VENABLE LLP Special Litigation Counsel to the Debtors and Debtors in Possession 1800 Mercantile Bank & Trust Building Two Hopkins Plaza Baltimore, Maryland 21201 (410) 244-7400 Richard L. Wasserman (RLW -8696) Michael Schatzow (pro hac vice) Michael B. MacWilliams (pro hac vice pending) TOGUT, SEGAL & SEGAL LLP Bankruptcy Co-Counsel for the Debtors and Debtors in Possession One Penn Plaza, Suite 3335 New York, New York 10119 (212) 594-5000 Albert Togut (AT-9759) Frank A. Oswald (FAO-1223) Scott E. Ratner (SER-0015)

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK -------------------------------------------------------In re ENRON CORP., et al., Debtors. -------------------------------------------------------ENRON CORP., Plaintiff, v. CREDIT SUISSE FIRST BOSTON INTERNATIONAL and CREDIT SUISSE FIRST BOSTON LLC , f/k/a CREDIT SUISSE FIRST BOSTON CORPORATION, Defendants. --------------------------------------------------------x : : : : : : : x : : : : : : : : : : : : : : : : : x

Chapter 11 Case No. 01-16034 (AJG) Jointly Administered

Adversary Proceeding No. 03 - ____________ (AJG)

COMPLAINT FOR THE AVOIDANCE AND RECOVERY OF PREFERENTIAL AND FRAUDULENT TRANSFERS, RECOVERY OF ILLEGAL PAYMENTS TO A SHAREHOLDER WHILE THE DEBTOR WAS INSOLVENT, AND FOR OTHER RELIEF Plaintiff Enron Corp. (“Enron”), as a debtor and debtor in possession, by its special litigation counsel, Venable LLP, and its bankruptcy co-counsel, Togut Segal & Segal LLP, for its complaint against Defe ndants Credit Suisse First Boston International and Credit Suisse First Boston LLC, f/k/a Credit Suisse First Boston Corporation (collectively, “CSFB”), alleges the following facts and claims: NATURE OF THIS ACTION 1. Enron brings this suit to recover large pre-petition illegal and preferential

payments to a stockholder, made at times when Enron was insolvent, notwithstanding that other stockholders of Enron are being “wiped out” in this case and creditors are likely to receive payment of only a fraction of their claims. The transfers to CSFB as a stockholder of Enron, and transfers to CSFB as a creditor, are avoidable and recoverable pursuant to sections 541, 542, 544, 547, 548 and/or 550 of title 11 of the United States Code (the “Bankruptcy Code”) and other applicable laws. 2. Beginning in or about May 2000, Enron and CSFB entered into a series of

transactions, which they referred to as “equity forwards” or “equity swaps,” pertaining to Enron common stock. 1 In the thirty days prior to the filing of Enron’s bankruptcy petition on December 2, 2001, at a time when Enron was insolvent, Enron paid to or for the benefit of CSFB in excess of $200,000,000 to purchase Enron common stock, or in respect of Enron common

1

As used herein, the terms “equity forwards” and “equity swaps” are used for convenience of reference purposes only and without prejudice to their actual legal effect or to recharacterization of these transactions as loan transactions or otherwise.

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stock held by CSFB, contrary to the Bankruptcy Code and applicable state law. Such payments are avoidable and recoverable under, inter alia, the preference provisions of the Bankruptcy Code. 3. In addition, those same payments, and others made by Enron to or for the benefit

of CSFB within the year prior to the filing of Enron’s bankruptcy petition, constitute fraudulent transfers or conveyances under federal and state law and were illegal and void distributions to a common shareholder under applicable state law, placing a large common stockholder, CSFB, in a favored position compared to creditors, preferred shareholders and other common shareholders. For these and other reasons, as further set forth herein, the payments are avoidable, and the funds transferred thereby must be returned to the estate. PARTIES 4. Plaintiff Enron is a corporation organized under the laws of Oregon, with its

principal place of business at 1400 Smith Street, Houston, Texas. Enron is a debtor and debtor in possession in this bankruptcy case. 5. On information and belief, Defendant Credit Suisse First Boston International

(“CSFBi”) is a wholly-owned subsidiary of Defendant Credit Suisse First Boston LLC and maintains offices at One Cabot Square, London E14 4QJ, England. 6. Defendant Credit Suisse First Boston LLC is a limited liability company

organized under the laws of Delaware, with a principal place of business located at 11 Madison Avenue, New York, New York 10010. On information and belief, Credit Suisse First Boston LLC is the successor by merger to Credit Suisse First Boston Corporation.

