in re enron - skadden 1st fee app (dn 4492).main doc

John Wm. Butler, Jr.Timothy P. OlsonSKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)333 West Wacker DriveChicago, Illinois 60606(312) 407-0700

- and -

D. J. Baker (DB 0085)SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLPFour Times SquareNew York, New York 10036(212) 735-3000

Special Counsel for Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF NEW YORK

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In re

ENRON CORP., et al.,

Debtors.

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Chapter 11

Case No. 01-16034 (AJG)

Jointly Administered

FIRST APPLICATION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP AND ITS AFFILIATED LAW PRACTICES,

SPECIAL COUNSEL FOR ENRON CORP. AND CERTAIN OF ITS SUBSIDIARIES, SEEKING ALLOWANCE OF INTERIM COMPENSATIONAND REIMBURSEMENT OF EXPENSES UNDER 11 U.S.C. §§ 330 AND 331 FOR THE PERIOD DECEMBER 2, 2001 THROUGH MARCH 31, 2002

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Name of Applicant: Skadden, Arps, Slate, Meagher & FlomLLP and Its Affiliate Law Practices

Authorized to Provide Professional Services To: Enron Corp. and certain of its

subsidiaries and affiliates

Date of Retention Order: February 8, 2002

Period for which compensation and reimbursement is sought: December 2, 2001 through March 31, 2002

Amount of Voluntary Reduction inCompensation and Reimbursementof Charges and Disbursements: $787,361

Amount of Compensation sought asactual, reasonable and necessary: $6,082,477

Amount of Expense Reimbursementsought as actual, reasonable andnecessary: $496,121

This is an: X interim final application.

1 The blended rates set forth for certain professionals reflect the average billingrate for the entire Application Period and incorporate a reduced billing ratefor nonworking travel time.

3

TIME SUMMARY TO FIRST INTERIM FEE APPLICATION OFSKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

AND ITS AFFILIATED LAW PRACTICES DECEMBER 2, 2001 - MARCH 31, 20021

NameYear

of Ad-mis-sion

Rate1 Hours Amount

PARTNERS

Robert S. Bennett 1965 $680 579.0 $ 393,926

Carl S. Rauh 1965 $682 537.6 $ 366,856

Peter A. Atkins 1968 $695 422.2 $ 293,429

Saul M. Pilchen 1983 $522 539.3 $ 281,411

J. Phillip Adams 1972 $674 315.3 $ 212,601

Mark R. Filip 1991 $470 433.9 $ 203,742

Lynn R. Coleman 1964 $580 290.3 $ 168,374

Martin Klepper 1973 $610 178.4 $ 108,745

John Wm. Butler, Jr. 1980 $680 142.4 $ 96,814

Keith D. Krakaur 1984 $542 145.6 $ 78,967

Fred T. Goldberg, Jr. 1973 $695 111.3 $ 77,354

Alan G. Schiffman 1984 $650 99.6 $ 64,740

Kenneth A. Gross 1975 $626 100.4 $ 62,843

Alan Kriegel 1977 $608 96.0 $ 58,338

4

Stuart N. Alperin 1976 $695 80.0 $ 55,600

D. Jan Baker 1973 $695 71.0 $ 49,345

Lance T. Brasher 1990 $503 94.2 $ 47,355

Jonathan J. Lerner 1973 $695 35.5 $ 24,673

Jerome S. Hirsch 1974 $643 38.2 $ 24,569

Jeffrey S. Christie 1979 $580 27.7 $ 16,066

Robert J. Del Tufo 1958 $675 20.8 $ 14,040

Eric L. Cochran 1986 $630 15.5 $ 9,765

John C. Quale 1971 $650 10.1 $ 6,560

Jonathan B. Stone 1990 $545 11.9 $ 6,486

Total Partners 4,396.2 $ 2,722,599

COUNSEL

Nancy J. McGlynn 1988 $463 529.9 $ 245,129

Ivan A. Schlager 1989 $470 336.6 $ 158,202

Philip McBride Johnson 1962 $695 99.4 $ 69,083

Erich T. Schwartz 1983 $470 54.1 $ 25,427

Ki P. Hong 1992 $470 30.7 $ 14,429

Total Counsel 1,050.7 $ 512,270

ASSOCIATES

David J. Goldstone 1994 $404 761.5 $ 307,644

Vincent P. Schmeltz, III 1997 $357 622.2 $ 222,072

Susan K. Declercq 1999 $302 639.0 $ 193,100

Lee P. Garner 1995 $400 405.5 $ 162,079

Timothy P. Olson 1996 $384 418.9 $ 161,042

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Michael R. Bergmann 1992 $441 345.3 $ 152,283

Suzanne D. Strater 1994 $341 401.9 $ 136,743

Erik Elsea 1998 $344 378.7 $ 130,433

Steven J. Cleveland 1998 $334 296.0 $ 98,879

Maria E. Douvas 1998 $351 274.8 $ 96,360

Martin Ziessler Foreign $378 232.6 $ 88,026

Anand S. Raman 1995 $373 197.6 $ 73,725

Armando Gomez 1994 $414 153.4 $ 63,454

George H. Windecker, Jr. 1993 $430 129.9 $ 55,857

Randall G. Reese 2001 $230 228.2 $ 52,458

Douglas W. Swalina 1997 $322 158.9 $ 51,228

Jessica A. Hough 1997 $380 103.4 $ 39,292

Justin L. Heather 2001 $213 179.4 $ 38,261

Amr Razzak 1998 $395 85.6 $ 33,812

Ingo Scholz Foreign $355 93.5 $ 33,215

Romina Weiss 1991 $460 54.3 $ 24,978

David E. Carney 1999 $330 72.5 $ 23,925

Ralph L Stengren 1997 $380 62.2 $ 23,636

Lanelle K. Meidan 1999 $330 69.8 $ 23,034

Scott D. Musoff 1994 $430 41.1 $ 17,673

Beverly A. Farrell 2001 $230 69.8 $ 16,054

John M. Beahn 1998 $365 41.2 $ 15,038

Ferdinand Von Rom Foreign $395 33.8 $ 13,351

Keith A. Simon 1999 $330 40.4 $ 13,332

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Troy L. Olsen 1998 $365 32.9 $ 12,009

James Hope Foreign $430 27.2 $ 11,696

Ralph L. Stengren 1997 $380 30.7 $ 11,666

Gary W. Katz 1994 $415 26.0 $ 10,790

Jena Q. Bridges 1997 $380 23.5 $ 8,930

Rahman J. Harrison 1997 $295 21.3 $ 6,284

Melissa F. Levine 1997 $380 15.2 $ 5,776

Thomans W. Greenberg 1994 $430 11.7 $ 5,031

Total Associates 6,779.9 $ 2,433,166

PARAPROFESSIONALS

John McVicker N/A $160 632.8 $ 101,248

Brian D. Flynn N/A $185 479.7 $ 88,745

Maria Soto N/A $136 319.9 $ 43,523

Michael B. McClellan N/A $110 348.5 $ 38,335

Rose M. Rama N/A $141 149.5 $ 21,040

Daniel S. Carlton N/A $110 182.5 $ 20,075

Jeannette O. Shim N/A $150 124.1 $ 18,615

Angeline M. Negron N/A $80 169.3 $ 13,544

Daniel A. Mayer N/A $104 128.4 $ 13,360

Neda Bolourchi N/A $150 71.2 $ 10,680

Ruth Hassan N/A $130 77.5 $ 10,075

Sarah E. Barr N/A $130 76.4 $ 9,932

David J. Young N/A $150 42.5 $ 6,375

Mark Ward N/A $185 39.4 $ 7,289

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Rebecca L. Anderson N/A $146 42.0 $ 6,146

Gabrielle N. Biffar N/A $150 36.4 $ 5,460

Total Paraprofessionals 2,920.1 $ 414,442

TOTAL ALL PROFESSIONALS 15,146.9 $ 6,082,477

SUMMARY OF SERVICES RENDERED BYSKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

AND ITS AFFILIATED LAW PRACTICES DECEMBER 2, 2001 - MARCH 31, 2002

Activity Hours Fees

Regulatory/Investigative Matters (Congressional) 7,228.3 $2,778,134

Regulatory/Investigative Matters (Federal – Non-FERC) 2,911.6 $1,282,443

Asset Dispositions (Power) 1,086.8 $ 472,191

Advice – General Corporate and Board of Directors 604.1 $ 347,868

Retention/Fee Matters (SASM&F) 802.5 $ 329,907

Tax Matters 401.2 $ 228,403

Nonworking Travel Time 1,040.0 $ 207,919

Project Advice/Transactions (Non-Debtor Businesses) 327.2 $ 161,623

Case Coord./Admin. with General Bankruptcy Counsel 339.4 $ 87,260

Litigation Matters/Coordination (General) 169.3 $ 73,785

Regulatory/Investigative Matters (State and Local) 72.9 $ 44,812

Litigation Matters/Coordination (Non-Debtor Businesses) 105.3 $ 38,671

Financing Matters (Debtor Entities) 23.5 $ 8,930

Employee/Labor Matters 14.8 $ 8,830

Asset Dispositions (General) 8.9 $ 6,141

Regulatory/Investigative Matters (Non-Debtor Businesses) 11.1 $ 5,560

TOTAL 15,146.9 $6,082,477

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In re


Debtors.

