HOUSTON – More than two years after its spectacular collapse, Enron won approval Thursday to emerge from bankruptcy under a plan in which creditors will receive less than 20 cents 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 seventh-largest in the world – will be a smattering of pipeline and power assets in 14 countries.
“This is what’s left of what had been a $65 billion asset company,” said John Olson, a Sanders Morris Harris analyst who has followed Enron since its inception in 1985.
Houston-based Enron filed for bankruptcy in December 2001 amid revelations of hidden debt and inflated profits accomplished through a tangle of accounting trickery. Thousands of workers lost their jobs and investors lost billions as the company’s once-high-flying stock became worthless.
The reorganization plan – approved Thursday by a bankruptcy judge in New York – aims to pay most of the creditors about $12 billion of the approximately $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 Primsa Energy, which has gas pipelines and power plants around the globe.
Unlike airlines or other large companies that go into bankruptcy and then emerge largely intact, the ventures that once defined Enron as a leader in energy and other markets are long gone.
Enron’s once-envied energy-trading operations were snapped up by Swiss investment bank UBS two months after it went bankrupt.
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