Enron Says Notes Dispute Is Settled

Enron Corp. said Monday that it had settled a dispute over notes issued by a partnership created in 1998 to refinance part of the purchase of the top asset in an ill-fated water venture.

The settlement would give note holders $127.5 million and reduce a $1.1-billion bankruptcy claim -- among the largest in Enron’s Chapter 11 bankruptcy case -- to $507.5 million.

The deal is awaiting approval from U.S. Bankruptcy Judge Arthur Gonzalez in New York.

The partnership at the center of the deal, Marlin Water Trust, isn’t among those once run by former Enron finance chief Andrew Fastow and credited with helping fuel the energy company’s failure.

But it helped finance the $2.2-billion acquisition of Britain’s Wessex Water in 1998, once the cornerstone of Azurix, a water subsidiary launched by Houston-based Enron with ambitions of competing with the world’s biggest water companies and making millions trading water.