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Chapter 11

Case Nos. 01-16034 (AJG)


FIRST APPLICATION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP AND ITS AFFILIATED LAW PRACTICES,

SPECIAL COUNSEL FOR ENRON CORP. AND CERTAIN OF ITS SUBSIDIARIES, SEEKING ALLOWANCE OF INTERIM COMPENSATIONAND REIMBURSEMENT OF EXPENSES UNDER 11 U.S.C. §§ 330 AND 331 FOR THE PERIOD DECEMBER 2, 2001 THROUGH MARCH 31, 2002

Skadden, Arps, Slate, Meagher and Flom LLP and its affiliated law

practices (collectively, “Skadden, Arps” or the “Firm”), special counsel for Enron

Corp. (“Enron”) and certain of its affiliated debtor entities (the “Affiliate Debtors”),

debtors and debtors-in-possession (Enron and the Affiliate Debtors collectively, the

“Debtors”) in the above-captioned cases (the “Reorganization Cases”), as well as for

certain of the non-Debtor subsidiaries and affiliates of the Debtors, equity of which is

held by the Debtors, submit this application (the “Application”) seeking allowance of

compensation and reimbursement of expenses pursuant to 11 U.S.C. §§ 330 and 331

for the period from December 2, 2001 through March 31, 2002 (the “Application

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Period”). Skadden, Arps submits this Application for (a) allowance of reasonable

compensation for professional services rendered by Skadden, Arps to the Debtors in

their Reorganization Cases and (b) reimbursement of actual and necessary charges

and disbursements incurred by Skadden, Arps in the rendition of required profes-

sional services on behalf of the Debtors. In support of this Application, Skadden,

Arps represents as follows:

BACKGROUND

1. Commencing on December 2, 2001 (the “Petition Date”) and,

in some instances, periodically thereafter, Enron and the Affiliate Debtors filed

voluntary petitions in this Court for reorganization relief under chapter 11 of title 11

of the United States Code, 11 U.S.C. §§ 101-1330, as amended (the “Bankruptcy

Code”). The Debtors continue to operate their business and manage their properties

as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy

Code. On December 3, 2001 and, in some cases, periodically thereafter, this Court

entered an order providing for the joint administration of the Reorganization Cases,

and these cases have been consolidated for procedural purposes only.

2. Pursuant to its authority under section 1102 of the Bankruptcy

Code, (a) on December 12, 2001, the United States Trustee for the Southern District

of New York (the “Trustee”) appointed an official committee of unsecured creditors

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(the “Committee”), and (b) on March 29, 2002, the Trustee appointed the Official

Employment Related Issues Committee.

3. This Court has jurisdiction over this Application pursuant to

28 U.S.C. §§ 157 and 1334. This is a core proceeding within the meaning of 28

U.S.C. § 157(b)(2). Venue of these cases in this district is proper pursuant to 28

U.S.C. §§ 1408 and 1409. The statutory predicates for the relief sought herein are

sections 330 and 331 of the Bankruptcy Code.

4. This Application has been prepared in accordance with the

Amended Guidelines for Fees and Disbursements for Professionals in Southern

District of New York Bankruptcy Cases, adopted by the Court on April 19, 1995 (the

“Local Guidelines”) and the United States Trustee Guidelines for Reviewing

Applications for Compensation and Reimbursement of Expenses Filed Under 11

U.S.C. § 330, adopted on January 30, 1996 (the “UST Guidelines” and, together with

the Local Guidelines, the “Guidelines”). Pursuant to the Local Guidelines, a

certification regarding compliance with the Guidelines is attached hereto as

Exhibit A.

5. On April 26, 2002, this Court established the Enron Fee and

Expense Review Committee (the “Fee Committee”) to work with the professionals

retained by the Debtors’ estates to review and monitor the fees, charges and disburse-

ments incurred by such professionals and develop procedures concerning the

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establishment of professional budgets for these cases. Subsequently the Fee Com-

mittee has met formally with the professionals concerning the fee review and

budgeting procedures, which currently are scheduled for implementation no later

than July 1, 2002.

RETENTION OF SKADDEN, ARPS

6. In December 2001, the Debtors applied (the “Retention

Application”) to the Court for an order approving the retention of Skadden, Arps, as

their special counsel, to perform legal services that were necessary to assist the

Debtors and their primary bankruptcy counsel, Weil, Gotshal & Manges LLP

(“Section 327(a) General Counsel”) in connection with certain corporate, financing,

litigation and arbitration, securities, tax, and other significant matters, including

assistance with energy projects throughout the world. Specifically, the Retention

Application provided that Skadden, Arps would provide the following professional

services to the Debtors:

(a) advising the Company and assisting Section 327(a)General Counsel in connection with any contemplated sales of assets or businesscombinations as shall arise from time to time assigned by the Company to, andaccepted by, Skadden, Arps, including the negotiation of asset, stock purchase,merger or joint venture agreements, the formulation and implementation of biddingprocedures, the evaluation of competing offers, the drafting of appropriate corporatedocuments with respect to the proposed sales, and counseling the Company inconnection with the closing of such sales;

(b) advising the Company on matters relating to therenegotiation of the business affairs, contracts and relationships of Enron Corp.’s

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affiliates and/or subsidiaries with particular attention to affiliate relationships, projectcontracts and the restructuring of various financing arrangements relating to foreignenergy projects and other advice related thereto;

(c) advising the Company and assisting Section 327(a)General Counsel in drafting a disclosure statement accompanying a plan of reorgani-zation with respect to the Engagement matters;

(d) providing non-bankruptcy advice to the Company: (i)with respect to foreign energy projects; (ii) through its Board of Directors andexecutive management in coordination with Section 327(a) General Counsel, withrespect to legal matters arising in or relating to the Company’s ordinary course ofbusiness including attendance at senior management meetings, meetings with theCompany’s financial and turnaround advisors, and meetings of the Board of Direc-tors; and (iii) with respect to such other matters as the Company and Section 327(a)General Counsel deem appropriate under the circumstances;

(e) representing the Company in connection with specificinvestigations or regulatory matters involving branches and/or agencies of the UnitedStates Government (including by way of illustration only, hearings and/or investiga-tions initiated by the United States Congress, the Federal Energy Regulatory Com-mission, the Securities and Exchange Commission, and the Department of Justice),as well as such matters involving any foreign or domestic state or local governmentalentity;

(f) representing the Company in any litigation or arbitra-tion matters in which Skadden, Arps has appeared as of the commencement of thechapter 11 cases, and such other matters as shall arise from time to time assigned bythe Company to, and accepted by, Skadden, Arps;

(g) attending meetings with third parties and participatingin negotiations with respect to the above matters;

(h) appearing before the Bankruptcy Court, any district orappellate courts, and the U.S. Trustee with respect to the matters referred to above;and

(i) performing the full range of services normally associ-ated with matters such as those identified above as the Company’s special counsel

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which the Firm is in a position to provide in connection with the matters referred toabove.

7. The scope of such services was clarified pursuant to a protocol

for allocation of legal work among Enron law firms, a portion of which relating to

Skadden, Arps was read into record at the February 8, 2002, hearing concerning

approval of the retention of Skadden, Arps. As read into the record, Skadden, Arps

disclosed to the Court that its services would be subject to the protocol, which

provided that Skadden, Arps would:

“represent Enron, as requested by it (but not providing bankruptcyservices, except consistent with this protocol), with respect to: salesof assets/businesses; restructuring of affiliate relationships andfinancings, particularly foreign affiliates; Congressional and othergovernmental investigations and regulatory matters; foreign energyprojects; through the Board of Directors and senior management andin coordination with Weil Gotshal & Manges, legal matters relating toordinary course of business (including meetings with senior manage-ment and the Board of Directors); and corporate governance issues,litigation/arbitration, and disclosure, coordinating with Weil Gotshal& Manges to avoid duplication.”

8. On February 8, 2002, the Court entered an order (the “Reten-

tion Order”) authorizing the Debtors to employ Skadden, Arps as their special

counsel under the terms set forth in the Retention Application. On February 25,

2002, the Court entered an amended order (the “Amended Retention Order”),

2 A copy of the Retention Order, the Amended Retention Order, the RetentionApplication and affidavit in support of the Retention Application are attachedhereto as Exhibit B. The Retention Order incorporated the terms of a retaineragreement dated November 30, 2001 (the “Retainer Agreement”) betweenSkadden, Arps and the Debtors, a copy of which is attached to the affidavitsupporting the Retention Application found in Exhibit B.

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clarifying certain terms of the Retention Order.2 The Retention Order and the

Amended Retention Order each provided that the retention of Skadden, Arps was

subject to the protocol read into the record at the February 8, 2002, hearing.

THE RETAINER AGREEMENT

9. As set forth more fully in the Retention Application, the

Debtors entered into the Retainer Agreement with Skadden, Arps. Pursuant to the

Retainer Agreement, the Debtors retained Skadden, Arps as special counsel to

consult with and assist Section 327(a) General Counsel in connection with, among

other things, corporate transactions, litigation matters and governmental regulatory

and investigative matters of the kind for which Skadden, Arps has represented the

Debtors and on which Section 327(a) General Counsel will require assistance.

10. Skadden, Arps has not drawn on the funds held in the retainer

account since December 2, 2001 (except as permitted by the Amended Retention

Order with respect to the payment of certain prepetition fees, charges and disburse-

ments incurred on or prior to December 2, 2001) and continues to hold the remaining

balance of the funds to be applied to fees, charges and disbursements which remain

3 In the affidavit in support of the Retention Application, Skadden, Arpsdisclosed that the balance in the Debtors’ account was $56,988 after satisfac-tion of statements rendered by Skadden, Arps for professional servicesrendered and charges and disbursements incurred during the month ofNovember 2001. However, the actual amount of such statements was$17,129 less than estimated at the time of filing of the Retention Applicationand the affidavit in support thereof. Accordingly, the amount held in theDebtors’ account currently is $74,117.

9

unpaid as of the conclusion of the Reorganization Cases. As of June 13, 2002, the

amount in the Debtors’ account was $74,117.3

11. In the Retention Application, the Debtors disclosed that

Skadden, Arps’ fees for professional services are based on its guideline hourly rates,

which are periodically adjusted. The Debtors also disclosed in the Retention

Application that Skadden, Arps’ charges and disbursements are invoiced pursuant to

Skadden, Arps’ Policy Statement Concerning Charges and Disbursements, a copy of

which is attached to the Retainer Agreement provided in Exhibit B hereto. Certain

charges and disbursements are not separately charged for under the bundled rate

structure as described in the Retention Application.

