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Eighteen lawyers Wednesday hunkered down outside the chambers of U.S. Bankruptcy Court Judge Arthur Gonzalez in Manhattan to establish how documents relating to Enron Corp.’s byzantine maze of offshore partnerships will be accessed. Such disclosure is considered paramount to providing Enron’s creditors with an understanding of the Houston energy giant’s capital structure and represents a crucial step toward the crafting of a reorganization plan for the company. “We’ve all wearing blindfolds because we don’t have any information on these financial transactions and need access to the documents before we can start to decipher the assets, liabilities and balance sheet issues that are key to reorganization,” said Richard Casher at Kasowitz, Benson, Torres & Friedman in New York, counsel to Enron creditors Angelo, Gordon & Co. and Elliott Associates. The attorneys who gathered were attempting to establish a protocol for access to the documents, which congressional investigators already have. Gonzalez, who never even stepped into his courtroom for Wednesday’s scheduled hearing on the disclosure issue, is expected to rule on the new access guidelines at a hearing that will be rescheduled sometime next week. “The issues raised by the off-balance sheet discovery potentially affect the interests of nearly all of the parties because those transactions may affect the debtors’ capital structure,” Casher said. “Access to those documents is vital because the major parties and interests will not be in any position to start work on a reorganization plan until they are able to understand, dissect and digest these off-balance sheet transactions.” The creditors want Gonzalez to give them full access to copies of any transcripts of depositions conducted under discovery via Rule 2004 of the Bankruptcy Code. Gonzalez on Feb. 25 granted the unsecured creditors committee to subpoena witnesses and documents related to the off-balance sheet assets and liabilities. But other creditors are eager to get equal access to information relating to Enron’s off-balance sheet activity. The factions negotiated unspecified guidelines to open those documents to creditors under Rule 2004 while giving the parties producing the files the right to object to the court. “We’re all trying to work through a procedure where all the parties that want access [to the documents] will be able to get access unless the producing party has a specific objection to a particular requestor receiving the information,” said Deborah Reperowitz of Reed Smith in Newark, N.J., counsel to Enron creditor, Wiser Oil Co. Kasowitz Benson proposed that Gonzalez agree to set up a central document depository so that all interested parties have access to transcripts of any depositions, or videotapes and exhibits of those depositions, during normal working hours. The firm also asked that a depository that’s Internet-based also be available around the clock. “What we’re trying to do is develop a cost-effective and efficient mechanism to deal with Rule 2004 discovery [rules] while protecting the rights of all parties,” said the attorney for the creditors committee, David Gelfand at Milbank, Tweed, Hadley & McCloy in New York. The unsecureds have named about 50 corporations and individuals, including offshore partnership LJM2 Co-Investment, Jeffrey Skilling, Andrew Fastow and Houston co-counsel Vinson & Elkins, as potential targets of a subpoena. LJM2 said it intends to cooperate with the creditors committee but noted that its ability to comply with a committee subpoena could be limited since its sole general partner, Partnership Services, was only appointed Jan. 4. “Partnership Services is a newly appointed general partner and there are practical limitations on LJM2′s ability to cooperate,” according to its response to the committee. Copyright (c)2002 TDD, LLC. All rights reserved.

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