Enron sits on verge of selling off top assets
By Kristen Hays
Associated Press
HOUSTON — A year after careening into what was then the largest bankruptcy in history, Enron Corp. could be on the verge of selling off its 12 most valuable assets and disappearing from the corporate landscape.
That is, if creditors agree liquidation is their best shot at recouping what they can from the company, whose failure preceded a string of business scandals in 2002.
"It looks like it is going to take us over a year and tens of millions of dollars in administrative fees to get to the point that should have seemed obvious from the beginning: Enron should be put up for auction," said Todd Zywicki, a bankruptcy law professor at George Mason University.
Enron is currently taking bids on the non-bankrupt assets that have generated most of its income for the last year, including Portland General Electric, the Portland, Ore., utility acquired in 1997 that serves 740,000 customers in the Pacific Northwest; and whole or part ownership in three pipelines.
Spokesman Mark Palmer said final bids and purchase agreements would be in by late December. If creditors favor a selloff, bids will be presented to U.S. Bankruptcy Judge Arthur Gonzalez in New York in early January.
"Whether we liquidate or stay together, the question is, 'Are they worth more sold?' " Palmer said. "Or if the market doesn't value them, will we combine them into a new company that creditors hold equity in? It's a mathematical, economic decision."
When restructuring specialist Stephen Cooper became Enron's interim chief executive in late January, he insisted a slimmed-down Enron would emerge from Chapter 11 within a year, focused on moving natural gas and electricity much like the original Enron formed in 1985.
Ranked seventh on the Fortune 500 two years ago, with $100 billion in revenues, Enron declared bankruptcy Dec. 2, 2001, fueled by shady accounting, hidden debt and inflated profits. Stock that traded at $90 in August 2000 plummeted to pennies, costing investors millions of dollars and leaving employees and retirees with evaporated 401(k) accounts.
The next day, more than 4,000 laid-off Enron workers streamed out of the company's 50-story headquarters in downtown Houston, facing limited job prospects in a weakened economy.
Now the bankruptcy is among the 3,600 questions in the new 20th anniversary edition of the board game Trivial Pursuit, released this year. Tomorrow, the anniversary of Enron's mass layoffs, the company will hold its second multiple-day auction of surplus equipment, featuring signature tilted-E logo signs that used to be outside the headquarters and in its lobby. A similar auction in September netted $3.3 million.
