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Enron Mail |
Laid-off Enron employees caught by health insurance glitch Associated Press Newswires, 01/05/2002 Former Enron workers left in insurance limbo / Company fails to complete pa= perwork Houston Chronicle, 01/05/2002 COMPANIES & FINANCE INTERNATIONAL - Bidders line up in battle for Enron sta= ke. Financial Times, 01/07/2002 Companies diary - Crucial stage in Enron saga comes into spotlight. Financial Times, 01/07/2002 Enron nears crucial decision on trading arm. Financial Times, 01/07/2002 OTC regulation flaws exposed by Enron. Financial Times, 01/07/2002 Enron? We're Missing The Point The Washington Post, 01/06/2002 Investors to be more wary of credit products. Financial Times, 01/07/2002 OBSERVER - Good news for Kinko's - AVENUE OF THE AMERICAS. Financial Times, 01/07/2002 Wiser Oil Seeks Separate Enron Power Creditor Panel Dow Jones Corporate Filings Alert, 01/07/2002 Preview / WEEK OF JAN. 7-12 Enron Creditors Want Case Moved to Houston Los Angeles Times, 01/07/2002 Dynegy Gets Info From Enron Related To Venue Motion Dow Jones News Service, 01/07/2002 Bush's first big scandal rises from the ashes of Enron The Independent - London, 01/06/2002 Watch Out For... Fortune Magazine, 01/07/2002 Enron Canada Corp To Assume New Form: CEO Dow Jones Energy Service, 01/07/2002 Houston feels pain of Enron's collapse ; Insecurity is tempered by cockines= s The Washington Times, 01/06/2002 US Lindsey:Govt Response To Enron 'Tribute' To Capitalism Dow Jones International News, 01/06/2002 Texas powers up for deregulation; Skeptics recall California debacle Chicago Tribune, 01/07/2002 Texas Lets Consumers Pick Power Source As Other States Are Watching Experim= ent The Wall Street Journal, 01/07/2002 Investigating Enron The Washington Post, 01/06/2002 Investigating Enron Corp. The Milwaukee Journal Sentinel, 01/06/2002 The 401(k) terrorists The San Francisco Chronicle, 01/06/2002 Interview: Senators John McCain and Joseph Lieberman discuss the war in Afg= hanistan and the US economy NBC News: Meet the Press, 01/06/2002 Interview With John Breaux CNN: Evans Novak Hunt & Shields, 01/06/2002 Culpable Executives The Washington Post, 01/06/2002 _________________________________________________________ Laid-off Enron employees caught by health insurance glitch 01/05/2002 Associated Press Newswires Copyright 2002. The Associated Press. All Rights Reserved. HOUSTON (AP) - A paperwork delay has caused the approximately 4,500 Enron C= orp. workers laid off by the foundering energy giant to go without health i= nsurance temporarily, forcing at least one ex-employee to put off cancer su= rgery.=20 Many employees, including Mike Black, had planned to continue their Enron b= enefits after their expiration last month under federal rules set up by the= Consolidated Omnibus Budget Reconciliation Act, or COBRA. But Black, who had to cancel skin cancer surgery set for last Thursday, and= his fellow former Enron mates learned the company failed to complete all t= he necessary paperwork in time for coverage to continue into January.=20 Enron planned to have COBRA information mailed to workers three weeks after= their termination, but spokeswoman Karen Denne said it's taken longer than= expected.=20 Ex-workers should receive the paperwork by Jan. 15, Denne said.=20 The delay has left Black, a systems programmer who can't afford the operati= on without insurance, in limbo.=20 "I'm still waiting for my second unemployment check," Black said.=20 Black, 54, said he's been unable to get any COBRA information from Enron, t= he insurance plan administrator or the insurance company.=20 It seems as if "they're all pointing fingers at each other," Black told the= Houston Chronicle.=20 Matt Isbell, president of consulting company COBRA Resources, said the prob= lem is not unusual because of the complex process. Companies have 44 days t= o notify an individual they can buy the coverage, Isbell said.=20 During that time, former workers are on their own until they receive COBRA = coverage. After that, qualifying expenses are reimbursed.=20 Black's not willing to front his surgery costs, however, because COBRA coul= d disappear altogether if Enron switches its bankruptcy filing from Chapter= 11, or reorganization, to Chapter 7, which is liquidation.=20 Another worker, Candace Womack, didn't find out her insurance had lapsed un= til New Year's Day, when she got out of the hospital from heart surgery and= needed to buy prescriptions.=20 Womack, who worked in software support, carried health insurance for her fa= mily.=20 "I'm getting a little ticked about the situation," said Womack, 51, who add= ed that she was able to sign up for COBRA coverage before she walked out th= e door after she was laid off from another company in the mid-1990s. