UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION

JOINT MOTION OF THE DIVISION OF INVESTMENT MANAGEMENT
AND ENRON CORP. FOR A POSTPONEMENT OF THE TIME FOR FILING PAPERS AND THE COMMISSION'S DECISION IN THIS PROCEEDING, TO ALLOW THE COMMISSION TO CONSIDER ENRON'S SETTLEMENT OFFER

I. BACKGROUND

On December 31, 2003, Stephen Forbes Cooper, LLC, PGE Trust (a to-be-formed entity) and Enron Corp.¹ ("Enron") filed an application with the Commission under Section 3(a)(4) of the Public Utility Holding Company Act of 1935 ("Act") seeking exemption as temporary holding companies from all the provisions of the Act, except Section 9(a)(2). By order, dated January 14, 2004, the Commission issued a notice of and order scheduling a hearing on the application as it relates to Enron's request for exemption (the "Order").² The Order scheduled a hearing to be conducted under Sections 3(c) and 19 of the Act on the basis of the written submissions to be filed on or before February 2, 2004.

In late January, 2004, representatives of Enron and the Division of Investment Management ("IM") met on several occasions for discussions about the registration of Enron as a public utility holding company under Section 5 of the Act, the chapter 11 plan for Enron and its affiliated debtor entities, the solicitation of votes accepting or rejecting the plan, and various transactions in furtherance of the chapter 11 cases that may require Commission authorization under the Act were Enron a registrant under the Act.³ Discussions also addressed the preparation of applications to the Commission for relief under the Act predicated on Enron's registration under the Act in the near future. In addition, a format for a comprehensive settlement of the application in this proceeding was discussed.

On January 30, 2004, in response to a joint motion filed by IM and Enron describing the ongoing settlement discussions, the Commission subsequently extended the date of the hearing until February 9, 2004, again on the basis of papers to be filed on or before February 9, 2004. On February 6, 2004, Enron proffered a settlement offer that, if accepted by the Commission, would resolve this administrative proceeding and result in Enron's registration as a holding company under the Act ("Settlement Offer"). The Settlement Offer also provides, among other things, that Enron would immediately file two applications for Commission authorization under the Act. The first application would request Commission authorization of the chapter 11 plan for Enron and its debtor subsidiaries and other relief related to soliciting the votes of creditors on the plan. This is referred to as the Plan Application. The second application would seek various authorizations under the Act that are required by Enron and its subsidiaries to operate as a registered holding company system. This is referred to as the Omnibus Application. The Omnibus Application seeks authorization for a variety of financing transactions, affiliated transactions and corporate restructuring actions that would permit the Enron group to continue the process of rationalizing its corporate structure, settling claims, and selling assets to maximize the value of the debtors' estates in bankruptcy.

II. REQUEST FOR RELIEF

Under Rules 154 and 161(a) and (c)(1) of the Commission's Rules of Practice, 17 C.F.R. §§ 201.154; 201.161(a) and 201.161(c)(1), IM and Enron request that the Commission extend the time for filing papers and postpone its decision in this proceeding. The request is intended to allow the Commission to consider the Settlement Offer before reaching a decision on the merits in this proceeding, because the Settlement Offer, if accepted, would result in Enron withdrawing its request for an exemption under Section 3(a)(4).

A postponement of this proceeding, pending a decision on the Settlement Offer, is appropriate because the Settlement Offer promotes the efficient adjudication of this proceeding and other matters involving Enron and its subsidiaries under the Act. Based on the tenor of the discussions to date, and demonstrable progress in the preparation for Enron's registration under the Act, IM and Enron believe that the Settlement Offer would promote the interests of investors, creditors, consumers and the public.

Accordingly, IM and Enron respectfully request that the Commission issue an order postponing the date for filing papers and the Commission's decision in this proceeding to allow it to consider fully the Settlement Offer. The Plan Application and the Omnibus Application were filed on February 6, 2003.⁴ The parties expect that notices soliciting public comment on the Plan Application and Omnibus Application will be issued on February 6, 2004, or soon thereafter. Upon the expiration of the notice period in late February, the Plan Application and Omnibus Application should be ripe for submission to the Commission for review. Under the Settlement Offer, Enron would register as a holding company under the Act upon the issuance of orders granting the Plan Application and Omnibus Application in substantially the form filed, as amended by mutual consent of IM and Enron, and the issuance of a report by the Commission on the plan in accordance with Section 11(g) of the Act. Accordingly, IM and Enron request that the Commission's order approving a postponement set March 8, 2004, as the date on which all parties should file their papers, unless Enron has already withdrawn its application under Section 3(a)(4) upon the issuance of an order by the Commission granting the Plan Application and Omnibus Application and a report on the plan in accordance with Section 11(g) of the Act.

IM and Enron further request the Commission to provide that, if the Settlement Offer is withdrawn by Enron, all parties will file their papers in this proceeding within three (3) business days after the date of the withdrawal. IM reserves the right to recommend an earlier date for the submission of papers in this proceeding if, in IM's view, after discussions with Enron, IM believes that sufficient progress has not been made toward effecting the terms of the Settlement Offer that the proposed settlement may be in jeopardy.

III. CONCLUSION

Wherefore, for the reasons stated herein, Enron and IM respectfully request that the Commission postpone the time for filing papers and postpone its decision in this proceeding consistent with the discussion herein.

¹ On December 2, 2001, Enron and certain of its subsidiaries filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York. Additional Enron subsidiaries have continued to file voluntary petitions since that time. Enron is a debtor in possession in accordance with sections 1107 and 1108 of the Bankruptcy Code. Portland General Electric Company, Enron's sole public utility subsidiary company, has not filed a voluntary petition and is not in bankruptcy.

² Notice of and Order Scheduling Hearing Regarding Request for Order Exempting Holding Companies from Registration Under the Public Utility Holding Company Act of 1935, Holding Co. Act Release No. 27793 (January 14, 2004).

³ A representative of the Official Committee of Unsecured Creditors in the debtors' chapter 11 cases was also present at some of the meetings as an observer.

⁴ SEC File Nos. 70-10199 and 70-10200.

http://www.sec.gov/rules/other/enron-mot020604.htm