Message-ID: <25956785.1075848150988.JavaMail.evans@thyme> Date: Thu, 15 Mar 2001 23:23:00 -0800 (PST) From: james.steffes@enron.com To: steven.kean@enron.com, richard.shapiro@enron.com, mark.palmer@enron.com Subject: FW: EIX. PCG: QFs Prepare to File SCE Involuntary Bankruptcy Next Week Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: 7bit X-From: James D Steffes X-To: Steven J Kean, Richard Shapiro, Mark Palmer X-cc: X-bcc: X-Folder: \Steven_Kean_June2001_4\Notes Folders\Discussion threads X-Origin: KEAN-S X-FileName: skean.nsf ----- Forwarded by James D Steffes/NA/Enron on 03/16/2001 07:28 AM ----- Chip Schneider/ENRON@enronXgate 03/16/2001 07:22 AM To: Rick Buy/ENRON@enronXgate, David Gorte/ENRON@enronXgate, William S Bradford/ENRON@enronXgate, Christopher F Calger/PDX/ECT@ECT, W David Duran/HOU/ECT@ECT, Terry W Donovan/HOU/ECT@ECT, George Schaefer/HPL/Enron@Enron, Greg Blair/Corp/Enron@Enron, James D Steffes/NA/Enron@Enron, Alan Comnes/PDX/ECT@ECT cc: Subject: FW: EIX. PCG: QFs Prepare to File SCE Involuntary Bankruptcy Next Week -----Original Message----- From: Paul Patterson @ENRON [mailto:IMCEANOTES-Paul+20Patterson+20+3CPaul+5FPatterson+40xmr3+2Ecom+3E+40EN RON@ENRON.com] Sent: Friday, March 16, 2001 7:11 AM To: Schneider, Chip Subject: EIX. PCG: QFs Prepare to File SCE Involuntary Bankruptcy Next Week Credit Suisse First Boston Paul Patterson Good morning, ? Yesterday, Coram, a QF, said that it signed a petition to file involuntary bankruptcy against Southern California Edison. Reportedly, the petition is under review by five other renewable QFs. Apparently, certain gas-fired QFs are now forming a second petitioner group. ? We believe that it should be fairly easy for Coram to collect the two other signatures needed to make a petition valid. Whether the petition will actually be filed is unclear since the QFs may only be attempting to expedite a resolution for the utilities and themselves. ? On Wednesday, a federal court allowed Caithness, another QF, to place a lien on an Edison asset, thus giving it a secured claim effective in 90 days. Edison is filing an appeal and an automatic stay of decision. ? The Caithness decision may prompt Edison's other unsecured creditors to seek similar motions. As we previously indicated, we believe that QFs pose the greatest risk of filing involuntary bankruptcy against the utilities because of their dire financial situation. ? Although Governor Davis and the utilities purportedly continue to negotiate a recovery plan, there is no assurance of legislative cooperation. In addition, we expect news of the petition to cause near-term weakness in the utilities' stocks. Therefore, we recommend that investors avoid EIX ($13.59, Hold) and PCG ($12.92, Hold), unless they have a high tolerance for risk and volatility. Please call us with any questions you may have. Regards, Paul Patterson, 212-325-5876 Neil Stein, 212-325-4217 Wen-Wen Chen, 212-538-0223 Emily Lao Chua, 212-325-1982 If you would prefer not to receive further messages from this sender, please click on the following link and confirm your request: Mailto:K-8-62573-654519-2-151-US2-09FC2F8C@xmr3.com You will receive one additional e-mail message confirming your removal. - ppp031601.pdf