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 NEWS Former Enron workers left in insurance limbo / Company fails to complete pa= perwork L.M. SIXEL Staff 01/05/2002 Houston Chronicle 3 STAR 1 (Copyright 2002 Houston Chronicle) Mike Black has skin cancer and was planning to have an operation Thursday.= =20 But he had to cancel the surgery when he discovered his health insurance pl= an is in limbo. Like the rest of the 4,500 workers laid off from Enron Corp. Dec. 5, Black = had health insurance coverage through the end of December and was planning = to continue his coverage under the federal rules set up by the Consolidated= Omnibus Budget Reconciliation Act.=20 But he found out this week Enron failed to finish all the necessary paperwo= rk so the laid off workers could participate in COBRA beginning in January.= =20 COBRA requires employers to offer health insurance to their terminated empl= oyees for up to 18 months. Though COBRA is very expensive - the employee pa= ys the entire cost of the plan, which is usually subsidized by an employer = - it is designed to provide seamless health care coverage for the recently = laid off worker.=20 But Enron officials said the company hasn't been able to process the COBRA = paperwork fast enough.=20 The company planned to have the COBRA information mailed to workers 21 days= after they were terminated but it's taken longer than Enron expected, said= Enron spokeswoman Karen Denne. The layoffs and bankruptcy filing were so s= udden that the company didn't have time to prepare in advance.=20 Employees should receive the COBRA paperwork by Jan. 15, Denne said. If the= y don't, they should contact the benefits office.=20 A benefits consultant in Houston said she isn't surprised about Enron's del= ay. COBRA can be a "paperwork nightmare." Documentation has to be sent to n= ot just all employees but to all the employee dependents who are covered, s= he said, asking not to be identified.=20 But to employees like Black, the delay is devastating. When his insurance c= overage couldn't be verified, Black said he couldn't afford to pay for the = operation out of his own pocket.=20 "I'm still waiting for my second unemployment check," he said.=20 Black is frustrated because he can't get any information about COBRA insura= nce from Enron. He said that when he calls the company's benefits office, e= mployees there don't know the answers to his questions. Neither does the pl= an administrator, and the insurance company seems to be in the dark, too, h= e said.=20 It seems as if "they're all pointing fingers at each other," said Black, wh= o was a systems programmer at Enron.=20 Enron could have done it faster, he said, suggesting that arranging COBRA c= overage is low on the company's priority list.=20 It's not an unusual problem, said Matt Isbell, president of COBRA Resources= , a company that conducts COBRA training seminars in Kalamazoo, Mich.=20 Companies have at least 44 days to notify an individual employee that they = can buy COBRA coverage, Isbell said. And depending on a company's plan docu= ments, that waiting period can be even longer if the clock doesn't start un= til the last day of regular insurance coverage.=20 During that time, employees have to foot their own medical bills, he said. = But once the employee applies for COBRA and pays for it, the bills are reim= bursed.=20 Black knows that but he's worried that Enron may convert its bankrupty fili= ng from a Chapter 11, which provides protection from creditors while underg= oing reorganization, to a Chapter 7, which would liquidate the company. If = that happened, health insurance would disappear and so would COBRA, leaving= the 54-year-old with a bunch of unpaid bills.=20 Candace Womack found out she had no insurance when her husband went to the = pharmacy Wednesday to fill several prescriptions. Womack had just had heart= surgery and was released from the hospital New Year's Day.=20 Instead of paying the $10 co-pays, her husband had to pony up $250 to pay f= or antibiotics and blood pressure medicine because Womack's insurance had b= een canceled. Womack worked in software support for Enron until she lost he= r job last month.=20 Now she's worried about how she'll pay for the follow-up medical visits to = her surgeon.=20 Like many of the laid-off employees, Womack carried the insurance for her f= amily. Her husband is self-employed, and it's usually much more expensive t= o buy an individual insurance policy than it is to pay for a company subsid= ized plan like Enron's.=20 "I'm getting a little ticked about the situation," said Womack, who is 51.= =20 Womack said the disaster she faces now is in such sharp contrast to when sh= e lost her job in the mid-1990s.