ENRON FILES BIGGEST BANKRUPTCY IN U.S. HISTORY
December 3, 2001
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Energy trader Enron Corp. yesterday made the largest-ever filing for chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York and sued Dynegy Inc., seeking $10 billion from the rival energy trader for canceling the takeover that was supposed to rescue Enron, Bloomberg reported.
Enron and 13 of its units listed total assets of $49.8 billion and debts of $31.2 billion, dwarfing Texaco Inc.’s 1987 chapter 11 filing of $35.8 billion in assets. The Houston-based company asked that the cases be consolidated, but did not say whether the figures for the assets or debts reflected any consolidation.
Citigroup Inc.’s Citibank unit, with two loans totaling $3 billion, is listed in court papers as Enron’s largest unsecured creditor. Bank of New York represents bond claims totaling $2.4 billion.
Enron said it would dismiss a “substantial” number of its 21,000 employees and use the chapter 11 filing to emerge as an energy-trading company owned in part by unidentified financial institutions. Most of the job cuts will come in Houston, where Enron employs about 7,500 people. Enron spokeswoman Karen Denne said that advanced negotiations on restructuring the trading operations are under way.
Enron Chief Financial Officer Jeffrey McMahon said the company is moving fast to get debtor-in-possession (DIP) financing arranged so that it can continue to operate. Yesterday he said that he hopes to have it within a day although the sum of money still was being negotiated. Top workout bankers for J.P. Morgan Chase & Co. were in Houston yesterday afternoon negotiating DIP financing.
