejecting the Plan./8 The Plan and related disclosure
statement are attached as Exhibits I-1 and I-2 hereto./9
Given the diverse creditor body and the myriad of complex issues posed
by the chapter 11 cases, the Debtors, the ENA Examiner and the Creditors'
Committee spent over a year engaged in analysis and negotiations regarding the
terms of what eventually became the Plan and related matters. These discussions
focused on a variety of issues, including but not limited to, (a) maximizing
value to creditors, (b) resolving issues regarding substantive consolidation and
other inter-estate and inter-creditor disputes, and (c) facilitating an orderly
and efficient distribution of value to creditors. The Plan represents the
culmination of these efforts and reflects agreements and compromises reached
among the Debtors, the ENA Examiner and the Creditors' Committee with respect to
such issues. The Creditors' Committee and the ENA Examiner fully support the
Plan, including the compromises and settlements embodied therein, and the
members of the Creditors' Committee have unanimously recommended that creditors
vote to accept the Plan. Likewise, the ENA Examiner has included a letter in the
solicitation materials accompanying the Plan endorsing the Plan and urging
parties to support confirmation thereof.
The Plan incorporates various inter-Debtor, Debtor-Creditor and
inter-Creditor settlements and compromises designed to achieve a global
resolution of these chapter 11 cases. Thus, the Plan is premised upon a
settlement, rather than litigation, of these disputes. The Plan, however, does
provide for a litigation trust or similar vehicle to pursue avoidance and other
types of claims against numerous financial institutions and other entities that
are creditors of the estates. The settlements and compromises embodied in the
Plan represent, in effect, a linked series of concessions by Creditors of every
individual Debtor in favor of each other. The agreements are interdependent.
To reach the global compromise,/10 the Debtors and the Creditors'
Committee considered, among other things, the most significant inter-estate
disputes (including, without limitation, certain issues between Enron and ENA),
the issue of substantive consolidation, and the cost and delay that would be
occasioned by full-blown estate-wide litigation of such issues. In proposing the
Plan, the Debtors have offered a non-litigation solution to Creditors. This
solution, which the Debtors and the Creditors' Committee agree fairly reflects
the risks of litigation, will reduce the duration of these chapter 11 cases and
the expenses attendant to protracted disputes. While a litigated outcome of each
of these issues might differ from the result produced by the Plan itself, the
Debtors and the Creditors' Committee have stated that, if the issues resolved by
the Plan were litigated to conclusion, these chapter 11 cases would be prolonged
for, at a minimum, an additional year, and probably much longer./11 There are
several components of the global compromise, including, but not limited to, (i)
settlement of the issue of
---------------
8 See Disclosure Statement Orders, Exhibits J-1 and J-2.
9 The Plan, disclosure statement and other documents related to the chapter 11
cases are also available at www.enron.com. Unless defined in the text of this
Application, all capitalized terms used herein follow the definitions specified
in the Plan.
10 The description of the global compromise is qualified in its entirety by the
full text of the Plan.
11 Professional fees incurred in these chapter 11 cases, even without such
estate-wide litigation, have been approximately $330 million per year. Other
costs of administering the estates and the opportunity cost incurred by
creditors that cannot immediately redeploy their recovery from the bankruptcy in
other productive ways also are consequences of any delay in resolving the
chapter 11 cases.
5
substantive consolidation of the Debtors' estates, (ii) the use of a common
currency (referred to as Plan Currency) to make distributions under the Plan,
(iii) the treatment of Intercompany Claims and resolution of other inter-estate
issues, (iv) the resolution of certain asset ownership disputes between Enron
and ENA, (v) the resolution of interstate issues regarding rights to certain
claims and causes of action, (vi) the treatment of Allowed Guaranty Claims, and
(vii) a reduction in the administrative costs post-confirmation. Each of these
components is discussed in detail in the Plan and disclosure statement.
2. Property to be Distributed Under the Plan
The Plan is premised upon the distribution of all of the value of the
Debtors' assets (through Creditor Cash, Plan Securities and, to the extent such
trusts are created, interests in the Remaining Asset Trusts, Operating Trusts,
Litigation Trust and the Special Litigation Trust) in accordance with the
priority scheme contained in the Bankruptcy Code. It is anticipated that
Creditor Cash will constitute approximately two-thirds of the Plan Currency./12
Excluding the potential value of interests in the Litigation Trust and Special
Litigation Trust, the Debtors estimate that the value of total recoveries will
be approximately $12 billion.
In an effort to maximize the value to Creditors, since the Initial
Petition Date, the Debtors have conducted extensive due diligence and sales
efforts for substantially all of the Enron companies' core domestic and
international assets, including, but not limited to, exploring the sale of the
Enron companies' interests in Portland General, Transwestern, Citrus, Northern
Plains, Elektro, Cuiaba, BBPL, Transredes, Sithe, EcoElectrica, Mariner,
Compagnie Papiers and Trakya. Following an extensive marketing and auction
process, the Enron companies received bids or other indications of interest on
most of the businesses named above. These bids and other indications of interest
have been considered and evaluated by the Enron companies, taking into
consideration the potential long-term value and benefits of retaining certain
groupings of assets and developing such assets for future value versus the
potential for selling such interests in the near term based on the bids and
indications of interest received. In those instances where an immediate sale
maximized the value of the interest, the assets were sold or are the subject of
pending sales. As examples, these include Sithe, EcoElectrica and CPS. Following
consultation with the Creditors' Committee, in those instances where the
long-term prospects are anticipated to ultimately derive greater value, the
assets were retained and will be included either (a) in one of the Operating
Entities (i.e., Prisma, CrossCountry and Portland General) with the stock or
other equity of such Operating Entities to be distributed to Creditors pursuant
to the Plan or (b) sold at a later date. The Debtors continue to explore all
opportunities to maximize value to Creditors, including continuing to consider a
sale of one or more of the Operating Entities.
As discussed in greater detail in the Plan, when and to the extent
that an interest in any of these businesses or related businesses is sold, then
the resulting net sale proceeds held by a Debtor will be distributed to
Creditors in the form of Creditor Cash. To the extent that Portland General,
CrossCountry and Prisma have not been sold as of the Initial Distribution Date,
then the value in these Operating Entities will be distributed to Creditors in
the form of Plan Securities free and clear of all liens, claims, interests and
encumbrances.
---------------
12 In the event that the Portland General sale transaction is consummated, such
percentage shall increase.
6
The Plan does not provide for Enron to survive in the long-term as an
ongoing entity with any material operating businesses. Enron's role as a
Reorganized Debtor will be to hold and sell assets and manage the litigation of
the estates pending the final conclusion of the chapter 11 cases. While it is
expected that it may take several years to conclude the extensive litigation in
which the Debtors' estates are involved, the divestiture of the stock of the
Operating Entities (including Portland General), through sale, divestiture
directly to creditors, or through a liquidating trust will commence soon after
the Plan is confirmed. Specifically, Section 32.1(c) of the Plan provides that,
commencing on or as soon as practicable after the Effective Date, the stock of
the Operating Entities shall be distributed to holders of specified claims upon
(a) allowance of General Unsecured Claims in an amount which would result in the
distribution of 30% of the issued and outstanding shares of the Operating
Entities' stock and (b) obtaining the requisite consents for the issuance of the
Operating Entities' stock. While the Debtors hope that such 30% threshold is
reached prior to December 31, 2004, due to the vagaries of litigation, there can
be no assurance. In the event that it is not, the stock of the Operating
Entities shall be placed in the Operating Trusts on or before December 31, 2004.
