Enron to Unveil Restructure Plan
Enron Corp. today will offer creditors a plan that could result in Enron’s reassembling itself as an integrated energy company with $10 billion in assets, Enron’s lead bankruptcy lawyer said.
The plan, drafted by Enron’s new management team, will be presented to Enron’s 15-member official unsecured-creditors committee in New York today and unveiled publicly afterward in a conference call led by Enron’s chief executive, Stephen Cooper.
“What Enron is proposing ... is a method to determine whether its pipelines, power projects and exploration businesses are worth more bundled together or sold separately,” the bankruptcy lawyer, Martin Bienenstock of law firm Weil, Gotshal & Manges in New York, said Thursday.
A reshuffled Enron could quickly be put on the auction block and sold if that’s what creditors demanded, Bienenstock said.
The main idea of the plan is to separate decisions about the best way to maximize the value of Enron’s remaining assets from decisions about how the proceeds will be split among creditors.
Enron filed the largest bankruptcy in U.S. history Dec. 2, owing creditors an estimated $60 billion to $100 billion.
A reconstituted Enron could include Oregon utility Portland General Electric Co., Brazilian utility Elektro, about 15,000 miles of natural gas pipelines in North America and South America and oil and gas exploration operations.
Enron’s investment bankers value the new company’s assets at $10 billion to $20 billion, Bienenstock said. He said the plan aims to save 20,000 jobs at the Houston-based company.
Luc Despins, lawyer for the official creditors committee, did not respond to requests for comment.
Attorneys for other Enron creditors reserved judgment.
“I haven’t seen the plan, but I don’t think Enron has $10 billion worth of assets,” said Rhett G. Campbell, whose Houston law firm, Thompson & Knight, represents a group of Enron energy creditors.
Andrew Entwistle, who represents a Florida state pension plan that lost $334 million on Enron bonds and stock, said it has long been Cooper’s plan to bundle assets into an operating company and offer an ownership stake in the company to creditors to satisfy their claims.
It will be impossible to judge a business plan until Enron’s new court-appointed examiner has completed a preliminary investigation, Entwistle said.
U.S. Bankruptcy Court Judge Arthur J. Gonzalez approved the position last month, but the examiner has yet to be named. Part of the examiner’s job will be to identify the remaining assets, a task that will entail penetrating the thicket of limited partnerships and other “special-purpose entities” Enron created to hide debts and boost its reported profit.
