Enron reaches settlement with Marlin Water Trust noteholders

Enron announced that it has reached a settlement resolving certain claims and disputes relating to notes issued by the Marlin Water Trust, a special purpose vehicle established by Enron.

HOUSTON, July 23, 2003 -- Enron announced that it has reached a settlement resolving certain claims and disputes relating to notes issued by the Marlin Water Trust, a special purpose vehicle established by Enron.

Under the proposed settlement, holders of Marlin notes would receive approximately $127.5 million in cash. The cash portion of the settlement includes the proceeds of certain collateral held by The Bank of New York, as Indenture Trustee, and the payment of amounts owed by Azurix Corp., a non-debtor affiliate of Enron.

Additionally, The Bank of New York, as Indenture Trustee, at the direction of holders of 69 percent of the Marlin notes, has agreed to reduce its $1.1 billion claim to a $507.5 million general unsecured claim.

"We are pleased to have reached a settlement, which will help avoid lengthy and costly litigation," said Stephen F. Cooper, acting CEO of Enron. "We remain hopeful that we will also be successful in settling claims that have arisen from other special purpose entities."

Enron has filed a motion with the U.S. Bankruptcy Court seeking approval of the settlement. The parties to the settlement are Enron, the Official Unsecured Creditors' Committee, The Bank of New York, as Indenture Trustee, and holders of approximately 69 percent of the Marlin notes. The full motion and proposed settlement agreement can be viewed at www.enron.com/corp/pressroom/Marlin9019Motion.pdf.

Marlin Water Trust is a special purpose entity established by Enron in 1998 to refinance a portion of the purchase price of Wessex Water, which was the cornerstone asset in Azurix Corp.

Enron's Internet address is www.enron.com.

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