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.
"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 21/2-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.