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JURISDICTION AND VENUE 7. On December 2, 2001 (the “Petition Date”), Enron filed a voluntary petition for

relief under chapter 11 of the Bankruptcy Code. 8. Enron continues to operate its business and manage its property as debtor in

possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 9. The Court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C.

§§ 1334(b) and (e). This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). The claims asserted include proceedings to determine, avoid and recover preferences and fraudulent transfers. In addition, resolution of the claims asserted will have an effect upon Enron’s reorganization, the value of its estate, and any distribution to its creditors. 10. Pursuant to 28 U.S.C. §§ 157(a) and 157(b)(1) and the district court’s reference of

proceedings to the bankruptcy court, this Court may exercise subject matter jurisdiction. Venue in this district is proper in accordance with 28 U.S.C. § 1409(a). 11. Enron brings this adversary proceeding pursuant to and under Rule 7001 of the

Federal Rules of Bankruptcy Procedure and seeks relief pursuant to and under that Rule and under sections 323, 502, 510, 541, 542, 544, 547, 548, 550 and 1107(a) of the Bankruptcy Code. FACTS COMMON TO ALL COUNTS The Underlying Transactions 12. Beginning in or about May 2000, Enron and CSFB entered into a series of

transactions involving the purchase and sale of Enron common stock, the market price of Enron common stock, and/or ownership of Enron common stock. Such transactions are sometimes referred to herein for convenience of reference purposes as “equity forwards” or “equity swaps.” On information and belief, the parties never executed their own ISDA master agreement.

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Consequently, pursuant to the terms of the confirmations reflecting the transactions at issue, the transactions were subject to the terms of the standard form 1992 ISDA Master Agreement (the “ISDA”). At or before the date CSFB entered into each of the transactions at issue in this Complaint, it purchased Enron common stock in the amount designated in the transaction and so advised Enron. 13. Typically, certain transactions (sometimes characterized as equity forward

contracts) required Enron to purchase a certain number of shares of its common stock (the “Underlying Shares”) from CSFB at a designated future date (the “Termination Date”) and at a designated price (the “Initial Price”), or required one of the parties to make a comparable cash payment reflecting the change in the market price of the stock during the term of the agreement. For example, as of June 6, 2001, the parties entered into a transaction (Ref. No. 5780325) in which Enron agreed to buy 1,761,200 shares of Enron common stock from CSFB on November 12, 2001 at a price of $76.125 per share, for a total of $134,071,350. 14. The confirmation for Ref. No. 5780325 provides that “[CSFB] agrees that in the

event of the Bankruptcy of [Enron], [CSFB] shall not have rights or assert a claim that is senior in priority to the rights and claims available to the shareholders of the common stock of [Enron].” This same language appears in the confirmation for Ref. No. 5810994. These confirmations relate to the transfers made on November 9 and 13, 2001 identified in paragraph 21 below. 15. At various times, the parties entered into new agreements that adjusted the

Termination Date and often changed other terms of the transactions. 16. Overall, Enron and CSFB entered into, inter alia, the following agreements or

purported agreements pertaining to this Complaint (collectively, the “2001 Agreements”):

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(a)

Ref. No. 5780325, entered into as of June 6, 2001, involving 1,761,200

shares with an Initial Price of $76.125 per share and a Termination Date of November 12, 2001; (b) Ref. No. 6092565, entered into as of June 7, 2001, involving 1,672,000

shares with an “Equity Initial Value” of $50.0769 per share and a Termination Date of June 12, 2002; (c) Ref. No. 6150559, entered into as of July 18, 2001, involving 100,000

shares with an “Equity Initial Value” of $48.7972 per share and a Termination Date of July 23, 2002; (d) Ref. No. 6150925, entered into as of July 19, 2001, involving 125,000

shares with an “Equity Initial Value” of $49.1975 per share and a Termination Date of July 24, 2002; (e) Ref. No. 6151474, entered into as of July 20, 2001, involving 100,000

shares with an “Equity Initial Value” of $48.3375 per share and a Termination Date of July 25, 2002; (f) Ref. No. 6151481, entered into as of July 23, 2001, involving 700,000

shares with an “Equity Initial Value” of $46.8386 per share and a Termination Date of July 26, 2002; (g) Ref. No. 5810994, entered into as of August 20, 2001, involving 750,000

shares with an Initial Price of $79.00 per share and a Termination Date of November 9, 2001;

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(h)