12. Other than an arrangement between Skadden, Arps, Slate,

Meagher & Flom LLP and its affiliated law practices and their members, there is no

agreement or understanding between Skadden, Arps and any person for the sharing

of compensation to be received for services rendered in this case.

4 Administrative Order Pursuant to Sections 105(a) and 331 of the BankruptcyCode Establishing Procedures for Interim Compensation and Reimbursementof Expenses of Professionals (Docket No. 981) (the “Fee Procedures Order”),a copy of which is attached hereto as Exhibit C.

5 Order Supplementing Administrative Order Dated January 17, 2002 Estab-lishing Procedures for Interim Compensation and Reimbursement of Ex-penses of Professionals By Establishing Fee Committee, Directing Prepara-tion of Professional Budgets and Formatting for Presentation of BillingStatements (Docket No. 3395) (the “Supplemental Fee Procedures Order”), acopy of which is also attached hereto as Exhibit C.

6 Second Supplemental Order Regarding (A) Procedures for Interim Compen-sation and Reimbursement of Expenses and (B) Preparation of ProfessionalBudgets and Formatting for Presentation of Billing Statements (Docket No.4010) (the “Second Supplemental Fee Procedures Order” and, collectivelywith the Fee Procedures Order and the Supplemental Fee Procedures Orderthe “Fee Procedures Orders”), a copy of which is also attached hereto asExhibit C.

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FEE PROCEDURES ORDERS

13. On January 17, 2002, this Court entered the Fee Procedures

Order,4 on April 26, 2002, this Court entered the Supplemental Fee Procedures

Order,5 which, among other relief, supplemented the Fee Procedures Order and

established a fee review committee, and on May 24, 2002, this Court entered the

Second Supplemental Fee Procedures Order6 further supplementing and clarifying

the terms of the prior Fee Procedures Orders. Pursuant to the Fee Procedures Orders

and Section B.3 of the Local Guidelines, Skadden, Arps is submitting this Applica-

tion to (a) the Debtors, (b) counsel for the Debtors, (c) the Office of the United States

Trustee for this district, (d) counsel to the Committee, (e) counsel to the co-adminis-

7 As indicated in the 10-Q, the numbers set forth above are unaudited.

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trative agents for the Debtors’ secured lenders under the postpetition Revolving

Credit and Guaranty Agreement (the “Postpetition Secured Lenders”), and (f) the Fee

Review Committee.

OVERVIEW OF THE CASES

14. Enron and the Affiliate Debtors, as well as their approximately

3,500 other direct and indirect subsidiaries that are not chapter 11 debtors (collec-

tively, the “Enron Companies”), building upon knowledge gained in over 70 years of

experience in the energy business, have grown into a worldwide leader in products

and services related to the sale and delivery of natural gas, electricity and communi-

cations to wholesale and retail customers. As of the Petition Date, the Enron

Companies employed approximately 25,000 individuals throughout the world and

were recently ranked fifth on the Fortune 500 list of the largest U.S. corporations.

15. For the fiscal year ended December 31, 2000, the Enron

Companies generated $101 billion in annual revenues on a consolidated basis. Based

on information set forth in the Form 10-Q filed on November 19, 2001 (the “10-Q”)

for the quarter ended on September 30, 2001, the Enron Companies’ consolidated

books and records reflected assets totaling approximately $61 billion and liabilities

totaling approximately $52 billion.7

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16. The Enron Companies divide their business operations into

four primary business units: Enron Wholesale Services, Enron Retail Services,

Enron Transportation Services, and Enron Global Services. The units comprise

wholesale and retail commodities trading, gas pipeline businesses and other global

services, including engineering, operation and construction of power facilities.

17. The commencement of these Reorganization Cases was

precipitated by several events that occurred in the months leading up to the Petition

Date. On October 16, 2001, Enron announced its third quarter 2001 earnings results,

reporting a net loss for the quarter and significantly reducing shareholders’ equity.

This announcement caused a marked decrease in the share price of Enron common

stock and led to subsequent decreases in the Debtors’ credit ratings for long-term

debt. These events had the further effect of eroding investor confidence which, in

turn, created additional pressure upon the Debtors’ credit ratings and significantly

diminished the Debtors’ ability to raise capital.

18. The situation was further exacerbated on October 22, 2001

when Enron announced that the Securities and Exchange Commission (the “SEC”)

had requested information relating to certain related-party transactions. The Debtors

subsequently undertook numerous actions as part of a strategic plan to restructure

and rehabilitate their financial condition.

8 Skadden, Arps is one member of the team of skilled professionals retained bythe Debtors to assist in their reorganization effort. Reference in this Applica-tion to Skadden, Arps’ assistance to the Debtors during the ApplicationPeriod generally was part of a collaborative effort with the Debtors’ otherretained professionals, including Weil, Gotshal & Manges LLP; Andrews &Kurth L.L.P.; Arnold & Porter; Batchelder & Partners, Inc.; The BlackstoneGroup, L.P.; Brobeck, Phleger & Harrison LLP; Cadwalader, Wickersham &

(continued...)

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19. The cornerstone of that plan was a merger agreement by and

among Enron, Dynegy, Inc. (“Dynegy”) and certain related parties, dated November

9, 2001 (the “Merger Agreement”). The Merger Agreement was intended to assure

Enron’s trading counterparties and the debt rating agencies that Enron was still an

investment grade credit risk because of its prospective merger with Dynegy.

However, Dynegy terminated the Merger Agreement, at which time Enron was

facing a severe liquidity crisis and faced the downgrade of its long-term debt rating

to below investment grade. Such a downgrade would have significantly undermined

one of Enron’s core businesses. At such time, the Debtors concluded that the

commencement of these Reorganization Cases was in the best interests of all

stakeholders.

20. The primary purpose of these Reorganization Cases has been

to provide the Debtors with protection from creditor action and to develop and

implement a comprehensive restructuring of the Debtors’ businesses, allowing the

Debtors’ to realign their capital structure and reposition their business.8

8 (...continued)Taft; Fergus, a law firm and Gary S. Fergus; Goodin, MacBride, Squeri,Ritchie & Day, LLP; Kelley Drye & Warren LLP; LeBoeuf, Lamb, Greene &Bacrae, LLP; Miller Thomson LLP; PricewaterhouseCoopers LLP; SusmanGodfrey L.L.P.; Togut, Segal & Segal LLP; and Wilmer, Cutler & Pickering.

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21. During the Application Period, the Debtors have accomplished

numerous objectives as part of their overall restructuring strategy. Among other

things, the Debtors have obtained financing to fund the Reorganization Cases and

have taken significant steps, with the assistance of their professional advisors, to

identify non-essential core assets and pursue the disposition of such assets. For

example, during the Application Period, the Debtors entered into an agreement with

UBS Warburg, the investment banking group of UBS AG, regarding Enron’s North

American gas and electric trading operation and entered into an agreement to sell the

wind turbine manufacturing assets of Enron Wind Corp. to the Power Systems

business of General Electric Company, as well as rejecting numerous executory

contracts, disposing of certain other non-core assets, and taking other significant

steps in their restructuring process.

REQUESTED FEES AND REIMBURSEMENT OF DISBURSEMENTS

22. As discussed herein, Skadden, Arps has played an important

role in assisting the Debtors with various transactional matters related to the Debtors’

activities, including their efforts regarding the disposition of certain non-core assets,

9 Skadden, Arps believes that the amounts requested in this Application arereasonable in relation to the services rendered. The amounts requested arealready reduced to reflect the client accommodations described herein. To

(continued...)

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and numerous investigations and regulatory matters involving branches and agencies

of the United States Government. As a result of its efforts during the Application

Period, Skadden, Arps now seeks interim allowance of (a) $6,082,477 in fees

calculated at the applicable guideline hourly billing rates of the Firm’s personnel

who have worked on the Reorganization Cases and (b) $496,121 in charges and

disbursements actually and necessarily incurred by Skadden, Arps while providing

services to the Debtors during the Application Period.

23. This Application reflects a voluntary reduction by Skadden,

Arps in connection with each monthly statement in the aggregate amount of

$666,250, and an additional voluntary reduction in connection with this Application

in the amount of $121,111 to reflect, among other things, the elimination of all fees

related to most timekeepers billing less than $5,000 during the Application Period.

Accordingly, including the voluntary client accommodations in connection with each

monthly statement, Skadden, Arps is voluntarily reducing its fees by $750,156, or

approximately 10.9%, and its charges and disbursements by $37,205, or approxi-

mately 7.0%, for a total reduction of $787,361 for items Skadden, Arps normally

would bill its clients.9

9 (...continued)the extent that a party objects to this Application, Skadden, Arps reserves theright to recapture such client accommodations and seek up to the full amountof fees actually incurred in connection with this engagement.

10 Exhibit D contains a table of all matter numbers used in these cases, as wellas a description of certain business statistics of Skadden, Arps in these cases.

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SUMMARY OF SERVICES RENDERED BYSKADDEN, ARPS DURING THE APPLICATION PERIOD

24. During the Application Period, Skadden, Arps worked closely

with the Debtors, Section 327(a) General Counsel, and the Debtors’ other profes-

sional advisors to implement the strategies described above to maximize the value of

the Debtors’ estates. As discussed herein, these services have been directed toward

the myriad tasks necessary to achieve this result.

25. The amounts requested by this Application compare favorably

to fees, charges and disbursements incurred by other chapter 11 debtors in cases of

similar size, complexity and duration.

