A year and a half into one of the most expensive bankruptcies in history, Enron Corporation is ready to reveal its plan to emerge from Chapter 11 as two companies with different names.
The much-anticipated 900-page reorganisation plan, to be filed early Friday after five deadline extensions, is expected to show how Enron will repay part of tens of billions of dollars owed to more than 20 000 creditors.
Texas Attorney General Greg Abbott, who represents the state as a creditor, said he hopes the filing will signal an ”end in sight,” but has been concerned about the case’s pace and costs. Administrative and legal fees have surpassed $442-million.
Besides splitting proceeds from asset sales and auctions, creditors are expected to receive equity in CrossCountry Energy Corp., a new company with three North American natural gas pipelines, and a second firm with 19 of Enron’s international power and pipeline holdings. The second company, dubbed ”InternationalCo.,” has yet to get a permanent name. None of the assets destined for either company are bankrupt.
Enron spokesperson Mark Palmer said Portland General Electric, Enron’s Pacific Northwest utility, could be sold or have its stock distributed to creditors. He said Enron is still seeking bids on the utility, but if Enron decides not to sell it, Portland General would be a third new company, independent of CrossCountry Energy
and InternationalCo.
Enron also is trying to sell other international holdings. Last month the Federal Energy Regulatory Commission barred Enron from future sales of natural gas or power at market prices, but the energy company can resume regular business once it emerges from bankruptcy and gains FERC approval.
According to bankruptcy court filings, Enron has until the end of November — two years after filing for Chapter 11 — to solicit support from creditors for the plan. Major creditors already have approved it.
Enron, number seven on the Fortune 500 in 2000, went bankrupt in December 2001 amid revelations of hidden debt, inflated profits and vastly complicated accounting schemes designed to support its facade of robust financial health. Thousands of employees lost their jobs and stock that once traded as high as $90 per share shrank to pennies. – Sapa-AP