D. Key Elements of the Plan
1. The Sale or Distribution of Portland General
Portland General, incorporated in 1930, is a single, integrated
electric utility engaged in the generation, purchase, transmission,
distribution, and retail sale of electricity in Oregon. Portland General also
sells wholesale electric energy to utilities, brokers, and power marketers
located throughout the western United States. On July 2, 1997, Portland General
Corporation, the former parent of Portland General, merged with Enron, with
Enron continuing in existence as the surviving corporation, and Portland General
operating as a wholly owned subsidiary of Enron. Portland General is not a
Debtor in the chapter 11 cases. Portland General is a reporting company under
the Securities Exchange Act of 1934 and it files annual, quarterly and periodic
reports with the Commission. Portland General is regulated by the Oregon Public
Utility Commission ("OPUC") with regard to its rates, terms of service,
financings, affiliate transactions and other aspects of its business. The
company is also regulated by the Federal Energy Regulatory Commission ("FERC")
with respect to its activities in the interstate wholesale power markets. As of
and for the nine months ended September 30, 2003, Portland General and its
subsidiaries on a consolidated basis had operating revenues of $1,375 million,
net income of $30 million, retained earnings of $517 million, and assets of
$3,185 million. Portland General is extensively insulated from Enron as a result
of conditions imposed at the time of the merger of Enron and Portland General
Corporation and other provisions under Oregon law.
In addition, in an effort to preserve Portland General's investment
grade credit rating, a bankruptcy remote structure was created that requires the
affirmative vote of an independent shareholder who holds a share of limited
voting junior preferred stock of Portland General before Portland General can be
placed into bankruptcy unilaterally by Enron, except in certain carefully
7
prescribed circumstances in which the reason for the bankruptcy is to implement
a transaction pursuant to which all of Portland General's debt will be paid or
assumed without impairment./13
a. Sale of Portland General
Enron recently announced an agreement to sell the common stock of
Portland General to Oregon Electric Utility Company, LLC ("Oregon Electric"), a
newly-formed entity financially backed by investment funds managed by the Texas
Pacific Group, a private equity firm. Texas Pacific Group has significant
experience working in regulated industries including airlines, financial
services and healthcare. Since its founding in 1993, Texas Pacific Group has
invested in more than 50 companies, of which it continues to own more than 30.
These companies have combined revenues of more than $32 billion and employ more
than 225,000 employees./14
The transaction is valued at approximately $2.35 billion, including
the assumption of debt./15 The sale is subject to the receipt of Bankruptcy
Court, OPUC and certain other regulatory authorizations and closing is currently
anticipated to occur in the second half of 2004. The transaction is described in
detail in Exhibits B-1 and B-2. On December 5, 2003, the Bankruptcy Court issued
a bidding procedures order specifying January 28, 2004 as the last date on which
competing prospective buyers may submit bids to acquire Portland General./16
Under the purchase agreement, Enron is permitted to accept a bid that represents
a "higher or better" offer for Portland General. No qualifying bid was received
prior to the January 28, 2004 deadline.
b. Distribution of Portland General Shares
If Portland General has not been sold, is no longer the subject of the
purchase agreement described above and is not the subject of another purchase
agreement, then, Enron will cause Portland General to distribute Portland
General's shares to creditors and equity holders pursuant to the Plan.17 In
preparation for the distribution of Portland General under the Plan, upon
receipt of all appropriate regulatory approvals, Enron may transfer its
ownership interest in Portland General to PGE Trust, a to-be-formed entity. If
formed, PGE Trust would
---------------
13 The Services and Indemnity Agreement among GSS Holdings II, Inc. Global
Securitization Services, LLC and Portland General Electric Company, dated
September 30, 2002, the share certificate, and the OPUC orders approving the
issuance of the share, are annexed hereto as Exhibit S-1 and S-2.
14 Enron Corp. Press Release dated November 18, 2003.
15 Pursuant to the Purchase and Sale Agreement, annexed hereto as Exhibit B-2,
the purchase price for the common stock of Portland General shall be a cash
amount equal to (a) $1,250,000,000, subject to a purchase price adjustment based
on the difference between Portland General's shareholders' equity and retained
earnings at the closing date of the transaction and $1,129,422,925 (Portland
General's shareholders' equity and retained earnings at December 31, 2002), plus
(b) up to $10.4 million in cash based on a sharing mechanism for indemnity items
settled between signing and closing of the transaction. Of the cash purchase
price (subject to reduction for certain pre-closing settlement of certain
specified liabilities), $94,000,000 will be placed in an escrow account at the
closing and available to satisfy indemnification obligations of Enron under the
agreement.
16 Docket No. 14665, In re Enron Corp., et al., Chapter 11 Case No. 01-16034
(AJG), Dec. 5, 2003 (U.S. Bankruptcy Court, S.D.N.Y.).
17 Section 32.1(c) of the Plan provides that, commencing on or as soon as
practicable after the Effective Date, the Portland General common stock shall be
distributed to holders of specified claims upon (a) allowance of General
Unsecured Claims in an amount which would result in the distribution of 30% of
the issued and outstanding shares of Portland General common stock and (b)
obtaining the requisite consents for the issuance of the Portland General common
stock.
8
hold Enron's interest in Portland General as a liquidating vehicle, for the
purpose of distributing, directly or indirectly, the shares of Portland General
(or the proceeds of a sale of Portland General) to the Debtor's creditors and
equity holders as required by the Plan. It is possible that PGE Trust also would
hold Enron's interest in Portland General for the purposes of consummating the
sale of Portland General to Oregon Electric.
Specifically, the Plan provides that the Debtors and the Creditors'
Committee would jointly determine whether the Portland General common stock
should be distributed to creditors directly by Enron or through an Entity/18
(the PGE Trust/19) to be created on or subsequent to the Confirmation Date to
hold the Portland General common stock./20 If formed, the PGE Trust, will be
managed under an agreement, the PGE Trust Agreement, which must be in form and
substance satisfactory to the Creditors' Committee.
The PGE Trust Agreement will provide for the management of the PGE
Trust by the PGE Trustee who shall manage, administer, operate and liquidate the
assets contained in the PGE Trust and distribute the proceeds thereof or the
Portland General common stock./21 As currently contemplated, the PGE Trustee
would be Stephen Forbes Cooper, LLC (an entity headed by Stephen Forbes Cooper
and more fully described below), or such other Entity appointed by the PGE Trust
Board and approved by the Bankruptcy Court to administer the PGE Trust in
accordance with the provisions of the PGE Trust Agreement and Article XXIV of
the Plan./22 The PGE Trust Board would be selected by the Debtors, after
consultation with the Creditors' Committee, and appointed by the Bankruptcy
Court, or any replacements thereafter selected in accordance with the PGE Trust
Agreement. If the PGE Trust is not formed, SFC, as Administrator, would oversee
the management, administration and operation of Portland General (and the
Debtors' other assets) until it is sold or the Portland General common stock is
distributed to creditors under the Plan.
The Plan describes the purpose of the PGE Trust and the trusts that
may be established in connection with the distribution of Prisma and
CrossCountry (collectively, the "Operating Trusts"). The Plan also describes the
proposed management of the trusts./23 The Plan provides
---------------
18 Section 1.130 of the Plan provides that an "Entity" refers to a person,
corporation, general partnership, limited partnership, limited liability
company, limited liability partnership, association, joint stock company, joint
venture, estate, trust, unincorporated organization, governmental unit, or any
subdivision thereof, including, without limitation, the Office of the United
States Trustee, or any other entity.
19 Plan Section 1.187.
20 Enron expects that the PGE Trust would be formed if, upon the Effective Date,
sufficient General Unsecured Claims have not been allowed such that at least 30%
of the Portland General common stock may be distributed.
21 Portland General currently has 42,758,877 shares of common stock, par value
of $3.75 per share, all of which are held by Enron. Upon satisfaction of the
conditions for the distribution of Portland General to the creditors under the
Plan, the existing Portland General common stock held by Enron will be cancelled
and new Portland General common stock will be issued. The shares of Portland
General to be issued under the Plan will have no par value, of which 80,000,000
shares shall be authorized and of which 62,500,000 shares shall be issued under
the Plan. The preferred stock of Portland General will remain outstanding.
22 Article XXIV of the Plan describes the establishment, purpose and operating
parameters of the Operating Trusts, which include the PGE Trust, the Prisma
Trust and the CrossCountry Trust.
23 The Operating Trusts would be established on behalf of the Debtors and the
holders of allowed claims in certain specified classes. The Operating Trusts
would be formed by the execution of the respective Operating Trust Agreements as
soon as is practical after the receipt of all appropriate or required
governmental, agency or other consents authorizing the transfer of the
respective assets to the Operating Trusts. See Plan Section 24.1. With respect
to the PGE Trust, the authorization of the Oregon Public Utility Commission
("OPUC") and the Federal Energy Regulatory Commission ("FERC") may be required
prior to the contribution of the common stock of Portland General into the PGE
Trust and the distribution of such stock to the creditors.