Ref. No. 6180927, entered into as of October 18, 2001, involving

1,672,000 shares with an Initial Price of $43.03 per share and a Termination Date of June 12, 2002; (i) Ref. No. 6180929, entered into as of October 18, 2001, involving

1,025,000 shares with an Initial Price of $43.03 per share and a Termination Date of July 26, 2002; and (j) Ref. No. 6185873, entered into as of October 18, 2001, involving 400,000

shares with an Initial Price of $37.9491 per share and a Termination Date of August 21, 2002. 17. In March 2001, the price of Enron common stock bega n to slide precipitously

downward. As a result, Enron’s losing bets on the price of its stock grew further and further “out of the money.” These stock price decreases accelerated in September 2001 and thereafter. 18. In November 2001, CSFB refused to make any further extension of Enron’s

payment obligations. Notwithstanding that Enron was insolvent at the time, and was confronted by a growing liquidity crisis, Enron transferred to CSFB on November 9 and November 13, 2001 a total of $62,750,517.38 in exchange for 750,000 shares of its common stock. 19. Also on November 13, 2001, Enron transferred to CSFB $138,904,070.17 in

exchange for 1,761,200 shares of its common stock. 20. On November 21, 2001, Enron transferred to CSFB $11,806,478.64.

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The Avoidable Transfers 21. Within the 90-day period prior to the Petition Date, Enron made the following

transfers (the “90-Day Transfers”) to or for the benefit of CSFB: Transfer Date November 9, 2001 November 13, 2001 November 13, 2001 November 21, 2001 Total 22. Amount (U.S. dollars) $59,250,000.00 $3,500,517.38 $138,904,070.17 $11,806,478.64 $213,461,066.19

Within the one-year period prior to the Petition Date, Enron made the following

transfers (in addition to the transfers in paragraph 21) to or for the benefit of CSFB: Transfer Date August 17, 2001 August 17, 2001 August 17, 2001 August 17, 2001 August 17, 2001 Total 23. Amount (U.S. dollars) $2,775,218.99 $547,580.85 $793,317.74 $595,222.27 $12,575,353.55 $17,286,693.40

Thus, within the one-year period prior to the Petition Date, Enron transferred to

CSFB a total of $230,747,759.59. 24. CSFB (either directly or through one or more of its affiliates) was a significant

lender and financial advisor to Enron, with duties owing to Enron with respect thereto.

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25.

The Defendants were the initial transferees of each transfer identified in

paragraphs 21 and 22 (collectively, the “2001 Transfers”), or the entities for whose benefit such transfers were made. CLAIMS FOR RELIEF Count I Avoidance of Preferential Transfers Pursuant to Section 547(b) of the Bankruptcy Code 26. through 25. 27. In November 2001, within ninety days prior to the Petition Date, Enron Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

transferred to CSFB a total of $213,461,066.19, constituting the 90-Day Transfers. 28. 29. The 90-Day Transfers constitute transfers of interests of Enron in property. The 90-Day Transfers were made to or for the benefit of a creditor on account of

an antecedent debt of Enron. 30. 31. The 90-Day Transfers were made at a time when Enron was insolvent. CSFB, by virtue of the 90-Day Transfers, received more than it would have

received if this were a case under Chapter 7 of the Bankruptcy Code, the 90-Day Transfers had not been made, and CSFB instead had received payment to the extent provided by the Bankruptcy Code. 32. Accordingly, the 90-Day Transfers should be avoided pursuant to section 547(b)

of the Bankruptcy Code, and Enron may recover from CSFB the amount transferred of $213,461,066.19, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate.

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Count II Recovery of Avoided Preferential Transfers Pursuant to Section 550 of the Bankruptcy Code 33. through 32. 34. The 90-Day Transfers are avoidable preferences pursuant to section 547(b) of the Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

Bankruptcy Code, and, accordingly, pursuant to section 550(a) of the Bankruptcy Code, Enron may recover from CSFB the amount of $213,461,066.19, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate. Count III Declaratory Judgment that the 2001 Transfers and Agreements Violated State Law 35. through 34. 36. The 2001 Transfers and the 2001 Agreements were direct or indirect transfers of Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

money or other property by Enron to or for the benefit of an Enron common shareholder, CSFB, in respect of shares of Enron common stock. As such, they constituted distributions as defined by Or. Rev. Stat. § 60.001. 37. Enron’s board of directors did not, as required by Oregon law, authorize either these

distributions or the 2001 Agreements with CSFB based upon a determination that (a) Enron would be able to pay its debts as they become due in the usual course of business; and (b) Enron’s total assets would at least equal the sum of its total liabilities plus the amount that would be needed if Enron were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

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38.

