Footnote 8

(a)First, Maxey has admitted under oath that Enron held the Cochise Airplanesfor a period of time simply to create the impression that they had not been purchased for resale, eventhough the Insiders intended from the outset to dispose of the planes. Exam. III, App. G at 52.BT/Deutsche Bank knew the Insiders’ plans.(b)Second, applying purchase accounting adjustments to reduce the book basisof the Cochise Airplanes violated GAAP because the purchase of the Cochise Airplanes wasunrelated to the acquisition of the REMIC Residual Interests in Cochise.(e)Renegade and Valhalla501. The Renegade and Valhalla tax accommodation transactions did not themselvesproduce tax or accounting benefits for Enron. Instead, they were lucrative rewards by the Insidersfor BT/Deutsche Bank’s work on other questionable transactions with the Insiders. As such, theyfacilitated the Insiders’ scheme and created substantial tax benefits for BT/Deutsche Bank. Enronparticipated only indirectly in BT/Deutsche Bank’s tax benefits through, for example, favorablefinancing terms and fees.502. In Renegade, a December 1998 financing, Enron, through a complex series oftransactions, effectively borrowed $8 million from BT/Deutsche Bank at a discounted rate.BT/Deutsche Bank then essentially paid Enron a $1.73 million fee for accommodating it. InValhalla, a May 2000 financing transaction, the Insiders helped BT/Deutsche Bank create deductibleinterest and nontaxable income by exploiting differences between U.S. and German tax laws.BT/Deutsche Bank ultimately used Valhalla to finance a stream of tax-exempt income throughdeductible payments. Essentially, for an “accommodation fee” equal to the spread between theinterest it paid and the interest it received, the Insiders had Enron facilitate a tax-avoidancearrangement for BT/Deutsche Bank.604041v1/007457-162-