9
that the "Operating Trusts shall be established for the sole purpose of holding
and liquidating the respective assets in the Prisma Trust, the CrossCountry
Trust and the PGE Trust in accordance with Treasury Regulation Section
301.7701-4(d) and the terms and provisions of the Operating Trust
Agreements."/24 The referenced Treasury regulation provides:
Certain organizations which are commonly known as liquidating
trusts are treated as trusts for purposes of the Internal Revenue
Code. An organization will be considered a liquidating trust if
it is organized for the primary purpose of liquidating and
distributing the assets transferred to it, and if its activities
are all reasonably necessary to, and consistent with, the
accomplishment of that purpose. A liquidating trust is treated as
a trust for purposes of the Internal Revenue Code because it is
formed with the objective of liquidating particular assets and
not as an organization having as its purpose the carrying on of a
profit-making business which normally would be conducted through
business organizations classified as corporations or
partnerships. However, if the liquidation is unreasonably
prolonged or if the liquidation purpose becomes so obscured by
business activities that the declared purpose of liquidation can
be said to be lost or abandoned, the status of the organization
will no longer be that of a liquidating trust.
For all federal income tax purposes, all parties (including the Debtors, the
Operating Trustee, and the beneficiaries of the Operating Trusts) must treat the
transfer of assets to the respective Operating Trusts as a transfer to the
holders of certain allowed claims, followed by a transfer by such holders to the
respective Operating Trusts. The beneficiaries of the Operating Trusts are
treated as the grantors thereof. Consistent with this view, under the Operating
Trust Agreements, on the Effective Date the Debtors will have no obligation to
provide any funding with respect to any of the Operating Trusts.
The rights of the Operating Trustees to invest assets transferred to
the Operating Trusts, the proceeds thereof, or any income earned by the
respective Operating Trusts, will be limited to the right and power to invest
such assets (pending periodic distributions) in cash equivalents. The Operating
Trustees must distribute at least annually to the holders of the respective
Operating Trust Interests all net cash income plus all net cash proceeds from
the liquidation of assets, but the Operating Trustees may retain amounts
necessary to satisfy liabilities and to maintain the value of the assets of the
Operating Trusts during liquidation and to pay reasonable administrative
expenses. The Operating Trusts must terminate no later than the third
anniversary of the Confirmation Date, provided, however, that the Bankruptcy
Court may extend the term of the Operating Trusts for additional periods not to
exceed three years in the aggregate if it is necessary to liquidate the assets
of the Operating Trusts.
---------------
24 Plan Section 24.2.
10
The IRS has stated that an organization created under chapter 11 of
the Bankruptcy Code to be a liquidating trust will be characterized as a
liquidating trust if it meets certain requirements. In particular, the IRS
requires the trustee of a liquidating trust to commit to make continuing efforts
to dispose of the trust assets, make timely distributions, and not unduly
prolong the duration of the trust. These requirements are all incorporated into
the Plan./25
2. Formation of Prisma and CrossCountry and the Disposition of
the Debtors' Other Assets, Generally
In addition to the divestiture of Portland General, other key aspects
of the Plan include the formation of holding companies, Prisma Energy
International Inc. ("Prisma") and CrossCountry Energy Corp. ("CrossCountry")./26
Prisma is a Cayman Islands entity formed initially as a holding company pending
the transfer of certain international energy infrastructure businesses that are
indirectly owned by Enron and certain of its affiliates. CrossCountry is a
Delaware corporation that would hold Enron's pipeline businesses, which provide
natural gas transportation services through an extensive North American pipeline
infrastructure. As part of the Plan, creditors would receive shares of Prisma
and CrossCountry, interests in a trust or other entity formed to distribute
these assets, or cash proceeds of the sale of Prisma or CrossCountry. The Plan
also makes provision for the distribution of other assets of the Debtors'
estate, including in excess of $6 billion in cash, the proceeds of the
liquidation or divestiture of businesses that do not fit into Prisma and
CrossCountry, and the value of certain claims that Enron is pursuing against
various professional service firms and financial institutions such as commercial
and investment banks. Additional detail with respect to Prisma and CrossCountry
is provided below:
a. Prisma
Prisma, a Cayman Islands limited liability company, was organized on
June 24, 2003 for the purpose of acquiring the Prisma Assets, which include
equity interests in the identified businesses, intercompany loans to the
businesses held by affiliates of Enron, and contractual rights held by
affiliates of Enron. Enron and its affiliates will contribute the Prisma Assets
to Prisma in exchange for shares of Prisma Common Stock commensurate with the
value of the Prisma Assets contributed.
The contribution of the Prisma Assets is expected to be effected
pursuant to the Prisma Contribution and Separation Agreement to be entered into
among Prisma and Enron and several of its affiliates. It is anticipated that the
Prisma Contribution and Separation Agreement, which is currently being
negotiated, will be submitted for Bankruptcy Court approval either as part of
the Plan Supplement or by a separate motion.
Prisma and Enron and its affiliates also expect to enter into certain
ancillary agreements, which may include a new Transition Services Agreement, a
tax allocation agreement ("Prisma Tax Allocation Agreement") and a Cross License
Agreement. The employees of Enron
---------------
25 See generally, Plan Article XXIV. See also, Rev. Proc. 94-45, 1994-2 CB 684,
amplifying and modifying Rev. Proc. 82-58, 1982-2 CB 847, and Rev. Proc. 91-15,
1991-1 CB 484.
26 Of the approximately 1,800 entities in the Enron group of currently,
approximately 82 entities would become part of Prisma and 15 would be
contributed to CrossCountry. The remaining entities would be sold or liquidated
in accordance with the Plan.
11
and its affiliates who have been supervising and managing the Prisma Assets
since December 2001, became employees of a subsidiary of Prisma effective on or
about July 31, 2003. In connection therewith, as approved by the Bankruptcy
Court,/27 Enron and its affiliates entered into four separate Transition
Services Agreements pursuant to which such employees will continue to supervise
and manage the Prisma Assets and other international assets and interests owned
or operated by Enron and its affiliates. The ancillary agreements, together with
the Prisma Contribution and Separation Agreement, will govern the relationship
between Prisma and Enron and its affiliates subsequent to the contribution of
the Prisma Assets, provide for the performance of certain interim services, and
define other rights and obligations until the distribution of shares of capital
stock of Prisma pursuant to the Plan or the sale of the stock to a third party.
In addition, the Prisma Contribution and Separation Agreement or the ancillary
agreements are expected to set forth certain shareholder protection provisions
with respect to Prisma and may contain indemnification obligations of the Prisma
Enron Parties.
No operating businesses or assets have been transferred to Prisma at
this time; however, subject to obtaining requisite consents, the Debtors intend
to transfer the businesses described above to Prisma either in connection with
the Plan or at such earlier date as may be determined by Enron and approved by
the Bankruptcy Court.
Prisma will be engaged in the generation and distribution of
electricity, the transportation and distribution of natural gas and liquefied
petroleum gas, and the processing of natural gas liquids. If all businesses are
transferred to Prisma as contemplated, Prisma will own interests in businesses
whose assets will:
o Include over 9,600 miles of natural gas transmission and
distribution pipelines;
o Include over 56,000 miles of electric transmission and
distribution lines;
o Include over 2,100 MW of electric generating capacity;
o Serve 6.5 million LPG, gas, and electricity customers;
o Be located in 14 countries; and
o Employ over 7,900 people.
It is contemplated that the operating businesses contributed to Prisma
would be engaged in the businesses described above and businesses related or
incidental thereto. Applicants do not expect that any significant non-energy
related business would be made a part of Prisma.
Prisma will be an energy infrastructure company providing energy
generation, transportation, processing, and distribution services. By
concentrating on its core competencies of owning and operating energy
infrastructure assets in diverse international locations, Prisma
---------------
27 Docket No. 11915, In re Enron Corp., et al., Chapter 11 Case No. 01-16034
(AJG), July 24, 2003 (U.S. Bankruptcy Court, S.D.N.Y.); Docket No. 13710, In re
Enron Corp., et al., Chapter 11 Case No. 01-16034 (AJG), Oct. 24, 2003 (U.S.