=20 Then, she had been working for First Interstate bank and was able to sign u= p for COBRA coverage before she even walked out the door. Photo: Mike Black, a former Enron employee, had to cancel his skin cancer o= peration after discovering Enron failed to finish paperwork necessary for l= aid off workers to have continued insurance coverage under COBRA (color)=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 COMPANIES & FINANCE INTERNATIONAL - Bidders line up in battle for Enron sta= ke. By ROBERT CLOW and ANDREW HILL. 01/07/2002 Financial Times © 2002 Financial Times Limited . All Rights Reserved COMPANIES & FINANCE INTERNATIONAL - Bidders line up in battle for Enron sta= ke - COLLAPSE AT LEAST THREE COMPANIES LIKELY TO BID FOR CORE ENERGY TRADIN= G BUSINESS.=20 At least three companies are likely to bid for control of Enron's core ener= gy trading business by today's deadline, according to the bankrupt US compa= ny's advisers. Citigroup, the US bank that is also one of Enron's main creditors, is likel= y to be one of the bidders, according to other people close to the process.= =20 It will not be clear until later in the week if all the potential bidders h= ave submitted offers, but if the auction is successful, it will boost the c= onfidence of Enron creditors.=20 Any delay in striking a deal could damage the chances of Enron reviving its= trading operations and restructuring the rest of the company. Enron's trad= ers are locked in by incentives for a limited time, and trading counterpart= ies, bruised by the sudden collapse of the company, are already sceptical a= bout dealing with a revitalised trading operation=20 Enron advisers said yesterday that all the potential buyers of a majority s= take were sufficiently creditworthy to restore customers' confidence in the= trading business. "That (creditworthiness) is not a problem," said Martin = Bienenstock of Weil Gotshal & Manges, Enron's lawyer.=20 "We're expecting a number of bids," said a spokesman for Blackstone Group, = financial adviser to Enron, yesterday.=20 The auction will be held on Thursday and a bankruptcy court hearing has bee= n scheduled for Friday to approve a partner for the trading operation.=20 Enron hopes to auction off the assets, technology and key staff of its core= trading operation, forming a joint venture in which the energy group would= maintain a minority stake.=20 Banks, led by Citigroup, are the most likely buyers of a majority stake. UB= S of Switzerland had expressed interest before Christmas, but the Swiss ban= k's enthusiasm for making an offer has cooled since, according to people in= volved. Neither bank would comment last week.=20 People close to the procedure said last week that Enron's cash flow was bet= ter than originally expected and it had not yet drawn on the $250m of emerg= ency funds available as part of its $1.5bn debtor-in-possession financing p= ackage. They said Enron might even reduce the size of the loan to avoid pay= ing unnecessary charges.=20 In a separate hearing today, a number of Texas creditors will argue for the= whole procedure to be switched from New York to Houston, where Enron has i= ts headquarters.=20 © Copyright Financial Times Ltd. All rights reserved.=20 http://www.ft.com. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Companies diary - Crucial stage in Enron saga comes into spotlight. By EDITED BY MARTIN BRICE. 01/07/2002 Financial Times - FT.com © 2002 Financial Times Limited . All Rights Reserved The latest moves in the Enron saga take place, with this week being crucial= to the future of operations. The deadline passes for bids, while the forma= l auction takes place and the buyer may be approved for the energy trading = unit. A series of post-Christmas trading updates from UK retailers will be = examined for indications of the strength of consumer spending.=20 MONDAY Monday is the deadline for companies to bid to form a joint venture with En= ron's energy trading business, the core of the bankrupt company. Citigroup = and UBS had both expressed interest in the business, which Enron believes c= an be revived with the help of a credit-worthy partner. A formal auction wi= ll be held by the bankruptcy court on Thursday, assuming more than one comp= any comes forward, and a hearing has been set for Friday to approve a buyer= . Administrators to Enron Corporation are close to the sale of the London-b= ased metals trading business of the collapsed US energy group. The deal, wh= ich would be the third significant disposal to be negotiated in the UK sinc= e Enron's European operations were put into administration at the end of No= vember, could be announced within days. Potential buyers for all or parts o= f the business are Glencore, the Swiss commodities trader, Sempra Energy of= San Diego, HSBC and Goldman Sachs. PricewaterhouseCoopers, which is acting= as administrator, is understood to have singled out one of the interested = parties and is