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Sat, Jul 17, 2004 - Page 12 News List

Enron bankruptcy plan wins approval


More than two years after its spectacular collapse, Enron has won approval to emerge from bankruptcy under a plan in which creditors will receive less than US$0.20 on the dollar and the Enron name will forever disappear.

Once Enron sells off some of its major assets to pay creditors, all that will be left of the scandal-ridden company -- once the nation's seventh-largest -- will be a smattering of pipeline and power assets in 14 countries.

"This is what's left of what had been a US$65 billion asset com-pany," John Olson, a Sanders Morris Harris analyst who has followed Enron since its inception in 1985, said on Thursday.

Houston-based Enron filed for bankruptcy in December 2001 amid revelations of hidden debt and inflated profits. Thousands of people lost their jobs and investors lost billions as the company's once-high-flying stock become worthless.

It was the first in a wave of corporate scandals to rattle Wall Street this decade.

The reorganization plan -- approved on Thursday by a bankruptcy judge in New York -- aims to pay most of the creditors about US$12 billion of the approximately US$63 billion they are owed with cash raised from a series of asset sales.

That includes the pipeline company CrossCountry Energy and the utility Portland General Electric.

Shareholders will get nothing. Employees who lost their savings wrapped up in Enron stock are relying on lawsuits to get some payback.

What is left of Enron will be called Prisma Energy International, which has gas pipelines and power plants around the globe.

Enron's once-envied energy-trading operations were snapped up by Swiss investment bank UBS two months after it went bankrupt.

Its broadband operation that never made a profit or lived up to grand video-on-demand promises went bankrupt with its parent. The retail energy unit that promised to deliver power to large customers, including Pacific Bell Park in San Francisco, crumbled as well.

"Beyond the hard assets in their pipelines and particularly their utility, Enron was largely a gigantic collection of paper assets whose value, in hard times, turned out to evaporate," Olson said.

Dozens of people, including Enron founder and former chairman Kenneth Lay have been charged with crimes in the US federal government's ongoing investigation of the collapse.

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