Message-ID: <24964122.1075858677704.JavaMail.evans@thyme>
Date: Tue, 16 Oct 2001 16:35:11 -0700 (PDT)
From: theresa.franklin@enron.com
To: britt.davis@enron.com
Subject: RE: ENA v. Adkins
Cc: ron.nolte@enron.com, e..dickson@enron.com, b..sanders@enron.com, 
	john.singer@enron.com, r..price@enron.com, ron.nolte@enron.com, 
	ellen.wallumrod@enron.com, stephanie.sever@enron.com, 
	f..smith@enron.com
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Wade Price should be able help you out on item #1.

I never was really assigned to "audit" the Appalachian suppliers.  I was mi=
dway through another Appalachian project , when I realized that there were =
several transport and purchase related issues.  So, I began compiling a Sup=
plier Reference Book to get a better picture of supplier's activity.  I use=
d this book to verify price change request.  I also used it to identify sev=
eral incorrect requests for pricing adjustments and errors in Settlements' =
calc-sheets.  My concern for additional purchase errors led me to the revie=
w most of the Appalachian purchase deals.  It was during one of these activ=
ities that I identified the Adkin's payment errors.  I'm sorry, but I don't=
 have any documented "audit" findings.  Any correspondence I did have was l=
ost in the conversion to Outlook.  I do still maintain my Supplier Referenc=
e Book, but I don't think it would be much help.  However, I did review the=
 CGAS IF pricing the for the year prior to the deal.  Only one month during=
 that time was the index price higher than the contracted $3.075.  In fact =
they were considerably lower.  Also, I've reviewed the settlement statement=
s, it appears we paid Mr. Adkins for three months before the error was caug=
ht.  The first month was paid at index (index was $0.06 lower than the cont=
ract price), the next month was paid at index ( index was $0.22 higher than=
 contract price) and the third month was corrected to the $3.075 ( index wa=
s $4.53).   I think this correction made in Oct-00, is when he first realiz=
ed there was an issue.  I hope this helps you,  Terry 3-7675.



 -----Original Message-----
From: =09Davis, Britt =20
Sent:=09Tuesday, October 16, 2001 10:29 AM
To:=09Dickson, Stacy E.
Cc:=09Sanders, Richard B.; Singer, John; Price, Wade R.; Nolte, Ron; Wallum=
rod, Ellen; Franklin, Mary Theresa; Sever, Stephanie
Subject:=09ENA v. Adkins


=09Stacy,

=09This will confirm our telephone conference with Mike Farrell, Franklin A=
dkins' attorney, today.  Based on my recommendation, you and I followed up =
with him today to see if Adkins still wanted to pursue his claim, despite o=
ur response to him.

=09Farrell told us that although his client had not yet received his writte=
n legal analysis, Adkins does not want to drop the claim.  Farrell told you=
 and me that he thought the "mere sending of your confirm" did not overweig=
h the months that ENA paid Adkins under the index price, which established =
in Farrell's view a course of dealing between the parties that made the ind=
ex price the correct price.  During this short telephone conference, Farrel=
l never said whether his client had received the confirmation.  Of course, =
our position is that whether Adkins' telefax machine printed out the confir=
mation is irrelevant; we have the evidence necessary to show that we sent i=
t.

=09Farrell told us that he expected to send us a response next week, contin=
uing his demand for arbitration.  He did not say whether there would be any=
 settlement offer in the letter.  I will advise you as soon as I receive Fa=
rrell's letter.

=09I would be very pleased to arbitrate this for you as your trial counsel.=
  I believe that Farrell is correct in stating that there are sufficient fa=
cts to create a course of performance issue, on which arbitrators could rul=
e in favor of Adkins.  However, I believe that we have a persuasive argumen=
t that ENA paid the incorrect price only as a result of a clerical error.  =
In order to support this argument, we also need to develop the following:=
=20

=091.  Did Franklin Adkins do or not do anything as the result of receipt o=
f payment of the index price for a period of time that disadvantaged him?  =
 The timing of when Adkins first realized he was being paid the index price=
 may be critical.  I need to speak to the right person about how we would h=
ave made payment and what business documents were sent to Adkins after the =
confirm was telefaxed, and get copies of all those documents.  Could someon=
e tell me who that would be? =20

=092.  Did ENA correct the price before or after the spot market price rose=
 above the contract price? (You had kindly agreed to do the homework on thi=
s).  Also, I need Mary to advise me when she was instructed to perform the =
internal audit, why and by whom, and get copies from her of all her file ma=
terial on that audit.

=09I greatly appreciate your and everyone else's help.  If anyone has any t=
houghts on other homework we could or need to be doing, please let me know.=
  If anyone knows of someone else who needs to be in the loop on this, plea=
se let me know.

=09I will continue to keep you advised.

=09Britt

=09


=09
 