expected to finalise the sale over the weekend or early next= week. A sale had been expected before Christmas, but was delayed because o= f difficulties in unravelling the complex corporate structure. TUESDAY=20 Alcoa, the world's largest producer of aluminium, is expected to report fou= rth-quarter earnings per share of 10 cents, far short of the 45 cents earne= d a year ago, as anaemic demand for aluminium in the auto and aerospace sec= tors is expected to strongly hit impact the company's bottom line, analysts= said. Two weeks ago Alcoa pre-announced its fourth-quarter earnings per sh= are expectations of 10 cents, excluding a $225m after-tax restructuring cha= rge. Lower volumes, depressed metal prices and an overall weak downstream m= arket will all weigh on fourth-quarter results, trimming full-year earnings= to $1.43 compared with $1.81 last year. The company's current estimate of = 10 cents is well below the previous forecast of Wall Street analysts' conse= nsus of 30 cents. AFX, New York=20 Interim figures from Pace Micro Technology, the UK television set-top box m= aker, may contain news on progress in the US. It said at the final results = announcement in July that sales in the US were likely to grow faster than i= n the more mature UK market. In that context, investors may be keen to hear= how contracts with AOL Time Warner and Comcast of the US are progressing. = Analysts expect Malcolm Miller, chief executive of Pace, to announce a rise= from GBP18.4m ($26.7m) in profits before exceptionals to GBP19.3m, on sale= s up from GBP205.8m to GBP215.7m in the six months to the end of November.= =20 One of the most eagerly-awaited of the post-Christmas trading statements is= expected from Next, the UK clothing retailer. It said on the morning of Se= ptember 11 that like-for-like sales were up 8 per cent, while Next Director= y sales were 20 per cent ahead of the previous year.=20 WEDNESDAY=20 Oc, the Dutch repro-graphics group, will report for the fiscal year to Nove= mber 30 net profit before extraordinary items of 106.7m-109m, down from 152= m ($133.8m) a year earlier, analysts said. Earnings per share after preferr= ed dividends are forecast to fall to 1.14-1.21 from 1.76 a year earlier. In= a pre-announcement in December, the company forecast a 30 per cent fall in= net profit before extraordinary items with sales unchanged. Oce also plans= to take a restructuring charge of 125m. AFX, Amsterdam=20 Interim figures from Dixons, the UK consumer electronics retailer, are expe= cted to be between GBP80m-GBP87m for the six months to October, against GBP= 90.8m before exceptionals and losses at Freeserve, the sale of which makes = comparisons difficult. However, a trading update is likely to overshadow th= e figures.=20 Additional reporting by Andrew Hill in New York and Alex Skorecki in London= .=20 © Copyright Financial Times Group.=20 http://www.ft.com. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron nears crucial decision on trading arm. By ANDREW HILL AND ROBERT CLOW IN NEW YORK. 01/07/2002 Financial Times - FT.com © 2002 Financial Times Limited . All Rights Reserved Enron will find out whether there is sufficient interest in its core energy= trading operations to justify an auction of a majority stake this week.=20 According to people close to the bankruptcy procedure, potential bidders we= re still conducting due diligence examinations of the business late last we= ek. The deadline for formal offers is Monday. If there are enough bids, the ban= kruptcy court will hold an auction on Thursday. A court hearing has been sc= heduled for Friday to approve a partner for the trading operation.=20 Enron hopes to auction off the assets, technology and key staff of its core= trading operation, forming a joint venture with a creditworthy buyer, poss= ibly a bank, in which the energy group would maintain a minority stake. The= trading book is unlikely to be sold because of the size of Enron's liabili= ties to customers.=20 A long delay would be fatal to the prospects of reviving the business. Trad= ers are locked in by incentives for a limited time and trading counterparti= es, bruised by the collapse of Enron, are already sceptical about dealing w= ith a revitalised trading operation.=20 Martin Bienenstock of Weil Gotshal & Manges, Enron's lawyer, warned before = Christmas that if the deal was not closed in early January, traders would "= simply be compelled to find other jobs with other financial entities".=20 Citigroup is more likely to take a stake in the business, but it has not ye= t come forward with a stalking-horse offer, which would set a base for the = auction. Interest from UBS has cooled, according to people involved. Neithe= r bank would comment. Rival energy companies said they were unlikely to bec= ome partners of the trading business.