Bankruptcy Court, S.D.N.Y.).
12
intends to focus on being a low-cost, efficient operator in the markets it
serves. Prisma's anticipated objective is to generate stable cash flow, earnings
per share, and dividends, and to grow each of these through growth projected
within the existing portfolio of businesses. The corporate affairs of Prisma
will be governed by its memorandum and articles of association, amended and
restated versions of which will accompany the Prisma Contribution and Separation
Agreement, and by the laws of the Cayman Islands.
In addition to Bankruptcy Court approval, the transfer of the
businesses described above to Prisma will require the consent of other parties,
including, but not limited to, governmental authorities in various
jurisdictions. If any such consents are not obtained, then at the discretion of
Enron, with the consent of the Creditors' Committee, as contemplated in the
Plan, one or more of these businesses may not be transferred to Prisma, but
instead will remain directly or indirectly with Enron.
Applicants intend that Prisma will certify as a foreign utility
company ("FUCO") under Section 33 under the Act prior to the transfer of the
businesses described above to Prisma. The transfer of such businesses to Prisma
in exchange for interests in Prisma would generally be exempt under Section
33(c)(1) of the Act. Nevertheless, certain indemnification agreements between
Enron group/28 companies in connection with the contribution of the Prisma
Assets would constitute the extension of credit among associate companies and
would require Commission authorization under Section 12(b) of the Act and Rule
45(a) thereunder. In addition, the Prisma Tax Allocation Agreement to be entered
into among Prisma, Enron and certain Enron affiliates, is expected to require
Prisma to be obligated to make dividend distributions to its shareholders in
certain minimum amounts (to the extent of available cash) so long as Enron or
any affiliate or the Disputed Claims reserve is required to include amounts in
income for federal income tax purposes in respect of the ownership of Prisma
shares. In the Omnibus Application, Applicants requested authorization to enter
into indemnification agreements and the Tax Allocation Agreement in connection
with the formation of Prisma as authorized by the Bankruptcy Court and as
described above. In addition, Prisma will seek to avail itself of any other
authorizations granted to Enron's subsidiaries in connection with the Omnibus
Application such as authorizations relating to dividends and reorganizations.
b. CrossCountry
CrossCountry was incorporated in the State of Delaware on May 22,
2003. On June 24, 2003, CrossCountry and the CrossCountry Enron Parties entered
into the original CrossCountry Contribution and Separation Agreement providing
for the contribution of Enron's direct and indirect interests in its interstate
pipelines and other related assets to CrossCountry. On September 25, 2003, the
Bankruptcy Court issued an order approving the transfer of the pipeline
interests and the related assets from the CrossCountry Enron Parties to
CrossCountry and other related transactions, pursuant to the original
CrossCountry Contribution and Separation Agreement. That order contemplates that
the parties may make certain modifications to the original Contribution and
Separation Agreement. The parties are negotiating an Amended and Restated
Contribution and Separation Agreement that incorporates certain changes to the
original Contribution and Separation Agreement including the substitution of
CrossCountry Energy LLC
---------------
28 "Enron group" includes all of Enron's subsidiaries, whether or not they are
Debtors.
13
("CrossCountry LLC") in place of CrossCountry as the holding company owning the
pipeline interests./29
Pursuant to the Amended and Restated Contribution and Separation
Agreement, Enron and certain of its affiliates would contribute their ownership
interests in certain gas transmission pipeline businesses and certain
non-utility service companies to CrossCountry LLC in exchange for equity
interests in CrossCountry LLC. The closing of the transactions contemplated by
the Amended and Restated Contribution and Separation Agreement is expected to
occur as soon as possible. It is anticipated that, following confirmation of the
Plan and prior to the CrossCountry Distribution Date, the equity interests in
CrossCountry LLC will be exchanged for equity interests in CrossCountry
Distributing Company in the CrossCountry Transaction. As a result of the
CrossCountry Transaction, CrossCountry Distributing Company will obtain direct
or indirect ownership in the Pipeline Businesses and certain services companies
described below. CrossCountry LLC's principal assets will, upon closing of the
formation transactions, consist of the following:
o A 100% indirect ownership interest in Transwestern Holdings
Company, Inc. ("Transwestern"), which, through its
subsidiary Transwestern Pipeline Company, owns an
approximately 2,600-mile interstate natural gas pipeline
system that transports natural gas from western Texas,
Oklahoma, eastern New Mexico, the San Juan basin in
northwestern New Mexico and southern Colorado to California,
Arizona, and Texas markets. Transwestern's net income for
the year ended December 31, 2002 was $20.7 million.
o A 50% ownership interest in Citrus Corp. ("Citrus"), a
holding company that owns, among other businesses, Florida
Gas Transmission Company ("FGT"), a company with an
approximately 5,000-mile natural gas pipeline system that
extends from South Texas to South Florida. An affiliate of
CrossCountry operates Citrus and certain of its
subsidiaries. Citrus's net income for the year ended
December 31, 2002 was $96.6 million, 50% of which, or $48.3
million, comprised Enron's equity earnings. CrossCountry LLC
is expected to hold its interest in Citrus through its
wholly owned subsidiary, CrossCountry Citrus Corp.
o A 100% interest in Northern Plains Natural Gas Company
("Northern Plains"), which directly or through its
subsidiaries holds 1.65% out of an aggregate 2%
general-partner interest and a 1.06% limited-partner
interest in Northern Border Partners, L.P. ("Northern
Border") a publicly traded limited partnership (NYSE: NBP),
that is a leading transporter of natural gas imported from
Canada to the Midwestern United States. Pursuant to
operating agreements, Northern Plains operates Northern
Border's interstate pipeline systems, including Northern
Border Pipeline, Midwestern, and Viking. Northern Border
also has (i) extensive gas gathering operations in the
Powder River Basin in Wyoming, (ii) natural gas gathering,
processing and fractionation operations in the Williston
Basin in Montana and North
---------------
29 Docket No. 13381, In re Enron Corp., et al., Chapter 11 Case No. 01-16034
(AJG), Oct. 8, 2003 (U.S. Bankruptcy Court, S.D.N.Y.); Docket No. 14560, In re
Enron Corp., et al., Chapter 11 Case No. 01-16034 (AJG), Dec. 1, 2003 (U.S.
Bankruptcy Court, S.D.N.Y.).
14
Dakota, and the western Canadian sedimentary basin in
Alberta, Canada, and (iii) ownership of the only coal slurry
pipeline in operation in the United States. Northern
Border's net income for the year ended December 31, 2002 was
$113.7 million, of which $9.1 million comprised Enron's
equity earnings.
These companies have a history of expanding their pipeline systems to
meet growth in market demand and to increase customers' access to additional
natural gas supplies. These expansions not only provide the individual
interstate pipeline businesses with additional net income and cash flow, but
also are important factors in maintaining and enhancing their market positions.
Historically, the interstate pipeline businesses have undertaken expansions when
they are backed by long-term firm contract commitments. In addition, the
pipelines have historically made acquisitions to meet market growth and gain
access to gas supplies.
It is expected that the contribution of the interests in the gas
pipeline businesses to CrossCountry LLC under the Amended and Restated
Contribution and Separation Agreement, in exchange for equity interests in
CrossCountry LLC, would be exempt capital contributions under Rule 45(b)(4)
under the Act. Agreements among companies in the Enron group to indemnify other
Enron group companies in connection with the contribution of these businesses
and the financing of the CrossCountry entities would, however, constitute
extensions of credit among associate companies under Section 12(b) of the Act
and Rule 45(a) thereunder. Intercompany indemnifications are necessary to
implement the goal of having all of the pipeline related assets and liabilities
at CrossCountry and all of the non-pipeline related assets and liabilities in
other entities.
