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

286. In consultation with Chris Patti, we decided to publish a draft of the plan of allocation
for public comment. To our knowledge, this is unprecedented in securities class actions. We wanted
to do everything possible to generate a plan that was fair to all. In July we published the draft plan
of allocation and made it available on the website www.enronfraud.com. We solicited comments
from the public and we also sent the draft plan to interested persons who had contacted us in the past
regarding the plan of allocation.
287. We reviewed the comments received. We answered questions and provided
information to those who asked about the plan. We made a few adjustments to the plan to address
some comments received. In addition, we continued to review the plan amongst ourselves, with
Stanford Consulting and with Roman Weil.
288. The time and attention we devoted to generating the plan of allocation was
extraordinary. Two of my partners and I spent many days on this project over the last six months.
The proposed plan of allocation reflects our evaluation of the strengths and weaknesses of the claims
of Class members and fairly allocates the recovery among Class members in accordance with Lead
Plaintiff’s theories of damages in the case. Thus, a claimant’s Recognized Claim is based upon Lead
Plaintiff’s contention of the estimated artificial inflation in the price paid for Enron securities. The
estimated inflation equals the excess amount that Class members allegedly paid over fair market
value for the securities, less any inflation that existed at the time of sale.
289. In addition to Lead Plaintiff’s, Coughlin Stoia’s lawyers’ and Stanford Consulting’s
input and review, we retained Roman Weil to opine on the fairness of the proposed plan of
allocation. See Declaration of Roman Weil submitted herewith. In In re Cendant Corp. Litig., No.
98-1664 (WHW) (D.N.J.), Mr. Weil evaluated the methods used in the plan of allocation to decide
whether it was fair, reasonable and adequate and he opined on whether the court should reject
plaintiffs’ proposed plan of allocation in favor of an objector’s proposal. His opinion was accepted
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