=20 The creditors' committee might still select a stalking-horse, but one credi= tor said that even without an opening bid the committee was confident that = a partner would be found.=20 People close to the procedure said last week that Enron's cash flow was bet= ter than had been expected and it had not yet drawn on the $250m of emergen= cy funds available as part of the $1.5bn debtor-in-possession financing pac= kage arranged last month.=20 Court approval of the package has been postponed to January 30, but bankers= have played down concerns that it would be difficult to syndicate the fina= l $1bn tranche of the loan.=20 In a separate hearing on Monday, the New York bankruptcy court will hear ar= guments for the procedure to be switched to Houston where Enron has its hea= dquarters.=20 © Copyright Financial Times Group.=20 http://www.ft.com. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 OTC regulation flaws exposed by Enron. By NIKKI TAIT. 01/07/2002 Financial Times - FT.com © 2002 Financial Times Limited . All Rights Reserved The furore over Enron - and cries from some quarters for greater regulation= - come exactly one year after the US believed that it had put to rest the = issue of derivatives trading supervision.=20 On a Friday night, December 15 2000, Congress passed complex and highly tec= hnical legislation which essentially ensured that much of the $94,000bn ove= r-the-counter derivatives industry would operate outside the nation's commo= dities laws. Senator Phil Gramm helped to resurrect the legislation after the House agri= culture committee added a special exemption from regulation for EnronOnline= , according to Michael Greenberger, a former official of the Commodity Futu= res Trading Commission. The package, attached to 200 pages of legislation o= f an 11,000-page general public funding bill, was barely noticed in the rus= h to adjourn Congress.=20 Much of America's regulatory regime was devised at a time when derivatives = trading consisted mainly of standardised futures contracts transacted throu= gh third-party exchanges like the Chicago Board of Trade, and involving tra= ditional commodity products such as corn or soyabeans.=20 But during the 1980s and 1990s, a good deal of risk-management action had s= hifted to the over-the-counter market, where banks and trading firms negoti= ated bilateral contracts (often called "swaps") on an individual basis. The= re had also been phenomenal growth in financial contracts - hedging interes= t rate or currency exposures, for example. Finally, the proliferation of el= ectronic trading systems made it easier to transact business outside the US= , if regulatory regimes were kinder elsewhere.=20 For participants in the swaps markets one of the biggest concerns is that t= he Commodity Futures Trading Commission, set up to regulate the futures mar= kets, might seek to extend some authority to OTC markets. Brooksley Born, h= ead of the agency in the late-1990s, felt strongly about the issue and the = problems at Long-Term Capital Management offered her some vindication.=20 But swaps dealers argued that if swaps were deemed futures (giving the CFTC= jurisdiction), counterparties with losing positions could argue the deals = had been transacted illegally. Accordingly, the big Wall Street banks deman= ded "legal certainty", to ensure that OTC transactions were not caught in t= he regulatory net. Satisfying that demand was one important element of last= December's legislation.=20 Separately, the legislation also set out a new regulatory structure for exc= hanges - with the degree of supervision highly dependent on the type of pro= duct traded and the nature of market participants. Certain commodity produc= ts, in finite supply, are susceptible to manipulation. Moreover, if retail = customers were to be involved with a market, there would be a need for a de= cent degree of oversight. Conversely, sophisticated players, trading hard-t= o-manipulate financial contracts, could look after themselves.=20 Little of this applied to EnronOnline, however. Although outsiders may have= viewed its trading activities as equivalent to an exchange, EnronOnline wa= s structured so that the company itself was the counterparty to transaction= s handled by its trading unit. That made its business model very different = from a traditional exchange, which serves as a neutral forum.=20 Few of the participants in last year's debate seem to have changed their vi= ews significantly. But regulators who believed that largely-unsupervised OT= C trades could be a Pandora's box in future, still think last year's legisl= ation a regressive step. "The Commodity Futures Modernisation Act [of 2000]= sanctioned opaque markets," says Michael Greenberger, former director of t= he trading and markets division of the CFTC.