Message-ID: <31438291.1075858313640.JavaMail.evans@thyme> Date: Tue, 30 Jan 2001 01:38:00 -0800 (PST) From: rick.buy@enron.com To: david.gorte@enron.com, bradford.larson@enron.com, david.delainey@enron.com, john.thompson@enron.com, ben.glisan@enron.com Subject: Board Review of KCS Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Rick Buy X-To: David Gorte, Bradford Larson, David W Delainey, John Thompson, Ben Glisan X-cc: X-bcc: X-Folder: \Richard_Buy_Jun2001\Notes Folders\Discussion threads X-Origin: Buy-R X-FileName: rbuy.nsf The above transaction was presented to the Board on 1-29-2001. There was considerable discussion which I have summarized below. Returns: were the returns sufficient to syndicate the risk. I answered positively, which is what the capital price addresses. The dash return is a blended debt and equity return.(?) Was the $19 million excess proceeds enough to allow the company to operate. I answered yes since 85% of reserves are producing and little capital will be needed to develop pdnp and pud reserves. Is management capable of operating or will they be in chapter 11 again soon. I answered that the bankruptcy was a result of overpaying for Wyoming deal and low commodity prices last two years which resulted in a bb decrease below outstanding. We will have to watch this issue carefully. Are banks reluctant to support KCS and could this cause a liquidity problem? Answered that all creditors were made whole and likely that someone will come into credit but it was a risk, although for the time being they had enough cash to operate. This feedback is just for fyi but it does indicate that board is active and not a rubber stamp. Rick