26. At the commencement of the Reorganization Cases, Skadden,

Arps created twenty-eight (28) different matter numbers or subject matter categories,

which are in accordance with the Guidelines, to which its professionals assigned the

time billed by them, all of which are related to the tasks performed by Skadden, Arps

on behalf of the Debtors.10 All Skadden, Arps professionals kept a contemporaneous

record of time spent rendering such services and, consistent with the Guidelines,

11 Pursuant to the Fee Procedures Order, Skadden, Arps’ monthly statements forthe months of December 2001 and January 2002 are combined in onemonthly statement. Additionally, pursuant to a request of the Office of theUnited States Trustee in another large chapter 11 case pending in this district,Skadden, Arps has reformatted its Monthly Statements attached to thisApplication as Exhibit E to organize each matter chronologically, rather thanorganizing each matter chronologically by timekeeper.

17

separated tasks in billing increments of one-tenth (0.10) hour. The December

through March Monthly Statements,11 separated by matter number, are attached

hereto as Exhibit E. All of the services performed by Skadden, Arps have been legal

in nature and necessary for the proper administration of the Reorganization Cases.

27. During the Application Period, Skadden, Arps devoted

approximately 67% of its time to the following two matters and incurred in excess of

$500,000 for each such matter: Regulatory/Investigative Matters (Congressional)

and Regulatory/Investigative Matters (Federal – Non-FERC).

28. Skadden, Arps devoted approximately 28% of its time during

the Application Period to the following six matters and incurred between $100,000

and $500,000 for each such matter: Asset Dispositions (Power); Advice – General

Corporate and Board of Directors; Retention/Fee Matters (SASM&F); Tax Matters;

Nonworking Travel Time; and Project Advice/Transactions (Non-Debtor Busi-

nesses).

18

29. Skadden, Arps devoted the remainder of its time to the

following eight matters and incurred less than $100,000 for each such matter: Case

Coordination/Administration with General Bankruptcy Counsel; Litigation Mat-

ters/Coordination (General); Regulatory/Investigative Matters (State and Local);

Litigation Matters/Coordination (Non-Debtor Businesses); Financing Matters

(Debtor Entities); Employee/Labor Matters; Asset Dispositions (General); and

Regulatory/Investigative Matters (Non-Debtor Businesses).

MATTERS OVER $500,000

A. Regulatory/Investigative Matters (Congressional)

30. During the Application Period, Skadden, Arps has devoted

substantial time and effort to providing advice and guidance to the Debtors with

respect to numerous investigations (the “Congressional Investigations”) by the One

Hundred and Seventh Congress of the United States (the “Congress”). Skadden,

Arps has been the Debtors’ primary advisor with respect to the Congressional

Investigations and the Firm has provided significant assistance to the Debtors in

understanding and responding to such investigations.

31. Skadden, Arps’ work under this matter has encompassed a

broad range of activities to aid the Debtors in responding to the ever-expanding

number of Congressional Investigations. In the early stages of the Reorganization

Cases, Skadden, Arps attorneys closely monitored the developments of many

19

Congressional committees, frequently by attending hearings of relevant committees

and meeting with Congressional staff. Skadden, Arps attorneys also assisted the

Debtors’ in-house attorneys in analyzing the early Congressional document requests

and providing initial responses. Throughout the Application Period, Skadden, Arps

attorneys also advised the Debtors concerning public relations issues related to the

Congressional Investigations.

32. Skadden, Arps’ involvement in the management of the

Debtors’ in-house document production process has been significant. As such,

Skadden, Arps aided in the organization of and has provided extensive support to the

Debtors’ document Response and Production Team (the “RAP Team”), which is

directly responsible for producing documents to Congress, Congressional commit-

tees and the many other federal agencies that are investigating the Debtors.

33. Skadden, Arps also has worked closely with the RAP Team to

assist them in producing documents to governmental entities in a timely manner. In

order to handle the significant document production needs created by the many

Congressional and other investigations progressing concurrently, Skadden, Arps

personnel have aided the RAP Team in streamlining their document review processes

and optimizing their use of relevant computer systems. These efforts have assisted

the Debtors in developing an efficient and cost-effective process for producing

documents to the various requesting entities on a timely basis.

20

34. Attorneys from Skadden, Arps also have assisted the Debtors

with respect to other aspects of the Congressional Investigations. For example,

Skadden, Arps attorneys have represented the Debtors in connection with various

interviews of current and former employees of the Debtors by several different

Congressional staff members relating to benefits, compensation and retirement plan

issues. Skadden, Arps also has prepared witnesses for and attended Congressional

hearings involving testimony by current and former employees on those and other

issues.

35. In addition, Skadden, Arps has dedicated significant time and

effort assisting the Debtors regarding tax investigations being conducted by the

Senate Committee on Finance and the Joint Committee on Taxation (collectively, the

“Congressional Committees”). The Congressional Committees seek to review

federal tax returns and related information and employee benefit and compensation

programs of the Debtors and related non-Debtor entities. As part of their investiga-

tion, the Congressional Committees have made requests to the Debtors for the

production of voluminous documents.

36. In response, Skadden, Arps attorneys researched numerous

issues and entered into extensive negotiations with the Congressional Committees

regarding disclosure of the documents and information that they desired. These

negotiations culminated in a disclosure agreement between the Congressional

21

Committees and Enron which was executed on March 7, 2002 (the “Disclosure

Agreement”).

37. The Congressional Committees have made various inquiries

and document requests under the Disclosure Agreement, and Skadden, Arps has

provided significant assistance to the Debtors in identifying and producing relevant

documents in response to such inquiries and requests. The initial group of docu-

ments requested pursuant to the Disclosure Agreement was produced to the Congres-

sional Committees on April 5, 2002. The compilation and production of further

responsive documents by the Debtors, with the assistance of Skadden, Arps, is

ongoing.

38. In addition, paraprofessionals at Skadden, Arps were responsi-

ble for obtaining information and monitoring all developments involving the

Congressional Investigations. On a daily basis, Skadden, Arps personnel monitored

all Enron-related actions, announcements, public hearings, statements and legislation

by various committees of the United States House of Representatives, including the

following: Agriculture; Education and Workforce; Energy and Commerce; Financial

Services; Government Reform; Judiciary; Resources; Transportation and Infrastruc-

ture; and Ways and Means. Paraprofessionals also monitored similar developments

with respect to several committees of the United States Senate, including the

following: Agriculture; Banking; Housing and Urban Affairs; Commerce; Science

22

and Transportation; Energy and Natural Resources; Finance; Governmental Affairs;

Health, Education, Labor and Pensions; and Judiciary.

39. Further, Skadden, Arps paraprofessionals were responsible for

obtaining testimony and transcripts from hearings on the Congressional Investiga-

tions, maintaining calendars of relevant dates regarding the Congressional Investiga-

tions and maintaining files of materials relating to the Debtors issued by members of

Congress or Congressional committees. Briefing materials regarding Congressional

developments were prepared and distributed on a frequent basis in order to keep

Skadden, Arps attorneys informed about the progress of recent developments.

40. In connection with the foregoing services, Skadden, Arps

professionals expended 7,228.3 hours for which Skadden, Arps seeks compensation

of $2,778,134. An itemized breakdown of the services rendered to the Debtors is

attached as Exhibit E-1. A general breakdown of these services is as follows:

NAMES HOURS VALUE

Robert S. Bennett 446.6 $310,387

Carl S. Rauh 420.4 $292,178

David J. Goldstone 479.6 $206,228

Nancy J. McGlynn 362.7 $170,469

Ivan A. Schlager 336.6 $158,202

Lynn R. Coleman 263.1 $152,598

Saul M. Pilchen 272.2 $148,349

23

Susan K. Declercq 440.1 $145,233

Vincent P. Schmeltz, III 344.1 $130,758

Mark R. Filip 224.9 $111,326

Peter A. Atkins 154.8 $107,586

Lee P. Garner 212.4 $88,146

J. Phillip Adams 102.8 $71,446

Erik Elsea 181.8 $66,357

Fred T. Goldberg, Jr. 80.6 $56,017

Armando Gomez 126.2 $52,373

Douglas W. Swalina 98.8 $36,062

Suzanne D. Strater 92.0 $34,960

Steven J. Cleveland 82.0 $29,930

John M. Beahn 41.2 $15,038

Justin L. Heather 50.3 $11,569

Randall G. Reese 33.9 $7,797

Rahman J. Harrison 21.3 $6,284

Martin Klepper 6.7 $4,355

Kenneth A. Gross 5.8 $3,654

David E. Carney 10.7 $3,531

Jessica A. Hough 7.1 $2,698

Troy L. Olsen 7.1 $2,592

Timothy P. Olson 5.6 $2,212

John Wm. Butler, Jr. 1.4 $973

24

Paraprofessionals 2,315.5 $348,827

TOTAL 7,228.3 $2,778,134

B. Regulatory/Investigative Matters (Federal – Non-FERC)

41. During the Application Period, the Debtors required Skadden,

Arps’ assistance in monitoring and responding to various regulatory and investiga-

tive matters related to various federal governmental entities. Time spent on such

matters which was not related to investigations or regulatory inquiries by the

Congress or the Federal Energy Regulatory Commission was billed to this matter.

The work completed during the Application Period has been in response to a number

of different investigations, the most significant of which are detailed below.

42. Skadden, Arps has devoted substantial time to advising the

Debtors with respect to matters relating to governmental investigations of its tax-

qualified retirement and savings plans (the “Tax-Qualified Plans”) and other benefit

arrangements (collectively with the Tax-Qualified Plans, the “Benefit Plans”). At the

outset of the Reorganization Cases, Skadden, Arps devoted considerable effort to the

development and investigation of the relevant facts. As part of this process,

Skadden, Arps professionals reviewed applicable documentation and interviewed

numerous witnesses. Skadden, Arps attorneys also devoted significant time and

effort to the negotiation of separate agreements with the DOL and State Street Bank

and Trust Company (“State Street”). These agreements, including proposed amend-

25

ments thereto, related to the terms and conditions under which the Debtors consented

to the removal of the existing fiduciaries responsible for Tax-Qualified Plans and the

appointment of State Street in their place. The agreements also required the comple-

tion of additional subsidiary projects, such as the preparation of plan amendments

and communications to affected parties.

