Subject: Re: further report
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Thu, 15 Nov 2001 13:59:52 -0800 (PST)

I believe that SDI's lawyer may have been telling the truth when he said that
Enron was not brought in to the Cleveland settlement discussions, because SDI
and McDonald were doing a larger deal with Schultes.  We refused to join in
their deal in Los Angeles (because it left the Cleveland action alive.)  And,
during the last 45 days, McDonald and SDI have been dismissing claims against
Schultes all around the country.  Something larger does appear to be going on.

>>> "[email-masked]" 11/15/01 01:45PM >>>
by now you should all have by fax the dismissals filed today in the schultes
case, including the gift to us of a dismissal of the contract counts (1-4)
against the enron entities as well!  i spoke with counsel for sdi, who -
despite confidentiality restrictions - confirmed my instinct that the
defendants were concerned that they could be brought back in if the contract
claims still existed against us.  i have to think harder as to whether they're
really off the hook on the tort counts, but it's at least reassuring they
thought so.

interesting as well, the defendants apparently urged the plaintiff to just
dismiss us. his lawyer apparently rejected the suggestion with the explanation
that we could pay too.  they responded "for what"? and apparently the
plaintiff's counsel just repeated the same response.  if it offers any
comfort, sdi's lawyer can't imagine any case schultes has to proceed against
us on.

i asked why we hadn't been broached to join in, and the only explanation i got
- which didn't seem really to be enough of an answer - was that this was just
part of a bigger settlement of the securities cases.  for our info, have there
been such settlements?

the "big" strategic question now is do we just wait to hear from the court or
plaintiff's counsel, or do we push for a hearing.  thoughts?

Charna E. Sherman
Hahn Loeser & Parks  LLP
[email-masked] 216-274-2556 (voice)
216-274-2555 (fax)

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