Enron was insolvent when the 2001 Transfers were made and when the 2001

Agreements were entered into. 39. The 2001 Transfers and the 2001 Agreements, which were agreements to make the

2001 Transfers, are therefore illegal and void under applicable state law, including Or. Rev. Stat. § 60.181. 40. Accordingly, pursuant to Bankruptcy Rule 7001, sections 323, 541 and/or 1107(a)

of the Bankruptcy Code, and applicable state law, Enron is entitled to entry of a judgment declaring that the 2001 Transfers and the 2001 Agreements were illegal and void under applicable state law. Count IV Rescission of Agreements and Recovery of Payments Made in Violation of State Law 41. through 40. 42. The 2001 Transfers and the 2001 Agreements were direct or indirect transfers of Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

money or other property by Enron to or for the benefit of an Enron common shareholder, CSFB, in respect of shares of Enron common stock. As such, they constituted distributions as defined by Or. Rev. Stat. § 60.001. 43. Enron’s board of directors did not, as required by Oregon law, authorize either these

distributions or the 2001 Agreements with CSFB based upon a determination that (a) Enron would be able to pay its debts as they become due in the usual course of business; and (b) Enron’s total assets would at least equal the sum of its total liabilities plus the amount that would be needed if Enron were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution. -11BA3DOCS1/257882

44.

Enron was insolvent when the 2001 Transfers were made and when the 2001

Agreements were entered into. 45. The 2001 Transfers and the 2001 Agreements, which were agreements to make the

2001 Transfers, are therefore illegal and void under applicable state law, including Or. Rev. Stat. § 60.181. 46. Accordingly, pursuant to sections 323, 541, 542 and/or 1107(a) of the Bankruptcy

Code and applicable state law, Enron is entitled to rescind the 2001 Agreements as illegal under Oregon law and is further entitled to recover from CSFB, or CSFB should be required to disgorge, the amount of $230,747,759.59, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate. Count V Restitution/Unjust Enrichment 47. through 46. 48. The 2001 Transfers and the 2001 Agreements were direct or indirect transfers of Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

money or other property by Enron to or for the benefit of an Enron common shareholder, CSFB, in respect of shares of Enron common stock. As such, they constituted illegal distributions under Or. Rev. Stat. §§ 60.001 and 60.181. 49. Because Enron was insolvent when it made the 2001 Transfers and entered into the

2001 Agreements, the 2001 Transfers and the 2001 Agreements gave CSFB rights that ranked senior to those of a common or preferred shareholder of Enron, in violation of the contract terms of certain of the 2001 Agreements. Under section 8.2 of these confirmations, which constituted integral parts of the corresponding 2001 Agreements, Enron could not legally purchase its own common stock from a shareholder such as CSFB, or, while insolvent, make payments to CSFB -12BA3DOCS1/257882

related to Enron common stock at a price exceeding that which would be paid to other common shareholders through bankruptcy. 50. The 2001 Transfers and the 2001 Agreements conferred a substantial benefit upon

CSFB of $230,747,759.59. Enron did not receive any consideration, let alone fair consideration, or a fair equivalent, or reasonably equivalent value in exchange for either the 2001 Transfers or the 2001 Agreements. In equity and good conscience, CSFB is not entitled to retain the 2001 Transfers, or to enforce the 2001 Agreements, where those transfers and agreements were illegal under applicable law, in some cases contrary to the parties’ contracts, and made without consideration to Enron. 51. The 2001 Transfers and the 2001 Agreements unjustly enriched CSFB and depleted

Enron’s cash reserves and its estate. Retention of these funds by CSFB is inequitable, and CSFB should therefore be required to make restitution and return to Enron the full amount of all sums transferred. 52. Accordingly, pursuant to sections 323, 541, 542 and/or 1107(a) of the Bankruptcy

Code and applicable state law, Enron is entitled to restitution from CSFB in the amount of $230,747,759.59, or CSFB should be required to disgorge that amount, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate. Count VI Avoidance of Transfers and Agreements in Violation of State Law Pursuant to Section 544(b) of the Bankruptcy Code 53. through 52. Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

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54.