43. Skadden, Arps’ work with respect to the Debtors’ Benefit

Plans also required the completion of a variety of other related assignments. The

most significant of the myriad tasks included preparing witnesses for testimony

before governmental bodies, monitoring other testimony relating to the Benefit

Plans, coordinating document production in response to subpoenas from the DOL

and other governmental entities and responding to numerous requests from the

Debtors’ legal and human resources employees for information and advice relating to

the operation of the Benefit Plans in light of the pending governmental investiga-

tions. As part of these services, Skadden, Arps also assisted the Debtors by coordi-

nating and overseeing on-site visits by representatives of the DOL in connection with

document production to the DOL.

44. Skadden, Arps also provided the Debtors with significant

assistance in investigating and responding to allegations made by former employees.

For example, Skadden, Arps attorneys researched certain allegations made regarding

the business practices of Enron Energy Services (“EES”). In the process, attorneys

26

from Skadden, Arps completed extensive interviews of relevant current and former

employees of EES and the Debtors and other factual due diligence.

45. Skadden, Arps also has provided the Debtors with a great deal

of support in coordinating an investigation into alleged document shredding occur-

ring at the Debtors’ headquarters. This assistance culminated in an FBI search of the

Debtors’ headquarters. Skadden, Arps professionals aided the Debtors by facilitating

the FBI in conducting their search as quickly and with as little disruption to the

Debtors’ business operations as possible. Skadden, Arps also advised the Debtors

regarding issues such as providing guidance to employees, preserving documents and

responding to numerous FBI document requests. Attorneys from Skadden, Arps

worked in conjunction with FBI personnel during their search to protect the Debtors’

interests by avoiding any direct review of privileged documents.

46. Skadden, Arps also has assisted the Debtors in responding to

document requests from the Commodity Futures Trading Commission (the “CFTC”)

and the Department of Justice (the “DOJ”). Skadden, Arps attorneys have assisted

the Debtors’ employees in locating, reviewing and producing responsive documents

to the CFTC’s and the DOJ’s subpoenas and document requests. Such assistance has

required Skadden, Arps to provide extensive advice to the Debtors’ in-house legal

counsel with respect to investigatory processes.

27

47. At the Debtors’ request, Skadden, Arps also assisted the

Debtors with respect to due diligence focusing on several matters related to one of

their non-Debtor subsidiaries. These matters primarily dealt with such subsidiary’s

business operations, the amendment of certain contracts with significant customers,

and certain human resources issues.

48. Skadden, Arps personnel devoted significant time and effort to

conducting an extensive review of the issues referenced above, necessitating travel

by certain Skadden, Arps professionals to the non-Debtor subsidiary’s corporate

headquarters. As part of the due diligence, Skadden, Arps attorneys conducted

interviews of more than fifteen current and former employees of the non-Debtor

subsidiary and reviewed numerous documents.

49. Finally, during the Application Period, Skadden, Arps

attorneys also assisted and advised the Debtors concerning inquiries made and

investigations or proceedings initiated by various other governmental agencies,

including the SEC, the Federal Communications Commission, the Internal Revenue

Service and the Pension Benefit Guaranty Corporation. In connection with these

matters, Skadden, Arps has assisted the Debtors with responding to subpoenas,

producing documents responsive to the inquiries, and providing testimony before

certain of such agencies.

28



of $1,282,443. An itemized breakdown of the services rendered to the Debtors is


NAMES HOURS VALUE

Michael R. Bergman 280.1 $128,846


Maria E. Douvas 251.5 $91,798




Mark R. Filip 143.3 $70,934

Phillip McBride Johnson 97.9 $68,041

Keith D. Krakaur 116.5 $67,570



Lee P. Garner 139.0 $57,685

Carl S. Rauh 72.9 $50,666

Stuart N. Alperin 63.8 $44,341



John Wm. Butler, Jr. 34.6 $24,047


29

Jerome S. Hirsch 32.5 $22,588

David E. Carney 61.8 $20,394


Troy L. Olsen 25.8 $9,417

Erich T. Schwartz 18.9 $8,883


John C. Quale 10.1 $6,565


Alan Kriegel 3.8 $2,394

Martin Klepper 1.2 $780

Paraprofessionals 159.8 $20,937

TOTAL 2,911.6 $1,282,443

MATTERS OVER BETWEEN $100,000 AND $500,000

C. Asset Dispositions (Power)

51. During the Application Period, Skadden, Arps professionals

devoted time to assisting the Debtors in addressing and resolving certain issues

relating to the exit of certain of the Debtors’ businesses and sales of non-core assets.

Time spent working on the sale of assets relating to the Debtors’ power businesses

was billed to this matter. Skadden, Arps represented the Debtors with respect to

assets in three primary locales – Germany, Guam and the Philippines.

52. Skadden, Arps has spent a substantial amount of time during

the Application Period inquiring into certain issues arising out of sales transactions

30

entered into one of the Debtors’ indirect subsidiaries, at the request of the Board of

Directors of Enron. Skadden, Arps attorneys have conducted a comprehensive

review with respect to those issues in the context of matters under governmental

investigation, which has included an examination of significant transactional

documents and numerous interviews with key personnel.

53. Skadden, Arps attorneys also directed their attention to a

review of certain transactional opportunities with respect to business operations and

assets located in Guam. Skadden, Arps provided advice with respect to a contem-

plated transactions with respect to the Debtors’ interest in a limited liability com-

pany, which required Skadden, Arps attorneys to complete due diligence and

research regarding certain issues arising in the negotiation of those possible deals.

54. Finally, Skadden, Arps also advised the Debtors and certain of

their non-Debtor affiliates with respect to a potential transfer of two power stations

located in the Philippines (the “Philippine Transaction”). In that process, Skadden,

Arps attorneys coordinated closely with the relevant Enron entities, their other

professionals and third parties to evaluate the Philippine Transaction and conducted

extensive diligence of the business operations and researched numerous issues

related to, among others, securities and corporate law questions. Further, Skadden,

Arps negotiated the terms of and drafted documents necessary for the consummation

of the Philippine Transaction. In addition, Skadden, Arps also advised the Debtors

31

on strategies for the repayment of certain loans and notes related to these two power

stations.



of $472,191. An itemized breakdown of the services rendered to the Debtors is


NAMES HOURS VALUE

Martin Ziessler 213.1 $84,175

Anand S. Raman 157.7 $65,444

Alan G. Schiffman 92.0 $59,800

Erik Elsea 147.8 $53,947


Ralph L. Stengren 92.9 $35,302

Amr Razzak 85.6 $33,812

Ingo Scholz 88.5 $32,302


Ferdinand Von Rom 33.8 $13,351

Jonathan B. Stone 11.9 $6,486


Erich T. Schwartz 2.1 $987


TOTAL 1,086.8 $472,191

32

D. Advice – General Corporate and Board of Directors

56. During the Application Period, attorneys at Skadden, Arps

have been intimately involved in numerous issues relating to the operation and

management of the Debtors’ business and corporate governance issues the Debtors

faced. Skadden, Arps also facilitated the prompt resolution by the Debtors of a

number of general corporate issues surrounding the commencement of the Debtors’

chapter 11 cases and the financial and business strategies associated therewith.

57. In connection with the filing of the Reorganization Cases,

Skadden, Arps provided advice to the Debtors and their boards of directors concern-

ing various regulatory filings and financial reporting obligations with the SEC,

including the preparation of various public filings.

58. Skadden, Arps professionals also assisted the Debtors and

Enron’s Board of Directors with addressing various corporate governance matters.

Such assistance included (a) attending several Board of Directors meetings and

drafting minutes with respect thereto, (b) providing advice to the compensation,

executive and restructuring committees of Enron’s Board of Directors with respect to

various issues, and (c) advising the Debtors on various other corporate governance

planning matters.

59. Skadden, Arps also advised the Debtors concerning the

Debtors’ development of a director selection protocol to be utilized in connection

33

with the Debtors’ selection of new members for Enron’s Board of Directors. Finally,

Skadden, Arps advised the Debtors and Enron’s Board of Directors concerning the

Debtors’ consideration and selection of a turnaround candidate to guide the Debtors

through their restructuring.


professionals expended 604.1 hours for which Skadden, Arps seeks compensation of

$347,868. An itemized breakdown of the services rendered to the Debtors is


NAMES HOURS VALUE



D. Jan Baker 30.3 $21,059


Michael R. Bergmann 36.7 $16,882

Lynn R. Coleman 27.2 $15,776

Erich T. Schwartz 33.1 $15,557

KI P. Hong 30.7 $14,429

Eric L. Cochran 15.5 $9,765

Carl S. Rauh 12.3 $8,549


Melissa F. Levine 15.2 $5,776

Thomans W. Greenberg 11.7 $5,031

34




Jonathan J. Lerner 3.9 $2,711


Erik Elsea 6.4 $2,336

Timothy P. Olson 1.7 $672

Maria E. Douvas 1.7 $621

David J. Goldstone 1.2 $516

Suzanne D. Strater 1.2 $452


TOTAL 604.1 $347,868

E. Retention/Fee Matters SASM&F

61. At the commencement of the Reorganization Cases, the

Debtors retained various professionals to advise the Debtors and their non-Debtor

affiliates during the Reorganization Cases. Skadden, Arps assisted with the prepara-

tion of appropriate documentation and pleadings to assist the Debtors with their

retention of Skadden, Arps. Skadden, Arps also prepared a response to the limited

objection by the Wiser Oil Company to Skadden, Arps’ retention as counsel to Enron

North America Corp.