In addition, the Amended and Restated Contribution and Separation
Agreement contemplates that a tax allocation agreement ("CrossCountry Tax
Allocation Agreement") would be entered into among CrossCountry and its
subsidiaries and Enron. The CrossCountry Tax Allocation Agreement would comply
with the requirements of Rule 45(c) under the Act in all material respects,
except that it would permit Enron to receive payment from the subsidiaries
filing jointly with Enron for the value of any net operating losses of other tax
attributes that resulted in a reduction in the consolidated tax, ratably with
any other Enron subsidiary also contributing such tax benefits to the
consolidated tax group. In the Omnibus Application, Applicants request
authorization to enter into the CrossCountry transaction consistent with the
authorization granted by the Bankruptcy Court and with the terms and conditions
of the Amended and Restated Contribution and Separation Agreement, including,
but not limited to, the indemnification agreements, the Tax Allocation
Agreement, and related financing transactions in connection with the formation
of CrossCountry as authorized by the Bankruptcy Court and as described above.
c. Other Assets and Claims
Pursuant to the Plan, any Remaining Assets not converted to Cash as of
the Effective Date will continue to be liquidated for distribution to holders of
Allowed Claims in the form of Creditor Cash. In the event that the Debtors and
the Creditors' Committee jointly determine to create the Remaining Asset Trusts
on or prior to the date on which the Litigation Trust is created, interests in
the Remaining Asset Trusts will be deemed to be allocated to holders of Allowed
15
Claims at the then estimated value of Remaining Assets. The allocation of
Remaining Asset Trust Interests will form part of the Plan Currency in lieu of
Creditor Cash and Creditors holding Allowed Claims will receive distributions on
account of such interests in Cash as and when Remaining Assets are realized
upon.
The Plan provides for holders of Allowed Unsecured Claims against
Enron (which includes Allowed Guaranty Claims and Allowed Intercompany Claims)
to share the proceeds, if any, from numerous potential causes of action. To the
extent that the Litigation Trust and Special Litigation Trust are implemented,
these causes of action shall be deemed transferred to Creditors on account of
their Allowed Claims, and then be deemed to have contributed such causes of
actions to either the Litigation Trust or the Special Litigation Trust in
exchange for beneficial interests in such trusts. The Debtors shall include, in
the Plan Supplement, a listing of the claims and causes of action, comprising
Litigation Trust Claims and Special Litigation Trust Claims, and which may be
transferred to and prosecuted by the Litigation Trust and the Special Litigation
Trust.
Upon the Effective Date, holders of Allowed Enron Preferred Equity
Interests and Allowed Enron Common Equity Interests will receive in exchange for
such interests Preferred Equity Trust Interests and Common Equity Trust
Interests, respectively. The Preferred Equity Trust and Common Equity Trust will
hold the Exchanged Enron Preferred Stock and Exchanged Enron Common Stock,
respectively. Holders of the Preferred Equity Trust Interests and Common Equity
Trust Interests will have the contingent right to receive cash distributions in
the very unlikely event that the value of the Debtors' assets exceeds the
Allowed Claims, but in no event will the Exchanged Enron Preferred Stock and
Exchanged Enron Common Stock be distributed to such holders. The Preferred
Equity Trust Interests and Common Equity Trust Interests will be uncertificated
and non-transferable, except through the laws of descent or distribution.
E. Treatment of Claims
The Plan generally classifies the creditors of, and other investors
in, the Applicants into several classes. The treatment of each class of
creditors is described in detail in the Plan and in the Disclosure Statement.
The list below illustrates the descending order of priority of the distributions
to be made under the Plan. In accordance with the Bankruptcy Code, distributions
are made based on this order of priority such that, absent consent, holders of
Allowed Claims or Equity Interests in a given Class must be paid in full before
a distribution is made to a more junior Class. Notably, Applicants continue to
believe that existing Enron common stock and preferred stock has no value.
However, the Plan provides Enron stockholders with a contingent right to receive
a recovery in the event that the total amount of Enron's assets, including
recoveries in association with litigation and the subordination, waiver or
disallowance of Claims in connection therewith, exceeds the total amount of
Allowed Claims against Enron. No distributions will be made to holders of equity
interests unless and until all unsecured claims are fully satisfied.
o Secured Claims
o Priority Claims
16
o Unsecured and Convenience Claims
o Section 510 Senior Note Claims and Enron Subordinated Debenture
Claims
o Penalty Claims and other Subordinated Claims
o Section 510 Enron Preferred Equity Interest Claims
o Enron Preferred Equity Interests
o Section 510 Enron Common Equity Interests and Enron Common Equity
Interests
In addition to the distributions on pre-petition Claims described
above, the Plan provides for payment of Allowed Administrative Expense Claims in
full. The Plan further provides that Administrative Expense Claims may be fixed
either before or after the Effective Date.
F. The Creditor Solicitation and Confirmation of the Plan
In accordance with the Disclosure Statement Orders, on or before
February 3, 2004, the Debtors mailed approximately 37,000 solicitation packages
to creditors holding claims entitled to vote on the Plan./30 Each solicitation
package includes a notice of the confirmation hearing, voting instructions, a
ballot, letters of support from the Creditors' Committee and the ENA Examiner,
and a CD-ROM containing the Disclosure Statement (including the Plan as an
exhibit thereto). Additional solicitation packages may be mailed if disputed
claims are temporarily allowed for voting purposes. Moreover, the Debtors have
entered into stipulations with the applicable fiduciary (typically an indenture
trustee, trustee or agent bank) on ten of the prepetition financing transactions
and related transactions regarding solicitation procedures on disputed claims
asserted by such fiduciaries. If these stipulations are approved, then
additional solicitation packages may be mailed to each fiduciary's
constituency./31 For all parties, the deadline for submission of ballots and
objections to confirmation is March 24, 2004, provided, however, that, in those
instances where there are multiple tiers to the balloting process, the
underlying beneficial holders may be required to submit their ballots in advance
to allow sufficient time for tabulation and submission of a master ballot.
In addition to the mailing of solicitation packages, on or before
February 3, 2004, the Debtors mailed notices of nonvoting status and notice of
the confirmation hearing to approximately 4,500 unimpaired creditors, 65,000
parties to executory contracts that have neither been assumed nor rejected at
this time, 6,000 impaired creditors, and 397,000 preferred, common
---------------
30 In many instances, the Solicitation Packages included multiple Ballots. In
the aggregate, approximately 63,000 Ballots were mailed. It should be noted that
this number does not include Solicitation Packages or Ballots for disputed
claims.
31 While the Debtors reserve their right to oppose temporary allowance of any
and all of the disputed claims, if all such claims were temporarily allowed for
voting purposes and the pending fiduciary stipulations are approved, then the
Debtors estimate that they would mail an additional 5,000 - 10,000 Ballots and
Solicitation Packages.
17
and other equity holders. March 24, 2004 is also the deadline for these parties
to object to confirmation.
Over and above these mailings, the Plan, Disclosure Statement and the
Disclosure Orders are available, free of charge, by accessing
enron.com/corp/por. This website also includes thousands of pages of documents
referred to in or related to the Disclosure Statement (including, but not
limited to, each of the reports of the Enron Examiner and various SEC filings
made by Enron, Portland General and Northern Border Partners). Moreover, within
one Business Day following the March 9, 2004 filing of the Plan Supplement, the
Plan Supplement will be made available via this website. The Commission's report
on the Plan would also be made available with the Plan Supplement. For those
parties in interest for whom using a CD-ROM or accessing the internet poses a
hardship, paper copies of the Disclosure Statement and Plan will be made
available.
The Bankruptcy Court has scheduled the Confirmation Hearing to
commence on April 20, 2004. The Plan may be confirmed by the Bankruptcy Court,
even if creditors vote to reject the Plan, if the court finds that the Plan
treats creditors fairly. As noted in the letter of the ENA Examiner, a copy of
which is annexed hereto as Exhibit T, the ENA Examiner has determined that the
Plan is fair and equitable. To confirm the Plan, the Bankruptcy Court must find
that (1) the Plan is feasible, (2) it is proposed in good faith, and (3) the
Plan and the proponent of the plan are in compliance with the Bankruptcy Code.