The 2001 Transfers and the 2001 Agreements involved a direct or indirect transfer

of money or other property by Enron to or for the benefit of an Enron common shareholder, CSFB, in respect of shares of Enron common stock. As such, they constituted distributions as defined by Or. Rev. Stat. § 60.001. 55. Enron’s board of directors did not, as required by Oregon law, authorize either these

distributions or the 2001 Agreements with CSFB pertaining to them based upon a determination that (a) Enron would be able to pay its debts as they become due in the usual course of business; and (b) Enron’s total assets would at least equal the sum of its total liabilities plus the amount that would be needed if Enron were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution. 56. Enron was insolvent when the 2001 Transfers were made and when the 2001

Agreements were entered into. 57. The 2001 Transfers and the 2001 Agreements, which were agreements to make the

2001 Transfers, are therefore illegal and void under applicable state law, including Or. Rev. Stat. § 60.181. 58. Pursuant to section 544(b) of the Bankruptcy Code, Enron has the rights of an

existing unsecured creditor of Enron. Section 544(b) permits Enron to assert claims and causes of action that such a creditor could assert under applicable state law. The 2001 Transfers and the 2001 Agreements are void under applicable state law, including Or. Rev. Stat. § 60.181, and therefore voidable by an unsecured creditor of Enron. 59. Accordingly, under applicable state law and section 544(b) of the Bankruptcy

Code, Enron is entitled to avoid the 2001 Agreements and is further entitled to recover from

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CSFB, or CSFB should be required to disgorge, the amount of $230,747,759.59, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate. Count VII Recovery of Transfers in Violation of State Law Pursuant to Section 550 of the Bankruptcy Code 60. through 59. 61. The 2001 Transfers and the 2001 Agreements are avoidable pursuant to section Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

544(b) of the Bankruptcy Code. Accordingly, pursuant to section 550(a) of the Bankruptcy Code, Enron may recover from CSFB the amount of $230,747,759.59, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate. Count VIII Avoidance of Intentionally Fraudulent Transfers Pursuant to Section 548(a)(1)(A) of the Bankruptcy Code 62. through 61. 63. Within one year before the Petition Date, Enron made the 90-Day Transfers to Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

CSFB, and entered into certain of the 2001 Agreements with CSFB with respect to such transfers (the “90-Day Agreements”). 64. The 90-Day Transfers, which constituted transfers of interests of Enron in

property, were made and/or the obligations under the 90-Day Agreements were incurred with actual intent to hinder, delay or defraud one or more entities to which Enron was or became, on or after the date the 90-Day Transfers were made or such obligations were incurred, indebted. Specifically, (i) the 90-Day Transfers were made and the 90-Day Agreements were entered into -15BA3DOCS1/257882

when Enron was insolvent; (ii) the 90-Day Transfers were made to CSFB and the 90-Day Agreements were entered into at a time when CSFB (either directly or through one or more of its affiliates) was a significant lender and financial advisor to Enron with sophisticated knowledge of Enron’s growing financial problems and considerable leverage over Enron; (iii) the Enron common stock received by Enron in exchange for certain of the 90-Day Transfers had no value to Enron; (iv) up until the 90-Day Transfers, CSFB and Enron did not make payments on prior obligations according to their terms and instead entered new contracts that extended any payment obligations, but, at a time when Enron faced a grave economic crisis and cash shortfall, Enron made the 90-Day Transfers to CSFB and similar transfers to others totaling more than $740,000,000; (v) the 90-Day Transfers were not made in the ordinary course of business; (vi) these distributions to a shareholder were illegal under applicable state law, as they were made to CSFB while Enron was insolvent and without authorization by the board of directors of Enron as required by Or. Rev. Stat. § 60.181; (vii) one or more of the 90-Day Transfers were in breach of, or made to avoid or evade, the contract terms entered into by Enron and CSFB, which, among other things, provided that “[CSFB] agrees that in the event of the Bankruptcy of [Enron], [CSFB] shall not have rights or assert a claim that is senior in priority to the rights and claims available to the shareholders of the common stock of [Enron];” (viii) the 90-Day Transfers elevated the subordinate rights of CSFB as a common stockholder ahead of the interests of Enron’s many creditors, preferred stockholders and other common stockholders; and (ix) the 90Day Transfers depleted much needed cash, adversely impacted and jeopardized the liquidity of the company, and hindered and delayed payments to creditors on obligations owed by Enron. 65. Certain officers at Enron who directed these payments are either currently under

indictment or have been convicted of felonies pertaining to their management of Enron.

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66.