62. In connection with its retention by the Debtors, Skadden, Arps

disclosed that it is currently representing various clients in matters related to the

35

Debtors (the “Other Matters”), but unrelated to the matters for which Skadden, Arps

is retained as special counsel in the Reorganization Cases (the “Special Counsel

Matters”). After consultation with the United States Trustee, Skadden, Arps devoted

time to establishing formal screening procedures to ensure that there are no commu-

nications or exchanges of confidences, secrets or material non-public knowledge

concerning such matters. Information regarding these formal screening procedures

was subsequently distributed to all Skadden, Arps personnel working on either the

Other Matters or the Special Counsel Matters.

63. Also in connection with its retention as special counsel to the

Debtors, Skadden, Arps conducted an extensive relationship search prior to being

retained. After being retained, Skadden, Arps supplemented its initial search results

as additional relevant entities were identified to Skadden, Arps by the Debtors or

Section 327(a) General Counsel and as additional entities filed notices of appearance

in the Reorganization Cases. To date, Skadden, Arps has searched its client data-

bases with respect to over 1,900 entities related to the Reorganization Cases. During

the Application Period, Skadden, Arps also supplemented its initial search results

through the distribution of a questionnaire to the Firm’s approximately 1,700

attorneys worldwide. Based on the results of the supplemental relationship searches

and the distribution of the questionnaire, Skadden, Arps prepared and filed two

supplemental affidavits disclosing such results during the Application Period.

36





NAMES HOURS VALUE




Randall G. Reese 192.4 $44,252

D. Jan Baker 36.7 $25,507

Keith A. Simon 39.4 $13,002

Gary W. Katz 20.8 $8,632


Carl S. Rauh 3.2 $2,224


TOTAL 802.5 $329,907

F. Tax Matters

65. Skadden, Arps has provided the Debtors with assistance in

responding to issues arising with the Internal Revenue Service (the “IRS”) during the

Application Period. Early in the Application Period, Skadden, Arps advised the

Debtors in developing a strategic plan for responding to the IRS and issues related to

37

IRS audits of the Debtors. This process required Skadden, Arps to coordinate with

appropriate personnel of the Debtors and to review those transactions and operations

of the Debtors in question.

66. In addition, the IRS has made numerous information docu-

ment requests to the Debtors. Skadden, Arps has assisted the Debtors in reviewing

such requests and locating responsive documents and researching legal issues related

thereto. Skadden, Arps and the Debtors have provided the IRS with responses to

certain of the requests and continue to work on responding to the remaining requests.





NAMES HOURS VALUE


Jessica A. Hough 96.3 $36,594

Romina Weiss 54.3 $24,978

Fed T. Goldberg, Jr. 30.7 $21,337

Armando Gomez 26.2 $10,873

TOTAL 401.2 $228,403

38

G. Nonworking Travel Time


were required to travel to attend meetings with the Debtors’ senior management and

to represent the Debtors with respect to witness testimony in connection with various

governmental investigations. Skadden, Arps professionals also were required to

travel to provide assistance to the Debtors as requested in other locations throughout

the United States and abroad, including at the Debtors’ corporate headquarters in

Houston, Texas. Skadden, Arps professionals allocated time spent traveling but not

otherwise working to a separate billing matter.



of $207,919, which amount reflects a fifty percent (50%) reduction from Skadden,

Arps’ guideline hourly rates. An itemized breakdown of the services rendered to the

Debtors is attached as Exhibit E-7. A general breakdown of these services is as

follows:

NAMES HOURS VALUE





39


Mark R. Filip 44.6 $11,039



Anand S. Raman 39.9 $8,279

Erik Elsea 42.7 $7,793


Carl S. Rauh 19.5 $6,776


Michael R. Bergman 28.5 $6,555


Lee P. Garner 29.9 $6,204



Maria E. Douvas 21.6 $3,942


Martin Ziessler 19.5 $3,851




Jerome S. Hirsch 5.7 $1,981

Lance T. Brasher 4.5 $1,159

Ingo Scholz 5.0 $913

Kenneth A. Gross 1.3 $410

40

Armando Gomez 1.0 $208


TOTAL 1,040.0 $207,919

H. Project Advice/Transactions (Non-Debtor Businesses)

70. Skadden, Arps devoted significant time during the Application

Period to advising the Debtors with respect to issues and transactions involving

certain non-Debtor affiliates of Enron. Timekeepers recording time to this matter

separately allocated their time among various sub-matters, including: Dabhol Power

Company; DPC Political Risk Insurance; TGS Political Risk Insurance; and Vengas.

71. One such non-Debtor affiliate was Dabhol Power Company

(“Dabhol”). Skadden, Arps attorneys provided advice regarding various issues under

certain financing documents and a proposed transaction involving Dabhol. This

included advice regarding securities and other issues, including assisting the Debtors

with responses to certain court orders obtained by those secured lenders which

enjoined Dabhol from filing for bankruptcy protection and appointed a receiver for

Dabhol’s assets. These issues required Skadden, Arps attorneys to draft and review

numerous documents, conduct due diligence and participate in daily conference calls,

involving other legal counsel and personnel of Dabhol, during the Application

Period.

41

72. Skadden, Arps also advised the Debtors regarding certain

insurance policies held by their non-Debtor affiliates. In particular, Skadden, Arps

was asked to provide guidance regarding the ability of Enron or its affiliates to make

a claim under any of multiple political risk insurance policies due to certain events

arising in Argentina. In response, Skadden, Arps attorneys in multiple offices

reviewed the relevant insurance policies and researched appropriate foreign legal

provisions governing the terms of those policies to provide advice to the Debtors.

Finally, Skadden, Arps advised the Debtors concerning an investigation in Venezuela

involving a non-Debtor subsidiary.





NAMES HOURS VALUE

George H. Windecker, Jr. 129.9 $55,857

Lance T. Brasher 89.7 $46,196


Jeffrey S. Christie 27.7 $16,066

James Hope 27.2 $11,696


Alan G. Schiffman 7.6 $4,940

42

Saul M. Pilchen 1.0 $545

Paraprofessionals 3.5 $647

TOTAL 327.2 $161,623

MATTERS LESS THAN $100,000

I. Case Coord./Admin. with General Bankruptcy Counsel

74. Skadden, Arps also devoted resources to the efficient and

expeditious administration of these Reorganization Cases and to coordination with

Section 327(a) General Counsel and other counsel to the Debtors during the Applica-

tion Period. Work performed under this category generally may be grouped as

follows: (a) coordination with other professionals; (b) advice with respect to the

administration of the Reorganization Cases; and (c) general case administration.

75. Skadden, Arps attorneys have consistently strived to coordi-

nate their efforts and, more generally, the efforts of the Firm on behalf of the Debtors

with the Debtors’ other professionals. In particular, Skadden, Arps has worked

closely with Section 327(a) General Counsel to harmonize our joint representation of

the Debtors, including participation in periodic status conferences with Section

327(a) General Counsel and other of the Debtors’ professionals to coordinate the

efforts of all estate professionals in providing advice and assistance to the Debtors.

Where appropriate, Skadden, Arps and the Debtors’ other professionals have divided

tasks to avoid unnecessary duplication of our efforts. In so doing, Skadden, Arps has

43

attempted to ensure that these highly-complex cases are administered as efficiently

and economically as possible.

76. Furthermore, Skadden, Arps attorneys have performed other

case management functions. Skadden, Arps attorneys have reviewed various public

documents and pleadings to remain current on the status of the Reorganization Cases

in order to be best able to coordinate Skadden, Arps’ representation of the Debtors.

In addition, Skadden, Arps attorneys have attended meetings with and had various

other contacts with the Debtors’ management and the Committee with regards to

Skadden, Arps’ representation of the Debtors, as it relates to the Debtors’ other

professionals. Skadden, Arps attorneys also have advised the Debtors and Section

327(a) General Counsel as to the retention of other professionals, both in the

ordinary course and in direct relation to the Reorganization Cases.

77. Additionally, Skadden, Arps paraprofessionals maintained, on

a daily basis, various files critical to enable Skadden, Arps to promptly address

numerous issues that arose during the Application Period. Skadden, Arps kept an

index of and docketed all pleadings and orders filed in the Reorganization Cases and

kept detailed calendars of future events in both the Reorganization Cases and other

relevant litigation. The efficient management of administrative matters in a paper-

intensive case of this size is a significant task, as the Debtors are inundated with

numerous items of correspondence, documents, requests, pleadings and other papers.

44

Skadden, Arps has devised and implemented the policies detailed above to cost-

effectively manage and coordinate their involvement in the cases on behalf of the

Debtors.



$87,260. An itemized breakdown of the services rendered to the Debtors is attached

as Exhibit E-9. A general breakdown of these services is as follows:

NAMES HOURS VALUE




Carl S. Rauh 9.3 $6,464


D. Jan Baker 4.0 $2,780

Phillip McBride Johnson 1.5 $1,043


Randall G. Reese 1.9 $409

Keith A. Simon 1.0 $330


TOTAL 339.4 $87,260

45

J. Litigation Matters/Coordination (General)

79. The Debtors face significant actual and potential litigation on

a variety of fronts. To that end, Skadden, Arps created several matters relating to

such litigation. Time spent working on issues related to actual or threatened litiga-

tion which did not relate to insurance coverage matters or the Debtors’ non-Debtor

affiliates was billed to this matter.

80. Early in the Application Period, substantial time was devoted

to the development of a general litigation and investigation strategy. Skadden, Arps

attorneys participated in numerous meetings and teleconferences in order to develop

a coherent strategy in concert with the Debtors’ management and the Debtors’ other

professionals generally and Section 327(a) General Counsel in particular. Due to the

extreme notoriety of these Reorganization Cases and certain litigation issues related

to the Reorganization Cases, the Debtors and Skadden, Arps were inundated with

requests by various parties-in-interest and the media. This necessitated certain of

Skadden, Arps’ attorneys to devote time to coordinating a public relations strategy

with the Debtors and responding to media inquiries.