Following confirmation of the Plan by the Bankruptcy Court, the Plan
will become effective upon the satisfaction of certain conditions. Section 1.94
of the Plan specifies that the Effective Date will occur on the first business
day after the Plan is confirmed after which the conditions to the effectiveness
of the Plan have been satisfied or waived, but in no event earlier than December
31, 2004./32 The conditions to the effectiveness of the Plan, set forth in
Section 37.1, are: (i) entry of the Bankruptcy Court confirmation order; (ii)
the execution of documents and other actions necessary to implement the Plan;
(iii) the receipt of consents necessary to transfer assets to and establish
Prisma and CrossCountry (described further below), and (iv) the receipt of
consents necessary to issue the Portland General common stock under the Plan./33
Implementing the Plan will involve the Debtors making distributions to
creditors required by the Plan, reporting on the status of Plan consummation,
and applying for a final decree that closes the cases after they have been fully
administered, including, without limitation, reconciliation of claims. As such,
administration of the estates in conjunction with the Bankruptcy Court will
continue post confirmation, in the manner described above, including the
resolution of over five hundred adversary proceedings.
---------------
32 Under Section 1.94, the Debtors and the Creditors' Committee, in their joint
and absolute discretion, could designate another Effective Date that falls after
the Confirmation Date.
33 The Debtors, if jointly determined after consultation with the Creditors'
Committee, may, after obtaining the requisite approvals, (a) form one (1) or
more holding companies to hold the common stock of the Entities to be created
under the Plan and issue the common equity interest therein in lieu of the
common stock to be issued under the Plan and (b) form one (1) or more limited
liability companies or corporations in lieu of the entities to be created
hereunder and issue the membership interests therein in lieu of the common stock
to be issued under the Plan; provided, however, that no such structures shall
materially adversely affect the substance of the economic and governance
provisions contained in the Plan.
18
G. Administration of the Estates
1. Post-Confirmation Administration
As part of the global compromise under the Plan, the governance and
oversight of these chapter 11 cases will be streamlined. On the Effective Date,
a five-member board of directors of Reorganized ENE will be appointed, with four
of the directors to be designated by the Debtors after consultation with the
Creditors' Committee and one of the directors to be designated by the Debtors
after consultation with the ENA Examiner. Section 1129(a)(5) of the Bankruptcy
Code requires that, to confirm a chapter 11 plan, the plan proponent disclose
the identity and affiliations of the proposed officers and directors of the
reorganized debtors; that the appointment or continuance of such officers and
directors be consistent with the interests of creditors and equity security
holders and with public policy; and that there be disclosure of the identity and
compensation of any insiders to be retained or employed by the reorganized
debtors. 11 U.S.C. ss. 1129(a)(5). The Debtors intend to file such information
in the Plan Supplement no later than fifteen (15) days prior to the Ballot
Date./34 The terms and manner of selection of the directors of each of the other
Reorganized Debtors will be as provided in the Reorganized Debtors Certificate
of Incorporation and the Reorganized Debtors By-laws, as the same may be
amended.
The ENA Examiner will (i) cease his routine reporting duties, unless
otherwise directed by the Bankruptcy Court, and (ii) retain his status (other
than his limited investigatory role) pursuant to orders of the Bankruptcy Court
entered as of the date of the Disclosure Statement Order. Pending the Effective
Date of the Plan, the ENA Examiner will continue his current oversight and
advisory roles as set forth in prior orders of the Bankruptcy Court, subject to
the right of the Debtors, in their sole discretion, to streamline existing
internal processes, including cash management and other transaction review
committees.
Notwithstanding that the Debtors may streamline their internal
processes, the information typically provided to the ENA Examiner will continue
to be provided so as to ensure the ENA Examiner can fulfill his oversight
functions. The Creditors' Committee will be dissolved on the Effective Date,
except as provided below.
2. Post-Effective Date Administration
Upon appointment of the new board of Reorganized ENE, from and after
the Effective Date, the Creditors' Committee will continue to exist only for
limited purposes relating to the ongoing prosecution of estate litigation.
Specifically, the Creditors' Committee will continue to exist only (a) to
continue prosecuting claims or causes of action previously commenced by it on
behalf of the Debtors' estates, (b) to complete other litigation, if any, to
which the Creditors' Committee is a party as of the Effective Date (unless, in
the case of (a) or (b), the Creditors' Committee's role in such litigation is
assigned to another representative of the Debtors' estates,
---------------
34 In the event that, during the period from the Confirmation Hearing up to and
including the Effective Date, circumstances require the substitution of one (1)
or more persons selected to serve on the board of directors of Reorganized
Enron, the Debtors will file a notice thereof with the Bankruptcy Court and, for
purposes of section 1129 of the Bankruptcy Code, any such replacement person
will be deemed to have been selected and disclosed prior to the Confirmation
Hearing.
19
including the Reorganized Debtors, the Litigation Trust or the Special
Litigation Trust) and (c) to participate, with the Creditors' Committee's
professionals and the Reorganized Debtors and their professionals, on the joint
task force created with respect to the prosecution of the Litigation Trust
Claims pursuant to the terms and conditions and to the full extent agreed
between the Creditors' Committee and the Debtors as of the date of the
Disclosure Statement Order. Thus, virtually all of the decisions that will need
to be made with respect to, among other things, (i) the disposition of the
Debtors' Remaining Assets, (ii) the reconciliation of Claims and (iii) the
prosecution or settlement of numerous claims and causes of action (other than
specific litigation involving the Creditors' Committee, as set forth above),
will be made by Reorganized Enron through its agents, and the board of
Reorganized Enron appointed after consultation with the Creditors' Committee and
the ENA Examiner will oversee such administration. Applicants believe that the
foregoing post-Effective Date administration is consistent with the goals of
reducing the expenses in the chapter 11 cases and will thereby maximize
recoveries to creditors entitled to distributions under the Plan.
The Plan does provide, however, that the ENA Examiner may have a
continuing role during the post-Effective Date period. Within 20 days after the
Confirmation Date, the ENA Examiner or any creditor of ENA or its subsidiaries
will be entitled to file a motion requesting that the Bankruptcy Court define
the duties of the ENA Examiner for the period following the Effective Date. If
no such pleading is timely filed, the ENA Examiner's role will conclude on the
Effective Date. The Plan's flexibility in this regard is not intended nor will
it be deemed to create a presumption that the role or duties of the ENA Examiner
should or should not be continued after the Effective Date; provided, however,
that in no event will the ENA Examiner's scope be expanded beyond the scope
approved by orders entered as of the date of Disclosure Statement Order. In the
event that the Bankruptcy Court enters an order defining the post-Effective Date
duties of the ENA Examiner, notwithstanding the narrower scope of the Creditors'
Committee envisioned by the Plan, the Creditors' Committee will continue to
exist following the Effective Date to exercise all of its statutory rights,
powers and authority until the date the ENA Examiner's rights, powers and duties
are fully terminated pursuant to a Final Order. The Debtors and the Creditors'
Committee intend to object to the continuation of the ENA Examiner during the
post-Effective Date period.
The Plan also provides for the appointment of a Reorganized Debtor
Plan Administrator ("Administrator") on the Effective Date for the purpose of
carrying out the provisions of the Plan. Pursuant to Section 1.226 of the Plan,
the Administrator would be Stephen Forbes Cooper, LLC, an entity headed by
Stephen Forbes Cooper, Enron's Acting President, Acting Chief Executive Officer,
and Chief Restructuring Officer./35 In accordance
---------------
35 Mr. Cooper assumed this role at Enron on January 29, 2002, after Enron filed
for bankruptcy under chapter 11. Mr. Cooper is also the chairman of Kroll Zolfo
Cooper, LLC ("KZC"), and leads its Corporate Advisory and Restructuring Group.
KZC is a consulting company that provides services in corporate recovery and
crisis management, forensic accounting, and valuation. Mr. Cooper has over 30
years experience as a financial advisor and in leading companies through
operational and financial reorganizations. He has represented both creditors and
companies in distressed situations. In his capacity as Enron's CEO, Mr. Cooper
has worked with the Enron board, the Creditors' Committee, and other
stakeholders in the bankruptcy process to sell non-core businesses, rehabilitate
assets, prosecute the Debtors' claims against banks and professional advisors,
and to assist employees in either retaining their employment with Enron's
ongoing businesses or to find new positions outside the Enron group. As such,
Mr. Cooper is currently leading Enron and the other Debtors out of their current
financial difficulties. Mr. Cooper works under the supervision of Enron's board
of directors comprised of four individuals with extensive business and energy
industry experience. The Enron board is wholly independent and each has the
support of the Creditors' Committee.
