Footnote 8

Garden State Paper Company, (ii) “soft assets,” such as Enron credit support, risk managementexpertise, and management strength, and (iii) the pulp and paper trading business.386. Enron had acquired the Garden State Paper Company in August 2000 for $72 million;Chase therefore used $72 million in its valuation. Chase did not assign any specific number toEnron’s soft assets. Chase assigned a value of $225 million to $300 million to the pulp and papertrading business. Only two months before, that business had been given a mark-to-market value ofonly $80 million. Less than a year later, in preparing an asset inventory in anticipation ofbankruptcy, Enron estimated the total market value of the pulp and paper trading business at$50 million.387. Chase’s $225 million to $300 million valuation of the pulp and paper trading businesswas without factual basis or support. Chase’s October and November 2000 valuation of Enron’strading contracts was inconsistent with the mark-to-market value attributed to it in September 2000,inconsistent with the value given to it prior to bankruptcy, and inconsistent with its actual value.By all appearances, Chase chose the range $225 million to $300 million solely because the Insidersmade known that they valued the trading business at $275 million.388. Chase’s valuation gave the Insiders an ostensible basis for recognizing improperlya gain in the transfer of the trading contracts from Enron to Annapurna. Chase knew that theInsiders intended to so rely on the valuation Chase provided, knew that the valuation was withoutsupport, and yet provided it anyway, which allowed the Fishtail transaction to occur.389. Chase knowingly and improperly facilitated the Insiders’ manipulation of Enron’sfinancial statements through its valuation, as discussed above, and through its participation inFishtail.604041v1/007457-129-