As I am reading the Paper:

B. Preneel and P. C. van Oorschot. MDx-MAC and building fast MACs from hash functions. In D. Coppersmith, editor, Advances in Cryptology (Proceedings of CRYPTO), volume 963 of LNCS, pages 1–14, Berlin Heidelberg, 1995. Springer (https://people.scs.carleton.ca/~paulv/papers/Crypto95.pdf)

I am having trouble understanding the Attack on the Envelope Method (4.3). In particular, I am not sure what chaining variables are referring to and what Prerequisites have to be met in order to execute the attack.

Maybe a more detailed/ rephrased explanation could help me to understand the gist of the attack.