Subject: northern natural gas
yesterday , enron settled a procedural dispute with dynegy over northern natural gas . our settlement allows dynegy to exercise its option to acquire the pipeline , dismisses their texas lawsuit and extends enron ' s right to repurchase until june 30 . we reached this settlement as part of our efforts to bring enron out of bankruptcy . while we would like to keep northern natural , we still have some 9 , 000 miles of safe , profitable interstate pipelines as a base to rebuild our core businesses .
the settlement provides the best opportunity to resolve the pipeline issue quickly and pursue our $ 10 billion damage claim against dynegy . it also allows us to avoid the very substantial costs and distractions from protracted litigation in state courts .
we want to see a positive future for the employees working with northern natural gas . below is a copy of a message from stan horton further explaining this decision to the employees of enron transportation services .
ken
dear ets colleague :
on thursday , enron entered into a settlement over dynegy ' s exercise of its option to acquire the northern natural gas pipeline . the settlement allows dynegy to exercise the option and assume interim control of the pipeline while enron pursues its damage claim against dynegy .
in this respect , enron corp . has carefully weighed the substantial costs and turmoil that litigating this possession issue would create for the company and the employees of northern natural gas . consequently , enron corp . has decided not to contest interim possession and allow the transfer of northern natural gas to dynegy , while the larger issues affecting its future are resolved .
the company has concluded that with this settlement , enron should be able to resolve the issue more quickly , as well as avoid the legal cost burden and distractions to the business from protracted litigation in state court . for the northern natural gas employees , i believe this decision should allow them to steer clear of the dispute and focus on the day - to - day satisfaction of running a valuable , successful business .
beginning immediately we will be working to achieve a smooth transition and to align the appropriate resources to assure continued safe , reliable and efficient operation of northern natural gas .
over many years we have run high quality , cost conscious and profitable businesses in ets . keep up the good work !
stan