By reason of the foregoing, pursuant to section 548(a)(1)(A) of the Bankruptcy

Code, the 90-Day Transfers and the 90-Day Agreements should be avoided as intentionally fraudulent transfers and/or obligations such that Enron may recover from CSFB the amount of $213,461,066.19, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate. Count IX Recovery of Intentionally Fraudulent Transfers Pursuant to Section 550 of the Bankruptcy Code 67. through 66. 68. The 90-Day Transfers and the 90-Day Agreements are avoidable as intentionally Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

fraudulent transfers and/or obligations pursuant to section 548(a)(1)(A) of the Bankruptcy Code, and, accordingly, pursuant to section 550(a) of the Bankruptcy Code, Enron may recover from CSFB the amount of $213,461,066.19, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate. Count X Avoidance of Intentionally Fraudulent Transfers Pursuant to Section 544(b) of the Bankruptcy Code and Applicable State Fraudulent Conveyance or Transfer Law 69. through 68. 70. Within one year before the Petition Date, Enron made the 90-Day Transfers to, Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

and entered into the 90-Day Agreements with, CSFB. 71. The 90-Day Transfers, which constituted transfers of interests of Enron in

property, were made and/or the obligations under the 90-Day Agreements were incurred with

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actual intent to hinder, delay or defraud one or more entities to which Enron was or became, on or after the date the 90-Day Transfers were made or such obligations were incurred, indebted. Specifically, (i) the 90-Day Transfers were made and the 90-Day Agreements were entered into when Enron was insolvent; (ii) the 90-Day Transfers were made to CSFB and the 90-Day Agreements were entered into at a time when CSFB (either directly or through one or more of its affiliates) was a significant lender and financial advisor to Enron with sophisticated knowledge of Enron’s growing financial problems and considerable leverage over Enron; (iii) the Enron common stock received by Enron in exchange for certain of the 90-Day Transfers had no value to Enron; (iv) up until the 90-Day Transfers, CSFB and Enron did not make payments on prior obligations according to their terms and instead entered new contracts that extended any payment obligations, but, at a time when Enron faced a grave economic crisis and cash shortfall, Enron made the 90-Day Transfers to CSFB and similar transfers to others totaling more than $740,000,000; (v) the 90-Day Transfers were not made in the ordinary course of business; (vi) these distributions to a shareholder were illegal under applicable state law, as they were made to CSFB while Enron was insolvent and without authorization by the board of directors of Enron as required by Or. Rev. Stat. § 60.181; (vii) one or more of the 90-Day Transfers were in breach of, or made to avoid or evade, the contract terms entered into by Enron and CSFB, which, among other things, provided that “[CSFB] agrees that in the event of the Bankruptcy of [Enron], [CSFB] shall not have rights or assert a claim that is senior in priority to the rights and claims available to the shareholders of the common stock of [Enron];” (viii) the 90-Day Transfers elevated the subordinate rights of CSFB as a common stockholder ahead of the interests of Enron’s many creditors, preferred stockholders and other common stockholders; and (ix) the 90-

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Day Transfers depleted much needed cash, adversely impacted and jeopardized the liquidity of the company, and hindered and delayed payments to creditors on obligations owed by Enron. 72. Certain officers at Enron who directed these payments are either currently under

indictment or have been convicted of felonies pertaining to their management of Enron. 73. Pursuant to section 544(b) of the Bankruptcy Code, Enron has the rights of an

existing unsecured creditor of Enron. Section 544(b) permits Enron to assert claims and causes of action that such a creditor could assert under applicable state law. The 90-Day Transfers and the 90-Day Agreements are voidable under applicable state fraudulent transfer or conveyance law by an unsecured creditor of Enron. 74. By reason of the foregoing, pursuant to section 544(b) of the Bankruptcy Code

and applicable state fraudulent conveyance or fraudulent transfer law, the 90-Day Transfers and the 90-Day Agreements should be avoided as intentionally fraudulent transfers, conveyances and/or obligations such that Enron may recover from CSFB the amount of $213,461,066.19, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate. Count XI Recovery of Intentionally Fraudulent Transfers Pursuant to Section 550 of the Bankruptcy Code 75. through 74. 76. The 90-Day Transfers and the 90-Day Agreements are avoidable as intentionally Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

fraudulent transfers, conveyances and/or obligations pursuant to section 544(b) of the Bankruptcy Code and applicable state fraudulent conveyance or fraudulent transfer law, and, accordingly, pursuant to section 550(a) of the Bankruptcy Code, Enron may recover from CSFB

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the amount of $213,461,066.19, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate. Count XII Avoidance of Fraudulent Transfers Pursuant to Section 548(a)(1)(B) of the Bankruptcy Code 77. through 76. 78. Within one year before the Petition Date, Enron made the 2001 Transfers to CSFB Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

and entered into the 2001 Agreements with CSFB. 79. 80. 81. The 2001 Transfers constitute transfers of interests of Enron in property. The 2001 Agreements constitute obligations incurred by Enron. Enron received less than reasonably equivalent value in exchange for the 2001