20
with Section 36.2 of the Plan, the Administrator shall be responsible for
implementing the distribution of the assets in the Debtors' estates to the
Debtors' creditors, including, without limitation, the divestiture of Portland
General common stock or the sale of that stock followed by the distribution of
the proceeds to the Debtors' creditors. In addition, pursuant to the Plan, as of
the Effective Date, the Reorganized Debtors will assist the Administrator in
performing the following activities: (a) holding the Operating Entities,
including Portland General, for the benefit of Creditors and providing certain
transition services to such entities, (b) liquidating the Remaining Assets, (c)
making distributions to Creditors pursuant to the terms of the Plan, (d)
prosecuting Claim objections and litigation, (e) winding up the Debtors'
business affairs, and (f) otherwise implementing and effectuating the terms and
provisions of the Plan.
Finally, in connection with the prosecution of litigation claims
against financial institutions, law firms, accounting firms and similar
defendants, a joint task force comprised of the Debtors, Creditors' Committee
representatives and certain of their professionals was formed in order to
maximize coordination and cooperation between the Debtors and the Creditors'
Committee in this regard. Each member of the joint task force is entitled to,
among other things, notice of, and participation in, meetings, negotiations,
mediations, or other dispute resolution activities with regard to such
litigation. Following the Effective Date, the Creditors' Committee
representatives, together with the Creditors' Committee's professionals, may
continue to participate in the joint task force.
H. Overall Fairness of the Plan
The Debtors and the Creditors' Committee firmly believe that the
global compromise embodied in the Plan is fair to each of the Debtors and their
respective creditors and falls within the range of reasonableness required for
approval by the Bankruptcy Court. The ENA Examiner has also agreed that the
global compromise is within the range of reasonableness as to the creditors of
ENA and its subsidiaries. The ENA Examiner has recommended that the ENA
creditors vote in favor of the Plan. The ENA Examiner has stated that the
settlement contained in the Plan is reasonable and that the treatment of the
creditors of ENA and its subsidiaries therein is fair and reasonable.
Accordingly, the ENA Examiner endorses a vote by such creditors in favor of the
Plan and supports its confirmation.
Although the Debtors and the Creditors' Committee believe the global
compromise can be approved solely on the basis that the settlements contained
therein fall within the range of reasonable outcomes, the benefits obtained from
avoiding estate-wide litigation by creditors with conflicting interests cannot
be overemphasized. Indeed, if a compromise had not been reached, the cost,
delay, and uncertainty attendant to litigating the complex inter-estate issues
resolved by the Plan would have resulted in substantially lower recoveries for
most, if not all, creditors.
With respect to the common Plan Currency concept for all creditors,
this feature of the global compromise promotes efficiency without being unfair
or inequitable. Concerns have previously been raised by certain creditors of ENA
that the filing of a joint plan involving ENA and the other Debtors would be
unfair because ENA has been in liquidation since shortly after
21
the Initial Petition Date and should not be unnecessarily entangled with the
estates of the other Debtors, including Enron. The ENA creditors would not be
materially disadvantaged by the common Plan Currency feature because,
irrespective of any global compromise, there is inescapable entanglement between
the estates of ENA and Enron because ENA is the single largest creditor of Enron
and its intercompany claim against Enron is ENA's single largest asset. Thus,
distributions to ENA creditors necessarily depend in large part on what ENA
recovers on its Intercompany Claim against Enron. Similarly, Enron's
intercompany claims against EPMI and numerous other Debtors would result in
assets of such other Debtors being transferred to Enron for further distribution
to Enron's creditors, including ENA. Thus, while it is an integral feature of
the global compromise, the common Plan Currency feature of the Plan is also
justifiable for many of the Debtors because of the way in which value is
transferred through intercompany claims. In any event, based on the Debtors'
current estimates of asset values and Allowed Claims, Plan Currency is expected
to be approximately two-thirds in the form of Creditor Cash and approximately
one-third in the form of Plan Securities.
As noted above, the Plan is constructed in conformity with the
provisions of section 1129 of the Bankruptcy Code. As such, it adheres to the
dictates of the "absolute priority" provisions of the Bankruptcy Code and
applicable law. Notwithstanding that current valuations of the Debtors' assets
do not indicate that a distribution will be made to the Debtors' preferred and
common interest holders, the Plan does provide that, if (a) asset sales yield
proceeds greater than currently projected and (b) recoveries associated with the
resolution of litigation, including, without limitation, the subordination,
waiver or disallowance of claims as a result of the Litigation Trust Claims and
the Special Litigation Claims are at a level so that Creditors shall have
received distributions which, in the aggregate, are equal to one hundred percent
(100%) of their Claims, the Plan shall be modified to provide for distributions
to preferred and common interest holders. Additionally, the Plan does not affect
in any manner the recoveries that public bondholders and equity interest holders
may receive as a result of pending class actions or other third party actions or
with respect to the funds that have been recovered by the Commission for the
benefit of such entities and individuals. See, Plan, Section 42.4.
Item 2. Fees, Commission and Expenses
The fees, commission and expenses paid or incurred, or to be paid or
incurred by the Applicants in connection with the filing of this Application are
not expected to exceed $__________.
In addition, the Applicants have incurred and will incur fees and
expenses related to the ongoing bankruptcy proceedings and expenses related to
the consummation of the transactions contemplated in the Plan. Pursuant to Rule
63, such fees are not subject to the approval of the Commission.
Item 3. Applicable statutory provisions and legal analysis
Sections 11 (f) and 11(g) of the Act and Rules 60, 62-64 are
considered applicable to the proposed transactions. Specifically, Applicants
seek the Commission's approval of the Plan pursuant to Section 11(f) of the Act
and that the Commission issue a report on the Plan under
22
Section 11(g) of the Act and Rule 62 thereunder to accompany the Disclosure
Statement, together with the Commission's report approving the Plan and the
disclosure statement.
Applicants also request that any report issued by the Commission
concerning the Plan under Section 11(g) determine that the Plan does not
contravene the provisions of the Act or the regulations issued thereunder.
Section 11(f) of the Act does not provide a specific standard for the Commission
to use in analyzing a chapter 11 plan. Instead, in approving such a plan, the
Commission must conclude that the plan meets any applicable requirements of the
Act. A number of statutory provisions would be applicable to the various
transactions contemplated under the Plan. However, the Commission has found that
it is more appropriate to consider chapter 11 plans in their entirety in the
context of the goals and policies of the Act rather than to discuss individual
transactions. See Holding Co. Act Release No. 27736 (Oct. 10, 2003). Applicants
request that the Commission apply the same approach here and consider and
approve the Plan in its entirety, taking into consideration the context in which
it was developed by the Debtors and other stakeholders over the course of the
chapter 11 cases.
In addition, the Applicants have expressly sought authorization for
the majority of the jurisdictional transactions relating to the implementation
of the Plan in the Omnibus Application. To the extent that any transaction
contemplated by the Plan is not specifically discussed in that application,
Applicants hereby respectfully request authorization for such transaction.
Further, to the extent that the transactions which are the subject matter of the
Plan Application are considered by the Commission to require authorization,
approval or exemption under any section of the Act or provision of the rules and
regulations other than those specifically referred to herein, a request for such
authorization, approval or exemption is hereby made pursuant to Rule 64. As
indicated above, however, Applicants will file a separate application requesting
authorization to sell Portland General to an unaffiliated third party, or
distribute Portland General shares to creditors or to the PGE Trust pursuant to
the Plan.
Applicants request that the Commission waive the filing of a separate
Form U-R-1 since all the requisite information will be included in the
disclosure statement filed as Exhibit I-2 hereto.
It is requested that the authority be granted to file certificates
under Rule 24 on a quarterly basis after the Effective Date with respect to the
proposed transactions hereafter consummated pursuant to this Application, not
later than 30 days following the end of each quarter. In addition, certain
contemplated transactions may be accomplished over a period of time after an
order is issued in this proceeding; therefore authorization is requested to
implement the proposed transactions as described in the Application.