81. Skadden, Arps attorneys also devoted time to researching

numerous issues at the request of the Debtors. The majority of the issues revolved

around or were in response to: (a) Enron’s complaint against Dynegy, filed with this

Court on the Petition Date; (b) complaints brought against Enron under the Em-

46

ployee Retirement Income Security Act (“ERISA”); and (c) certain corporate

governance issues. These issues included, without limitation, issues related to the

fiduciary duty of directors as it relates to ERISA, removal of litigation filed in other

venues to the Bankruptcy Court for the Southern District of New York, and potential

defenses to ERISA litigation. Skadden, Arps professionals also drafted numerous

memoranda and other necessary documents concerning the various of the issues

researched during the Application Period.





NAMES HOURS VALUE

Jonathan J. Lerner 31.6 $21,962

Scott D. Musoff 41.1 $17,673

Beverly A. Farrell 69.8 $16,054



David J. Gladstone 2.0 $860

TOTAL 169.3 $73,785

47

K. Regulatory/Investigative Matters (State and Local)

83. Prior to the Petition Date, Skadden, Arps provided the Debtors

with assistance in responding to various investigations by state and local governmen-

tal entities. This assistance continued during the Application Period. In particular,

Skadden, Arps professionals provided legal services to the Debtors with respect to

inquiries made by certain state or local governmental agencies. In connection

therewith, Skadden, Arps attorneys participated in frequent conferences with

members of the Debtors’ management, other counsel of the Debtors, and representa-

tives of the governmental agencies, undertook legal research on various issues of

state and federal law relating to the inquiries and assisted the Debtors with producing

documents regarding the inquiries.





NAMES HOURS VALUE


Robert J. Del Tufo 20.8 $14,040



48



TOTAL 72.9 $44,812

L. Litigation Matters/Coordination (Non-Debtor Businesses)

85. Skadden, Arps devoted time and resources during the Applica-

tion Period to defending claims raised in litigation related to certain non-Debtor

affiliates of Enron. The work billed under this matter principally relates to a suit

involving Enron Power Corporation (“EPC”). Skadden, Arps attorneys, at the

Debtors’ request, gathered factual information relating to the substance of the

relevant transactions at issue in the lawsuit and completed extensive interviews with

current and former employees and legal counsel of EPC. In addition, Skadden, Arps

attorneys researched various legal issues concerning the lawsuit and drafted a motion

to dismiss the complaint during the Application Period, which was filed on or about

April 23, 2002.





49

NAMES HOURS VALUE

Lanelle K Meidan 69.8 $23,034

Lee P. Garner 24.2 $10,043

Mark R. Filip 11.3 $5,594

TOTAL 105.3 $38,671

M. Financing Matters (Debtor Entities)

87. Skadden, Arps has assisted the Debtors in their efforts to

procure postpetition financing. At the request of the Debtors, Skadden, Arps worked

with the Debtors’ senior management, Section 327(a) General Counsel and certain of

the Debtors’ prepetition lenders to structure and negotiate the terms of a financing

arrangement to fund the Reorganization Cases and the Debtors’ ongoing operations.





NAMES HOURS VALUE

Jena Q. Bridges 23.5 $8,930

TOTAL 23.5 $8,930

50

N. Employee/Labor Matters

89. During the Application Period, Skadden, Arps worked with

the Debtors to help them address issues affecting the Debtors’ employees. Skadden,

Arps professionals assisted the Debtors in reviewing a fiduciary agreement and

researched issues relating to the affect of certain provisions of the Bankruptcy Code

on claims arising under ERISA.





NAMES HOURS VALUE


Gary W. Katz 5.2 $2,158

TOTAL 14.8 $8,830

O. Asset Dispositions (General)


devoted time to assisting the Debtors in addressing and resolving certain general

issues relating to the exit of certain of the Debtors’ businesses and sales of non-core

assets. Time spent working on asset dispositions outside of the Debtors’ broadband,

51

energy services or power businesses or the Debtors’ partnership and venture interests

was billed to this matter.

92. Skadden, Arps attorneys focused on various issues relating to

the Debtors’ wholesale trading operations and international matters and asset sales.

Additional efforts were directed toward the Debtors’ broader asset disposition plans.

To these ends, Skadden, Arps professionals attended meetings and court hearings

relating to asset dispositions and advised the Debtors’ management and the Debtors’

other professionals on related issues.





NAMES HOURS VALUE



Martin Klepper 1.0 $650

TOTAL 8.9 $6,141

P. Regulatory/Investigative Matters (Non-Debtor Businesses)

94. During the Application Period, Skadden, Arps assisted the

Debtors with respect to certain investigations concerning non-Debtor businesses,

52

including developing strategy with the Debtors for addressing such investigations

and conducting interviews of personnel from such businesses concerning various

matters.





NAMES HOURS VALUE

Mark R. Filip 9.8 $4,851


TOTAL 11.1 $5,560

RELIEF REQUESTED

96. In accordance with the Fee Procedures Order, Skadden, Arps

has submitted its December 2001 through March 2002 monthly statements, and

Skadden, Arps now submits this Application. Based on the Firm’s customary billing

practices, the Debtors ordinarily would be billed a total of $6,832,633 for fees and

$533,326 for charges and disbursements. In keeping with Skadden Arps’ commit-

ment to self-policing its fees, charges and disbursements, and based on various

accommodations to the Debtors, however, Skadden, Arps voluntarily reduced, as

part of its monthly fee statements, its fees by $629,045, or approximately 9.2%, and

53

its charges and disbursements by $37,205, or approximately 7.0%. As a result, the

actual amount billed to the Debtors was $6,203,588 for fees and $496,121 for

charges and disbursements. Moreover, as an additional accommodation, Skadden,

Arps has voluntarily reduced the amount sought in this Application by $121,111 to

reflect, among other things, the elimination of all fees related to any timekeeper

billing less than $5,000 during the Application Period. As a result, the actual amount

sought herein is $6,082,477 for fees and $496,121 for charges and disbursements.

This represents a total reduction of $750,156 (approximately 10.9%) for fees and

$37,205 (approximately 7.0%) for charges and disbursements from those amounts

that Skadden, Arps would customarily charge its clients.

97. The Fee Procedures Orders provide that to seek interim

compensation, professionals must submit monthly fee statements to the Debtors,

counsel for the Debtors, the United States Trustee, counsel for the Committee,

counsel to the Postpetition Secured Lenders, and the fee review committee. If no

objection to a monthly statement is made within fifteen (15) days after service, the

Debtors are authorized to pay eighty percent (80%) of the fees requested (with the

remaining twenty percent (20%) of the fees requested referred to herein as the

“Holdback”) and one-hundred percent (100%) of the charges and disbursements

requested. In accordance with the Fee Procedures Order, Skadden, Arps has submit-

ted monthly statements for each of the months covered by the Application Period.

12 Skadden, Arps maintains records of the time it expended in the rendition ofall professional services, which time records are made concurrently with therendition of professional services.

54

Accordingly, with respect to the monthly statements covering the Application

Period, after payment of the monthly statements, Skadden, Arps will have received

$4,962,871 on account of billed fees and $496,121 on account of billed charges and

disbursements and will have accrued a Holdback in the amount of $1,240,717. After

application of the additional client accommodations described in this Application in

the amount of $121,111 for, among other things, fees related to timekeepers that

billed less than $5,000 during the Application Period, Skadden, Arps is requesting

$1,119,606 in full settlement of the Holdback accrued through March 31, 2002.

98. Allowance of Professional Fees. During the Application

Period, attorneys and paraprofessionals at Skadden, Arps billed an aggregate of

15,146.9 hours reflected in this Application working on matters concerning the

Debtors’ reorganization case.12 Of such time spent, 4,396.2 hours were spent by

partners, 1,050.7 hours were spent by counsel, 6,779.9 hours were spent by associ-

ates and 2,920.1 hours were spent by paraprofessionals. A summary showing the

name and position of each such partner, counsel, associate and paraprofessional,

together with that person’s date of admission to the bar (as applicable), net hours

13 In addition, Exhibit D hereto sets forth the blended hourly rate and certainother business statistics associated with the Reorganization Cases.

55

during the Application Period and hourly billing rate, is provided at the front of this

Application.13

99. Reimbursement of Charges and Disbursements. As disclosed

in the Retention Application that the Court approved, it is Skadden, Arps’ standard

policy to charge its clients in all areas of practice for certain charges and disburse-

ments incurred in connection with such clients’ cases. However, under the bundled

rate structure as described in the Retainer Agreement, certain charges and disburse-

ments are not separately charged to clients. The charges and disbursements charged

to clients under the bundled rate structure include, among others, charges for

messenger services, photocopying, court fees, travel expenses, postage for large

mailings, long distance telephone, computerized legal research, investigative

searches, and other charges customarily billed by law firms.

100. During the Application Period, Skadden, Arps disbursed the

following sums for actual and necessary charges and disbursements in the rendition

56

of professional services in the Reorganization Cases, and requests that it be reim-

bursed therefor:

Charges and Disbursements Incurred

Travel Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $342,936Computer Legal Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $58,811Reproduction and Document Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . $36,203Courier, Express Delivery and Postage . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,676Telecommunications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,665Professional Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,296Outside Research Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,811Filing/Court Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,306Court Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $299UCC Research/Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $118

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $496,121

101. Exhibit F attached hereto provides documentation regarding

charges and disbursements incurred during the Application Period. The above

charges and disbursements are reasonable and are consistent with those incurred by

other bankruptcy practitioners in other large, complex chapter 11 reorganization

cases in this and other districts.