Transfers and the 2001 Agreements. 82. When the 2001 Transfers were made, and when the 2001 Agreements were

entered into, Enron (i) was insolvent or became insolvent as a result thereof; (ii) was engaged in a business or transaction, or was about to engage in a business or transaction, for which its remaining property was an unreasonably small capital; or (iii) intended to incur, or believed it would incur, debts that would be beyond its ability to pay as they matured. 83. Accordingly, the 2001 Transfers and the 2001 Agreements should be avoided

pursuant to section 548(a)(1)(B) of the Bankruptcy Code, and Enron may recover from CSFB the amount of $230,747,759.59, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate.

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Count XIII Recovery of Fraudulent Transfers Pursuant to Section 550 of the Bankruptcy Code 84. through 83. 85. The 2001 Transfers and the 2001 Agreements are avoidable pursuant to Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

sectio n 548(a)(1)(B) of the Bankruptcy Code, and, accordingly, pursuant to section 550(a) of the Bankruptcy Code, Enron may recover from CSFB the amount of $230,747,759.59, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate. Count XIV Avoidance of Fraudulent Transfers Pursuant to Section 544(b) of the Bankruptcy Code and Applicable State Fraudulent Transfer or Conveyance Law 86. through 85. 87. Within one year before the Petition Date, Enron made the 2001 Transfers to CSFB Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

and entered into the 2001 Agreements with CSFB. 88. 89. 90. The 2001 Transfers constitute transfers of interests of Enron in property. The 2001 Agreements constitute obligations incurred by Enron. Enron did not receive fair consideration, or a fair equivalent, or reasonably

equivalent value in exchange for the 2001 Transfers or for the 2001 Agreements. 91. When the 2001 Transfers were made, and when the 2001 Agreements were

entered into, Enron (i) was insolvent or became insolvent as a result thereof; (ii) was engaged in a business or transaction, or was about to engage in business or transaction, for which its

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remaining property was an unreasonably small capital; or (iii) intended to incur, or believed it would incur, debts that would be beyond its ability to pay as they matured. 92. Pursuant to section 544(b) of the Bankruptcy Code, Enron has the rights of an

existing unsecured creditor of Enron. Section 544(b) permits Enron to assert claims and causes of action that such a creditor could assert under applicable state law. The 2001 Transfers and the 2001 Agreements are avoidable under applicable state fraudulent transfer or conveyance law by an unsecured creditor of Enron. 93. For the foregoing reasons, the 2001 Transfers and the 2001 Agreements should be

avoided under applicable state fraudulent transfer or conveyance law and section 544(b) of the Bankruptcy Code such that Enron may recover from CSFB the amount of $230,747,759.59, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron's estate. Count XV Recovery of Fraudulent Transfers Pursuant to Section 550 of the Bankruptcy Code (Invoking State Fraudulent Conveyance and Transfer Law) 94. through 93. 95. The 2001 Transfers and the 2001 Agreements are voidable as fraudulent transfers Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

or conveya nces pursuant to section 544(b) of the Bankruptcy Code and applicable state law. Accordingly, pursuant to section 550(a) of the Bankruptcy Code, Enron may recover from CSFB the amount of $230,747,759.59, plus interest from the transfer dates, and costs and fees to the extent available, for the benefit of Enron’s estate.

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Count XVI Disallowance of Claims Pursuant to Section 502(d) of the Bankruptcy Code 96. through 95. 97. By reason of the foregoing facts and pursuant to section 502(d) of the Bankruptcy Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

Code, the claims of CSFB should be disallowed unless and until CSFB has turned over to Enron the property transferred, or paid Enron the value of such transferred property, for which the Defendants are liable pursuant to section 550 of the Bankruptcy Code. Count XVII Subordination of Claims Pursuant to Section 510(a) of the Bankruptcy Code 98. through 97. 99. On or about October 9, 2002, CSFBi filed a proof of claim asserting a claim Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

against Enron in the amount of $120,448,323.00, which was docketed as Claim No. 7524 (the “CSFB Equity-Related Claim”). 100. The CSFB Equity-Related Claim seeks recovery of (a) $117,044,093 allegedly

owed by Enron on the transactions involving 1,672,000 and 1,025,000 shares of Enron common stock referred to in paragraphs 16(h) and 16(i), respectively; and (b) $3,404,230 allegedly owed by Enron on the transaction involving 400,000 shares of Enron common stock referred to in paragraph 16(j). 101. The confirmations for the transactions referred to in paragraphs 16(h) and 16(i)

provide that “[CSFB] agrees that in the event of the Bankruptcy of [Enron], [CSFB] shall not