=20 Conversely, observers in the swaps industry argue Enron's difficulties did = not originate in its trading activities - the trading operations suffered w= hen other problems caused the group's credit standings to collapse. "EnronO= nline was a highly innovative means of servicing clients for nine months of= the year," says Robert Pickel, executive director of the International Swa= ps and Derivatives Association, stressing that the trading arm had provided= "convenient and cost-effective management of risk".=20 However, even advocates of the lighter, less proscriptive regulatory regime= had cautioned that the relatively new area of energy derivatives trading c= ould pose issues that trading of financial swaps did not.=20 "Most dealers in the swaps market are either financial institutions subject= to supervision by bank regulatory agencies, or affiliates of broker-dealer= s regulated by the SEC, or affiliates of FCMs [futures trading firms] subje= ct to CFTC oversight," Bill Rainer, the CFTC's former chairman told a congr= essional committee in June. "The same cannot be said of trading in energy d= erivatives ... Thus a principal argument warranting the exclusion of financ= ial derivatives from the Commodity Exchange Act - the fact that derivatives= trading in these products is subject to direct or indirect federal oversig= ht - does not apply to OTC energy transactions."=20 © Copyright Financial Times Group.=20 http://www.ft.com. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Outlook Enron? We're Missing The Point Lanny J. Davis 01/06/2002 The Washington Post FINAL B01 Copyright 2002, The Washington Post Co. All Rights Reserved Here's a paradox: Despite predictions of doom from many financial writers, = it doesn't matter very much that Enron -- at one time touted as the seventh= -largest company in the nation -- failed. What matters is why it failed.=20 Enron's demise will be little more than a blip on the U.S. economy, with th= e big losers confined to the same financial speculators who rode the bubble= on the way up. But the underlying cause of Enron's fall -- a corporate cul= ture of secrecy and obfuscation -- is not unique to that company. Far from = it. Enron's problems are emblematic of myriad public companies in the 1990s= , from dot-com start-ups to some of America's biggest corporations, who yie= lded to the pressure to inflate their stock by whatever means possible. If that culture isn't replaced by more transparency and accountability, reg= ulated and enforced by the Securities and Exchange Commission (SEC) and U.S= . prosecutors, the credibility and integrity of the various stock markets i= n which millions of Americans are now invested could be seriously undermine= d. That's why I hope that Sen. Joseph I. Lieberman (D-Conn.) meant it when = he said Wednesday -- after his Senate Governmental Affairs Committee announ= ced it would subpoena Enron's top executives and directors -- that the comm= ittee's focus will be "to make sure that something like this never happens = again."=20 I know something about the culture of obfuscation. I have spent much of the= past three years representing public companies and executives accused of a= ccounting and financial fraud. Sometimes I have been lucky enough to be cal= led in before the bad news hit the fan. But more frequently, I arrived afte= r information had begun to leak out.=20 In one instance, the new CEO of a Nasdaq-listed company, Lernout & Hauspie = Speech Products, retained me and my law firm. He told me he suspected that = the books of the language translation software company had been cooked by t= he company's former CEO. The company, he said, had created the appearance o= f dramatic growth by establishing outside entities -- investment companies = in which money from investors was being used to purchase what turned out to= be mostly nonexistent products and services. Liabilities and losses were b= eing hidden in these entities and not included in the company's financial s= tatements.=20 The new CEO suspected that some members of the board of directors might be = complicit. The Wall Street Journal had been writing bits and pieces of the = story, but the company, based in Belgium, had either stonewalled or had giv= en out misinformation.=20 We quickly initiated a two-part strategy based on complete transparency: Fi= rst, we decided to support an investigation by outside auditors and a new l= aw firm, with a commitment to publish the results and cooperate fully with = the SEC; second, we proposed a program of internal reform to clean up the l= ast vestiges of misleading financial reporting. While we knew the company's= high-flying stock would take a major beating once we made these disclosure= s, we believed this strategy offered the only hope for the survival of the = company.