re : how is our allegheny deal ? great news on the $ - cash is king .
our toll on the other hand has been painful . as of this morning , the remaining business issues were limited to the following :
gross negligence : we have been unwilling to say that if the plant operator is grossly negligent , we will compensate them for their market damages . in general , legal says that the law is vague and haedicke does not want to set a precedent on these types of deals . basically , we have said if the plant is not available allegheny reduces the capacity payment pro - rata . the example used is : the operator has a pick - up baseball game in the plant yard - foul ball is hit into the generator - plant goes down for a month - we say sorry , dont pay us this month - allegheny says pay ld ' s . we both agree that it is not gross negligence if the operator drops a wrench and the plant goes down for a month - allegheny wants a bigger penalty so we proposed a larger discount in the capacity payment .
l / c - in the event we portfolio finance , they want a $ 25 mm l / c to cover willful breach , gross negligence , etc . they want it from a aa bank with $ 2 billion of net worth , we want flexibility with a and smaller net worth - not a dealbreaker .
qualified entity : we want the right to assign the equity without their consent to certain qualified entities ( large power companies ) . we want to be able to sell to a company with min net worth of $ 200 mm , 500 mw of operations and at least one 150 mw + sized plant . allegheny wants a tougher standard - not a dealbeaker
loan agreements : they want copies of the loan agreements that would finance this asset - no .
all of this is very manageable and should be executable tonight . however , each day this week we have been in this position and they have re - introduced new issues / comments which have resulted in negotiations till 4 : 00 - 5 : 00 am .
one additional delay is that we just received very detailed comments from finance . we are going through them right now with brian kerrigan .
overall , i think we will get there , but it may not be until next week .
chris
louise kitchen
05 / 03 / 2001 12 : 06 pm
to : christopher f calger / pdx / ect @ ect
cc :
subject : how is our allegheny deal ?
we have our money !
re : how is our allegheny deal ?
great news on the $ - cash is king .
our toll on the other hand has been painful . as of this morning , the remaining business issues were limited to the following :
gross negligence : we have been unwilling to say that if the plant operator is grossly negligent , we will compensate them for their market damages . in general , legal says that the law is vague and haedicke does not want to set a precedent on these types of deals . basically , we have said if the plant is not available allegheny reduces the capacity payment pro - rata . the example used is : the operator has a pick - up baseball game in the plant yard - foul ball is hit into the generator - plant goes down for a month - we say sorry , dont pay us this month - allegheny says pay ld ' s . we both agree that it is not gross negligence if the operator drops a wrench and the plant goes down for a month - allegheny wants a bigger penalty so we proposed a larger discount in the capacity payment .
l / c - in the event we portfolio finance , they want a $ 25 mm l / c to cover willful breach , gross negligence , etc . they want it from a aa bank with $ 2 billion of net worth , we want flexibility with a and smaller net worth - not a dealbreaker .
qualified entity : we want the right to assign the equity without their consent to certain qualified entities ( large power companies ) . we want to be able to sell to a company with min net worth of $ 200 mm , 500 mw of operations and at least one 150 mw + sized plant . allegheny wants a tougher standard - not a dealbeaker
loan agreements : they want copies of the loan agreements that would finance this asset - no .
all of this is very manageable and should be executable tonight . however , each day this week we have been in this position and they have re - introduced new issues / comments which have resulted in negotiations till 4 : 00 - 5 : 00 am .
one additional delay is that we just received very detailed comments from finance . we are going through them right now with brian kerrigan .
overall , i think we will get there , but it may not be until next week .
chris
louise kitchen
05 / 03 / 2001 12 : 06 pm
to : christopher f calger / pdx / ect @ ect
cc :
subject : how is our allegheny deal ?
we have our money !