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have rights or assert a claim that is senior in priority to the rights and claims available to the shareholders of the common stock of [Enron].” 102. The $117,044,093 portion of the liability asserted in the CSFB Equity-Related

Claim is subject to a subordination agreement that is enforceable under nonbankruptcy law and is therefore subject to subordination to the allowed claims of unsecured creditors and interests of preferred stockholders under section 510(a) of the Bankruptcy Code. 103. Accordingly, $117,044,093 of the amount asserted in the CSFB Equity-Related

Claim should be subordinated for purposes of distribution pursuant to section 510(a) of the Bankruptcy Code. Count XVIII Subordination of Claims Pursuant to Section 510(b) of the Bankruptcy Code 104. through 103. 105. The entire liability asserted in the CSFB Equity-Related Claim relates to the Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

purchase or sale of Enron common stock and is therefore subject to subordination to the allowed claims of unsecured creditors and interests of preferred stockholders under section 510(b) of the Bankruptcy Code. 106. Accordingly, the CSFB Equity-Related Claim should be subordinated for

purposes of distribution pursuant to section 510(b) of the Bankruptcy Code. Count XIX Disallowance of Claims Pursuant to Section 502(b) of the Bankruptcy Code 107. through 106. -24BA3DOCS1/257882

Enron hereby realleges, as if fully set forth herein, the allegations of paragraphs 1

108.

The CSFB Equity-Related Claim is unenforceable against Enron and property of

Enron under applicable law. 109. By reason of the foregoing facts, the CSFB Equity-Related Claim should be

disallowed pursuant to section 502(b) of the Bankruptcy Code. PRAYERS FOR RELIEF WHEREFORE, Enron requests judgment on its Complaint as follows: A. B. On Count I, avoiding and setting aside the 90-Day Transfers; On Count II, IX and XI, directing CSFB to pay to the estate of Enron the

amount of $213,461,066.19, plus interest from the dates of transfer; C. On Count III, declaring that the 2001 Transfers and the 2001 Agreements

were illegal and void under applicable state law; D. On Count IV, rescinding the 2001 Agreements and directing CSFB to pay

to the estate of Enron the amount of $230,747,759.59, plus interest from the dates of transfer; E. On Count V, VII, XIII and XV, directing CSFB to pay to the estate of

Enron the amount of $230,747,759.59, plus interest from the dates of transfer; F. On Count VI, XII and XIV, avoiding and setting aside the 2001 Transfers

and the 2001 Agreements; G. On Counts VIII and X, avoiding and setting aside the 90-Day Transfers

and the 90-Day Agreements; H. On Count XVI, disallowing any and all claims filed or held by CSFB in

these bankruptcy proceedings unless and until CSFB has turned over to Enron the

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property transferred, or paid Enron the value of such transferred property, for which CSFB is liable pursuant to section 550 of the Bankruptcy Code; I. On Count XVII, subordinating the $117,044,093 portion of the CSFB

Equity-Related Claim for purposes of distribution; J. On Count XVIII, subordinating the CSFB Equity-Related Claim for

purposes of distribution; K. L. On Count XIX, disallowing the CSFB Equity-Related Claim; Awarding Enron its attorneys’ fees, costs and other expenses incurred in

this action; and M. Awarding Enron such other and further relief as the nature of this cause

may require and this Court deems appropriate.

Baltimore, Maryland November 21, 2003

VENABLE LLP BY: /s/ Richard L. Wasserman Richard L. Wasserman (RLW-8696) Michael Schatzow (pro hac vice) Michael B. MacWilliams (pro hac vice pending) 1800 Mercantile Bank & Trust Building 2 Hopkins Plaza Baltimore, Maryland 21201 (410) 244-7400 (410) 244-7742 (fax) Special Litigation Counsel for Debtor and Debtor in Possession Enron Corp.

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New York, New York November 21, 2003

and by Bankruptcy Co-Counsel, TOGUT, SEGAL & SEGAL LLP BY: /s/ Frank A. Oswald Albert Togut (AT-9759) Frank A. Oswald (FAO-1223) Scott E. Ratner (SER-0015) Members of the Firm One Penn Plaza, Suite 3335 New York, New York 10119 (212) 594-5000 (212) 967-4258 (fax)

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