Declaration Of Helen J. Hodges In Support Of Lead Counsel's ...

nature of Enron’s financial condition during the Class Period, how Enron-related transactions were
structured by defendants to distort Enron’s financial results, and generally how investors were
deceived by the Enron-related transactions and resultant material omissions and misstatements.
Professor Black was deposed for two days in May 2006. His testimony addressed the true nature of
Enron’s financial condition, when Enron likely became insolvent, what investors would want to
know about Enron, and the disclosures Enron provided (or failed to provide) about its financial
results. He opined that “many of Enron’s disclosures were grossly and often intentionally
incomplete and misleading” (1/17/06 Expert Report of Bernard Black at 6) and that Enron was cashflow
insolvent by 1999 and perhaps as early as 1998. Professor Black’s rebuttal report was filed in
response to ten defense expert reports challenging Professor Black’s expert opinions about Enron’s
true financial condition, material omissions, and misleading disclosures resulting from the Enronrelated
transactions. Two of them asserted he was not qualified to and had not performed any valid
insolvency analysis. He held firm that if the truth had been told, Enron would not have maintained
its investment grade credit rating and investors would have known early on that Enron was not
generating enough cash from its operations to pay the interest on its debt.
218. Professor Claire Hill is a Professor of Law and Norman and Edna Freehling Scholar
with Chicago-Kent College of Law, and is a Visiting Professor of Law at the University of
Minnesota Law School. Professor Hill received her J.D. from American University, Washington
College of Law and her LLM and JSD degrees from Columbia University School of Law. Professor
Hill submitted an expert report concerning Enron’s interactions with the national credit rating
agencies. Professor Hill opined on what the credit rating agencies did in response to their dealings
with Enron, and further opined on how Enron security purchasers and sellers were affected by the
interactions. Professor Hill testified about rating agencies, how they set ratings and how Enron
misled them when it hid its true debt level and reported inflated cash flows from operations. She
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