Finally, as indicated above, Enron, IM and Enforcement have held
discussions regarding a possible settlement agreement addressing (a) the
registration of Enron as a public utility holding company under Section 5 of the
Act, (b) the Plan, the solicitation of votes accepting or rejecting the Plan,
and various transactions in furtherance of the chapter 11 cases that may require
Commission authorization under the Act were Enron a registrant under the Act,
and (c) the exemption application filed by Enron and other parties in SEC File
No. 70-11373 has been discussed. Enron reserves the right to contest Commission
jurisdiction over the Plan and the solicitation of creditors under Sections
11(f) and (g) of the Act if the Commission does not
23
enter orders granting the Plan Application (and a report on the Plan consistent
therewith) and the Omnibus Application in substantially the form proposed in the
settlement offer, or if the Commission rejects the settlement offer.
Item 4. Regulatory approvals
The Bankruptcy Court has jurisdiction over the Plan and the transfer
of the Portland General common stock to PGE Trust and to creditors under the
Plan is also subject to the approval of the FERC and the OPUC. No other state or
federal regulatory authorization is necessary in order to implement the
transactions contemplated by the Plan.
Item 5. Procedure
Applicants respectfully request the Commission to issue and publish
forthwith the requisite notice under Rule 23 with respect to the filing of this
Application, such notice to specify the minimum period allowed for the
submission of comments. Provided that the settlement agreement among Enron, IM
and Enforcement described herein is approved by the Commission, Applicants
submit that (a) a recommended decision by a hearing or other responsible officer
of the Commission is not needed, (b) IM may assist in the preparation of the
Commission's decision, and (c) there should be no waiting period between the
issuance of the Commission's order and the date on which it is to become
effective. Enron reserves the right to contest Commission jurisdiction over the
Plan and the solicitation of creditors under Sections 11(f) and (g) of the Act
if the Commission does not enter orders granting the Plan Application (and a
report on the Plan consistent therewith) and the Omnibus Application in
substantially the form proposed in the settlement offer, or if the Commission
rejects the settlement offer.
Item 6. Exhibits and Financial Statements
Exhibits:
Exhibit B-1 Term sheet containing transaction details for the sale of
the common stock of Portland General to Oregon Electric.
Exhibit B-2 Stock Purchase Agreement Between Oregon Electric Utility
Company, LLC and Enron Corp. dated November 18, 2003,
incorporated by reference to Exhibit G of the application of
Stephen Forbes Cooper, LLC, PGE Trust and Enron Corp. in SEC
File No. 70-11373.
Exhibit F-1 Opinion of counsel (to be filed by amendment)
Exhibit F-2 Past tense opinion of counsel (to be filed by amendment)
Exhibit G Form of Notice
Exhibit H List of Applicants
Exhibit I-1 Fifth Amended Joint Plan of Affiliated Debtors Pursuant to
Chapter 11 of the United States Bankruptcy Code dated
January 9, 2004, incorporated by reference to Exhibit 2.1 of
the Enron Corp. Current Report on Form 8-K dated January 9,
2004 (filed January 12, 2004, SEC File No. 001-13159).
Exhibit I-2 Disclosure Statement for Fifth Amended Joint Plan of
Affiliated Debtors Pursuant to Chapter 11 of the United
States Bankruptcy Code dated January 9, 2004, incorporated
by reference to Exhibit 2.2 of the Enron Corp. Current
Report
24
on Form 8-K dated January 9, 2004 (filed January 12, 2004,
SEC File No. 001-13159).
Exhibit J-1 Docket No. 15303, In re Enron Corp., et al., Chapter 11 Case
No. 01-16034 (AJG), Jan. 9, 2004 (U.S. Bankruptcy Court,
S.D.N.Y.), incorporated by reference to Exhibit H of the
application of Stephen Forbes Cooper, LLC, PGE Trust and
Enron Corp. in SEC File No. 70-11373.
Exhibit J-2 Docket No. 15296, In re Enron Corp., et al., Chapter 11 Case
No. 01-16034 (AJG), Jan. 9, 2004 (U.S. Bankruptcy Court,
S.D.N.Y.), incorporated by reference to Exhibit I of the
application of Stephen Forbes Cooper, LLC, PGE Trust and
Enron Corp. in SEC File No. 70-11373.
Exhibit S-1 Services and Indemnity Agreement among GSS Holdings II,
Inc., Global Securitization Services, LLC and Portland
General Electric Company, dated September 30, 2002 and Share
Certificate.
Exhibit S-2 OPUC orders dated September 30, 2002 and January 13, 2003.
Exhibit T Letter dated January 8, 2004 in which the ENA Examiner
states that the Plan is fair and equitable.
Exhibit U Summary of Public Interest Facts (to be filed by amendment)
Item 7. Information as to Environmental Effects
None of the matters that are the subject of this
Application/Declaration involve a "major federal action" nor do they
"significantly affect the quality of human development" as those terms are used
in section 102 (2)(c) of the National Environmental Policy Act. The matters that
are the subject of this Application will not result in changes in the operation
of Applicants that will have an impact on the environment. Applicants are not
aware of any federal agency that has prepared or is preparing an environmental
impact statement with respect to the transaction.
25
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this statement to be signed
on their behalf by the undersigned officers thereunto duly authorized.
Date: February 5, 2004
ENRON CORP. on its behalf and on behalf of its
subsidiaries listed on Exhibit H.
By: /s/ Raymond M. Bowen, Jr.
-------------------------
Name: Raymond M. Bowen, Jr.
Title: Executive Vice President and Chief
Financial Officer of Enron Corp.
EXHIBIT INDEX
Exhibit B-1 Term sheet containing transaction details for the sale of
the common stock of Portland General to Oregon Electric.
Exhibit B-2 Stock Purchase Agreement Between Oregon Electric Utility
Company, LLC and Enron Corp. dated November 18, 2003,
incorporated by reference to Exhibit G of the application of
Stephen Forbes Cooper, LLC, PGE Trust and Enron Corp. in SEC
File No. 70-11373.
Exhibit G Form of Notice
Exhibit H List of Applicants
Exhibit I-1 Fifth Amended Joint Plan of Affiliated Debtors Pursuant to
Chapter 11 of the United States Bankruptcy Code dated
January 9, 2004, incorporated by reference to Exhibit 2.1 of
the Enron Corp. Current Report on Form 8-K dated January 9,
2004 (filed January 12, 2004, SEC File No. 001-13159).
Exhibit I-2 Disclosure Statement for Fifth Amended Joint Plan of
Affiliated Debtors Pursuant to Chapter 11 of the United
States Bankruptcy Code dated January 9, 2004, incorporated
by reference to Exhibit 2.2 of the Enron Corp. Current
Report on Form 8-K dated January 9, 2004 (filed January 12,
2004, SEC File No. 001-13159).
Exhibit J-1 Docket No. 15303, In re Enron Corp., et al., Chapter 11 Case
No. 01-16034 (AJG), Jan. 9, 2004 (U.S. Bankruptcy Court,
S.D.N.Y.), incorporated by reference to Exhibit H of the
application of Stephen Forbes Cooper, LLC, PGE Trust and
Enron Corp. in SEC File No. 70-11373.
Exhibit J-2 Docket No. 15296, In re Enron Corp., et al., Chapter 11 Case
No. 01-16034 (AJG), Jan. 9, 2004 (U.S. Bankruptcy Court,
S.D.N.Y.), incorporated by reference to Exhibit I of the
application of Stephen Forbes Cooper, LLC, PGE Trust and
Enron Corp. in SEC File No. 70-11373.
Exhibit S-1 Services and Indemnity Agreement among GSS Holdings II,
Inc., Global Securitization Services, LLC and Portland
General Electric Company, dated September 30, 2002 and Share
Certificate.
Exhibit S-2 OPUC orders dated September 30, 2002 and January 13, 2003.
Exhibit T Letter dated January 8, 2004 in which the ENA Examiner
states that the Plan is fair and equitable.
Dates Referenced Herein and Documents Incorporated by Reference
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