Message-ID: <6229364.1075853244654.JavaMail.evans@thyme>
Date: Wed, 19 Jul 2000 16:27:00 -0700 (PDT)
From: rtellis@milbank.com
To: richard.b.sanders@enron.com
Subject: Nolan Deposition: Day 3
Cc: showard@milbank.com
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Kathy continued with Nolan and did not finish.? Nolan is likely to continue 
until Friday.? As a result, Izower's deposition has been taken off calendar 
for this Friday.

Highlights: 

--Kathy spent the bulk of the morning walking Nolan through videos that SDI 
personnel took of the poor quality steel being produced at the plant.

--Kathy continued to elicit testimony regarding the problems with the quality 
of the steel and the operations of the plant, e.g. Nolan testified that NSM 
had $25 million in scrap sitting on the ground and no money to buy pig iron 
or spare parts.? (Kathy's point was that NSM spent far to much on scrap 
leaving no funds for other necessary items).

--Kathy spent alot of time with Nolan on a meeting that took place in SDI's 
offices on Aug. 21 between Busse, Nolan, Bob Walters, Brian Barth, Kevin 
McConville and Stickler.? Nolan's handwritten notes of the meeting suggested 
that the group decided to abandon the filing of the F-1 and F-4 Registration 
Statements with the SEC in order to avoid having to disclose NSM's current 
state of affairs.? Nolan did not have a good recollection of the meeting.? 
Shortly after this meeting, Busse's lawyer sent a letter to White & Case 
indicating that Busse would not sign the Registration Statement.? Nolan's 
notes also indicated that Bob Walters reviewed a letter to him from Busse 
that has appeared on SDI's privilege log.? Kathy made a formal request for 
the document on grounds that the presence of Barth, McConville and Stickler 
at the meeting destroyed any attorney client privilege between Busse and his 
lawyer.? Gindler refused to produce it on grounds of privilege. (we haven't 
heard the end of this issue). 



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