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Office of the Chancellor / Public Affairs
Wednesday, January 7, 2004
 

San Gabriel Valley Tribune/AP 1-7-04

Enron asks for ruling on report to creditors
By Kristen Hays

 

HOUSTON -- Enron Corp.'s lawyers asked a bankruptcy judge in New York on Tuesday to rule that the energy company has given creditors enough information to vote for or against the reorganization plan proposed last year.

The 1,400-page disclosure statement Enron has prepared for its more than 24,000 creditors explains how the company imploded in 2001 and how it aims to carry on after emerging from Chapter 11.

U.S. Bankruptcy Judge Arthur Gonzalez told attorneys packed in his courtroom that he intended to address objections from creditors one by one, so discussion of the disclosure statement could last several days.

If he deems the statement informative enough for creditors to digest it and decide on their votes, Enron will send it to the creditors to accept or reject.

Once voting is completed expected to last about three months Gonzalez can revisit the plan for final approval.

"The confirmation hearing is the big step,' said David Skeel, a law professor and bankruptcy expert at the University of Pennsylvania. "The hearing on the disclosure statement is not trivial, because it is a point at which people can complain and you could have a prelude to the final battle.'

Martin Bienenstock, Enron's main bankruptcy lawyer, told Gonzalez that Enron chose to lump the bankrupt parent and its 179 bankrupt subsidiaries into one massive plan to simplify one of the most complex and expensive Chapter 11 cases in history. That "resulted in some creativity, some novelty and some legal issues. All of that we are prepared to address in due course,' he said.

Brian Rosen, another of Enron's lawyers, said at least 13 of 55 initial objections to the plan from creditors have been or will be withdrawn, and the company is negotiating settlements of others.

The University of California, the lead plaintiff in a massive conglomerate of shareholder lawsuits filed in the aftermath of Enron's collapse, wants assurance that confirmation of the plan won't block plaintiffs from adding the bankrupt energy company to the list of defendants that now includes former high-flying executives as well as banks and brokerages that financed multimillion-dollar deals.

"We can probably work out something so that the language is not misconstrued to grant us more relief than we're asking for,' the university's attorney, Craig Reiders, said Tuesday.

Other objectors say the disclosure statement is too vague on several counts, including a request to limit how much money can be recovered by creditors whose claims Enron disputes and the value of assets to be distributed to creditors.

Enron proposes emerging from bankruptcy as separate domestic and international companies with different names.