Enron's Planned End
"Literally the best asset in the company has been the pipelines," said John E. Olson, chief investment officer at Sanders Morris Harris Group Inc. in Houston. "You are getting the pipeline assets away from the taint of Enron. In terms of morale, that's very important."
Enron has sold oil and gas exploration company Mariner Energy Inc., and the sale of Portland General Electric Co. is in the works.
Analysts said that during the company's boom years, top managers scoffed at the slow-growing pipeline business, focusing their attention instead on developing an automated energy trading platform and an Internet broadband business that attracted the attention -- and rising stock price -- of Wall Street investors.
But the broadband unit disintegrated amid technical and sales problems. Former Enron chief executive Jeffrey K. Skilling, a longtime champion of the business, faces criminal charges for allegedly masking its financial troubles. Several other top executives in the broadband unit are scheduled to go to trial in October on securities fraud and related charges. Skilling and the other defendants vigorously deny the allegations. They argue the business was a victim of the bursting of the Internet bubble.
Separately, in early 2002 Enron disposed of its highflying trading group. Two of the company's former traders have pleaded guilty to fraud in connection with manipulating the electricity market, and another is set to stand trial in San Francisco this summer. Recently released transcripts of conversations recorded during the West Coast power crisis of 2000 and early 2001 captured unnamed Enron traders joking about stealing from grandmothers and exchanging profanities as they allegedly schemed to raise energy prices.
Meanwhile, creditors said they were resigned to the partial recovery and hopeful the end is near for the costly case, in which legal and professional bills have totaled $665 million as of last month, the most in any bankruptcy.
"We remain disappointed -- more than disappointed -- with what happened in the Enron bankruptcy case and all the financial impact it has had on Enron creditors," said David M. Bennett, a Dallas lawyer who represents creditors that lost money trading energy with Enron. "We are generally supportive of getting a plan in place. It has been tremendously expensive. . . . We do think the time is now to draw the case to as much of a resolution as possible."
Rod Jordan, a former Enron manager and founder of the Severed Enron Employees Coalition, said: "It's a shame it took this long and so many millions of dollars in legal fees. That money would have been better off going to employees." His group helped many fellow former workers to collect as much as $13,500 each in severance pay.
If the judge approves the plan, which legal scholars said he still could seek to modify, he will set an "effective date" that will mark the end of the bankruptcy process. That could come as early as the end of the month or as late as the end of the year, a company spokeswoman said.
Even then, the legal system won't be through with Enron. The Justice Department's Enron Task Force is moving ahead with its 2 1/2-year-old criminal investigation into fraud at the company. Several high-ranking executives including former chief financial officer Andrew S. Fastow already have pleaded guilty to financial crimes. There also are more than 1,000 pending lawsuits filed by creditors and shareholders still seeking to recover billions of dollars from Enron's former leaders and its investment banking partners.
"The end of all that will certainly be measured in years," said Bennett, the Dallas lawyer.
Staff researcher Richard S. Drezen contributed to this report.
© 2004 The Washington Post Company