Enron's Planned End
Symbol of Greed Has Shed Assets, Hopes to Drop Name and Emerge
By Carrie Johnson
Washington Post Staff Writer
Thursday, June 3, 2004; Page E01
In the past few months, Enron Corp. has vacated its shiny Houston office tower, unloaded its most valuable assets and moved to help creditors recover a fraction of the billions they lost when the company collapsed in late 2001.
Today caretakers for the disgraced energy company will appear in a New York courtroom, urging a bankruptcy judge to approve a plan that would shed the Enron name and most of its remaining operations.
If the plan goes forward as expected, only Prisma Energy International Inc., a holding company for nearly two dozen gas and electricity businesses with 4,900 employees located around the globe, would remain. Creditors, who lost about $63 billion, would get back from 17 to 22 cents on the dollar in cash and in Prisma stock.
Today's Enron is a far cry from what just four years ago was ranked as the seventh-largest public company in the nation. It was led by executives who made millions of dollars and boasted they had transcended the limits of old-line energy companies by using the Internet to trade energy contracts.
At one point, Enron employed 32,000 workers in outposts around the globe, rapidly expanding from its home base in Houston to Brazil and India. But a December 2001 bankruptcy filing and a cascade of federal investigations quickly turned the company into a symbol of corporate greed.
Federal prosecutors and securities regulators continue to investigate the company's former leaders, and Enron's ranks are filled with turnaround experts. Law professors and analysts said it is likely that U.S. Bankruptcy Judge Arthur J. Gonzalez will give his blessing to the company's plan in the coming weeks.
"Enron for the longest time was a shell game, and now all that's left is a little bit of real stuff and a lot of debt," said Nancy B. Rapoport, dean of the University of Houston Law Center. "I think it's important for everyone to try to get closure on this very big bankruptcy."
University of Pennsylvania law professor David A. Skeel Jr. said: "The confirmation hearing is decidedly the big event in any bankruptcy case. I don't have a sense there are issues out there that are likely to derail it."
Karen Denne, an Enron spokeswoman, said the company had to unwind nearly 2,400 business entities in the course of the bankruptcy, including 55 "special-purpose entities," or partnerships that Enron executives allegedly used to hide debt and manufacture profit. "Given the complexity of this bankruptcy, we have made remarkable progress in a relatively short period of time," Denne said.
For now, the company is actively downsizing its far-flung holdings. Enron last month announced an agreement to sell its 9,900-mile North American pipeline unit, now christened CrossCountry Energy Co., to a consortium including veteran oilman Oscar S. Wyatt Jr. for $2.2 billion. The deal could close by the end of the year.
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