REASONABLENESS OF FEES, CHARGES AND DISBURSEMENTS

102. In accordance with the factors enumerated in 11 U.S.C. § 330

and applicable case law, the amount requested herein by Skadden, Arps is fair and

reasonable, given: (i) the nature of the Reorganization Cases, (ii) the novelty and

complexity of the Reorganization Cases, (iii) the time and labor required to represent

57

the Debtors effectively, (iv) the time limitations imposed by the Reorganization

Cases, (v) the nature and extent of the services rendered, (vi) Skadden, Arps’

experience, reputation and ability, (vii) the value of Skadden, Arps’ services and

(viii) the cost of comparable services other than in a case under title 11 of the United

States Code.

103. Nature, complexity and duration of the case. Skadden, Arps

has assisted the Debtors by employing a streamlined case management structure that

consisted of small, core teams and assigned various attorneys to other discrete tasks

to avoid the performance of duplicative or unnecessary work.

104. Experience of Skadden, Arps. The experience of Skadden,

Arps’ attorneys also has benefitted the estates. Skadden, Arps is among the largest

firms and has one of the largest restructuring groups in the country. As more fully

set forth in the Retention Application, Skadden, Arps’ restructuring attorneys and

attorneys from other practice areas have extensive knowledge and experience in

dealing with the multitude of fast-paced issues that arise in similar chapter 11

proceedings. Accordingly, Skadden, Arps’ depth of experience in chapter 11 matters

has insured that a number of pressing matters could be addressed promptly.

105. In addition, Skadden, Arps’ commitment to monitoring the

administrative expenses of the estates, including its own legal fees, has been a

constant element of its representation of the Debtors. Indeed, this emphasis has been

58

manifested in Skadden, Arps, careful review of its fees, charges and disbursements

and a voluntary client accommodation of nearly $790,000.

106. Comparable services. Skadden, Arps’ rates are consistent

with rates charged to other clients in non-bankruptcy matters. Moreover, its rate

structure was disclosed clearly in its Retention Application, which the Court ap-

proved and to which none of the major constituents objected.

107. The amounts sought by Skadden, Arps compare favorably to

fees, charges and disbursements incurred by other chapter 11 debtors in cases of

similar size, complexity and duration. Accordingly, the cost of comparable services

supports the Application, and the services performed during the Application Period

more than warrant the allowance of compensation, particularly in view of the results

achieved.

108. Compliance with Guidelines. Skadden, Arps believes that this

Application, together with the attachments hereto, substantially complies in all mate-

rial respects with the Guidelines. To the extent this Application does not comply in

every respect with the requirements of such guidelines, Skadden, Arps respectfully

requests a waiver for any such technical non-compliance.

109. Skadden, Arps requests that this Court deem the contents of

this Application to be sufficient for the purposes of satisfying the memorandum of

law requirement in Rule 9013-1(b) of the Local Rules for the United States Bank-

ruptcy Court for the Southern District of New York. The relief requested in this

Application presents no novel issues of law.

WHEREFORE, Skadden, Arps respectfully requests that the Court (a)

grant it an interim allowance of $6,082,477 as compensation for professional

services rendered as attorneys for the Debtors during the Application Period, plus

reimbursement of actual and necessary charges and disbursements incurred in the

sum of $496,121; (b) authorize and direct the Debtors to pay to Skadden, Arps the

amount of $1,119,606 in full settlement of the Holdback accrued through March 31,

2002; and (c) grant it such other and further relief as is just.

Dated: Chicago, IllinoisJune 14, 2002

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLPSpecial Counsel for Debtors andDebtors-in-Possession

/s/ John Wm. Butler, Jr.John Wm. Butler, Jr.Timothy P. OlsonSKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)333 West Wacker DriveChicago, Illinois 60606(312) 407-0700

- and -


EXHIBIT AJohn Wm. Butler, Jr.Timothy P. OlsonSKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)333 West Wacker DriveChicago, Illinois 60606(312) 407-0700

- and -


Special Counsel for Debtors and Debtors in Possession


---------------------------------------------------

In re


Debtors.

---------------------------------------------------

x:::::::x

Chapter 11

Case No. 01-16034 (AJG)


CERTIFICATION UNDER GUIDELINES FOR FEES ANDDISBURSEMENTS FOR PROFESSIONALS IN RESPECT OF

FIRST APPLICATION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOMLLP AND AFFILIATED LAW PRACTICE ENTITIES FOR

INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES

2

I, John Wm. Butler, Jr., hereby certify that:

1. I am an attorney at law admitted to practice pro hac vice

before this Court and a member of the law firm of Skadden, Arps, Slate, Meagher &

Flom (Illinois), and its affiliated law practices (collectively, “Skadden, Arps”),

special counsel for Enron Corp. (“Enron” or the “Company”) and certain of its

affiliates (the “Affiliate Debtors”), debtors and debtors-in-possession in the

above-captioned cases (Enron and the Affiliate Debtors collectively, the “Debtors”).

I am the professional designated by Skadden, Arps in respect of compliance with the

Amended Guidelines for Fees and Disbursements of Professionals in Southern

District of New York Bankruptcy Cases adopted by the Court on April 19, 1995 (the

“Local Guidelines”), and the United States Trustee Guidelines for Reviewing

Applications for Compensation and Reimbursement of Expenses Filed Under 11

U.S.C. § 330, adopted on January 30, 1996 (the “UST Guidelines” and, together with

the Local Guidelines, the “Guidelines”).

2. I make this certification in support of the application of

Skadden, Arps, dated June 14, 2002 (the “Application”), for interim compensation

and reimbursement of expenses for the period beginning December 2, 2001 and

ending March 31, 2002 (the “Compensation Period”), in accordance with the Local

Guidelines.

3

3. In respect of section B.1 of the Local Guidelines, I certify that:

(a) I have read the Application.

(b) To the best of my knowledge, information and beliefformed after reasonable inquiry, the fees and disbursements sought fall within theLocal Guidelines.

(c) Except to the extent that fees or disbursements areprohibited by the Guidelines, the fees and disbursements sought are billed at rates inaccordance with practices customarily employed by Skadden, Arps and generallyaccepted by Skadden, Arps’ clients and disclosed and approved in the RetentionApplication, including the bundled rate structure.

(d) In providing a reimbursable service, Skadden, Arpsdoes not make a profit on that service, whether the service is performed by Skadden,Arps in-house or through a third party.

4. In respect of section B.2 of the Local Guidelines, I certify that

Skadden, Arps has provided monthly statements of Skadden, Arps’ fees and dis-

bursements accrued during the previous month, by serving monthly statements

pursuant to the Fee Procedures Order (as defined in the Application) for the Applica-

tion Period.

5. In respect of section B.3 of the Local Guidelines, pursuant to

the Fee Procedures Order, I certify that copies of the Application are being provided

to (a) the Debtors, (b) counsel for the Debtors, (c) the Office of the United

4

States Trustee for this district, (d) counsel to the Committee, (e) counsel to the co-

administrative agents for the Debtors’ postpetition secured lenders under the Revolv-

ing Credit and Guaranty Agreement, and (f) the fee review committee.

Dated: Chicago, IllinoisJune 14, 2002

/s/ John Wm. Butler, Jr. John Wm. Butler, Jr.

EXHIBIT D

Matter Name Matter Number

Advice – General Corporate and Board of Directors 0001Affiliate Restructurings 0002Asset Dispositions (General) 0003Asset Dispositions (Broadband) 0004Asset Dispositions (Energy Services) 0005Asset Dispositions (Partnership and Venture Interests) 0006Asset Dispositions (Power) 0007Business Operations (Debtor Entities) 0008Business Operations (Non-Debtor Businesses) 0009Case Coord./Admin with General Bankruptcy Counsel 0010Disclosure Statement re Plan of Reorganization 0011Employee/Labor Matters 0012Financing Matters (Debtor Entities) 0013Financing Matters (Non-Debtor Businesses) 0014Litigation Matters/Coordination (General) 0015Litigation Matters/Coordination (Insurance Recovery) 0016Litigation Matters/Coordination (Non-Debtor Businesses) 0017Nonworking Travel Time 0018Project Advice/Transactions (Debtor Entities) 0019Project Advice/Transactions (Non-Debtor Businesses) 0020Regulatory/Investigative Matters (Congressional) 0021Regulatory/Investigative Matters (Federal – FERC) 0022Regulatory/Investigative Matters (Federal – Non-FERC) 0023Regulatory/Investigative Matters (State and Local) 0024Regulatory/Investigative Matters (Foreign) 0025Regulatory/Investigative Matters (Non-Debtor Businesses) 0026Retention/Fee Matters (SASM&F) 0027Tax Matters 0028

SKADDEN, ARPS BUSINESS STATISTICSAND SUMMARY OF ATTORNEY TIME

FOR THE APPLICATION PERIODDecember 2, 2001 to March 31, 2002

Total Fees Recorded: $6,832,633

Actual Fees Requested: $6,082,477

Total Hours RecordedPartners: 4,686.8 (27.5%)Counsel: 1,115.9 (6.6%)Associates: 7,355.4 (43.2%)Paraprofessional: 3,874.1 (22.7%)Total Hours: 17,032.2

Total Hours Reflected in ApplicationPartners: 4,396.2 (29.0%)Counsel: 1,050.7 (6.9%)Associates: 6,779.9 (44.8%)Paraprofessional: 2,920.1 (19.3%)Total Hours: 15,146.9

Blended Hourly Rate: $357

Total Charges and Disbursements Recorded: $533,326

Actual Charges and Disbursements Requested: $496,121

in re enron - skadden 1st fee app (dn 4492).main doc

Documents

meagher flom llpand

meagher flomllp

entire application period

special counsel

x interim final application

total counsel

affiliated law practices

certain professionals