=20 However, we ran into a glitch. The company's board of directors opposed ful= l disclosure. The new CEO defied the board and directed me to give the repo= rt to the Wall Street Journal and to other newspapers and to post it on the= company's Web site. We both agreed he had no alternative if he were to avo= id becoming part of the coverup. One immediate result of our strategy: The = new CEO was summarily fired by the board -- as were my law firm and I. Anot= her result: A short time later, the company filed for bankruptcy and was li= quidated. The former CEO and some board members were charged with fraud and= stock manipulation. All have denied these allegations. The investigation i= s continuing.=20 So you can see why I took such an interest in the rise and fall of Enron. A= s Yogi Berra would say, "It's de{acute}ja{grv} vu all over again." Enron, t= oo, developed outside entities that supposedly generated revenues for the c= ompany, while keeping the expenses and contingent liabilities associated wi= th those transactions off the books. And Enron's business, like Lernout & H= auspie's, didn't focus on selling real products to consumers with real prof= it margins. Rather, Enron was essentially a broker: It bought, resold and i= nvested in commodities futures contracts, gambling on future prices and mar= ket conditions. One example of this business model is a brokerage company s= uch as Goldman Sachs. But perhaps a more apt analogy is Las Vegas.=20 It really didn't matter what commodities Enron was betting on. Although it = was known as an energy company, trading in natural gas and electricity cont= racts, it also speculated in water contracts, advertising and time contract= s, complex derivatives, broadband capacity futures and weather derivatives = (whatever that means). Its former chief executive, Jeffrey K. Skilling, act= ually once boasted about the company's absence of hard assets. He proudly d= escribed its approach as "asset lite," adding: "In the old days, people wor= ked for assets. We've turned it around -- what we've said is, the assets wo= rk for people."=20 This characterization is the key to understanding both the breathtaking spe= ed of Enron's collapse and the reason its failure will not have much impact= on the nation's economy. Enron's geometric growth from a sleepy natural ga= s pipeline company in the '80s to a global giant -- with 21,000 employees, = 3,500 subdivisions around the world and, by the summer of 2000, a total "ma= rket capitalization" value of more than $80 billion -- was based on percept= ion rather than reality. As long as everyone saw the stock price going high= er and higher, people were willing to bet their money (through loans, equit= y investments and credit on trades) on Enron. J.P. Morgan Chase & Co., for = example, lent Enron $500 million without security and another $400 million = purportedly secured by something.=20 But if you live by the perception and the illusion of growth, then you die = by it once reality sets in. Being "asset lite" meant that once Enron's numb= ers and disclosures became suspect, there was no foundation of hard assets = -- real products with real value -- to fall back on. Not surprisingly, once= the first card of credibility was lost, the rest of the house collapsed qu= ickly. On Oct. 17, Enron was forced to announce that it had hidden $1 billi= on of losses resulting from the outside entities; the next day it reduced i= ts assets by $1.2 billion. Just six weeks later, on Dec. 2, after weeks of = putting out deceptive information, Enron filed for bankruptcy. Its stock pr= ice had fallen from $90 a share in the previous year to just 87 cents.=20 The fallout? Thousands of Enron employees who lost their jobs and much of t= he value of their 401(k) pension plans, which included now-worthless Enron = stock, will feel a deep impact. Because of decisions made by senior managem= ent, these employees were not allowed to sell the stock as it was dropping = in value, though those same managers had sold nearly $1 billion worth of sh= ares throughout the year. Others likely to suffer from the company's failur= e are the banks, investors and trading partners who willingly advanced Enro= n their money as the stock soared.=20 But it's hard to feel much sympathy there. Consumers won't really notice th= e difference. The electricity, natural gas and water supplies that were the= subject of Enron futures contracts will still be delivered to their homes = one way or the other. Speculators in Enron's "weather derivatives" may have= lost some money, but that's not likely to have much effect on whether it r= ains or shines each day.=20 So if Enron's fall doesn't really matter in macroeconomic terms, why should= we care? Because the corporate culture that bred that failure has undermin= ed trust in the integrity of the public markets. The goal of "meeting the n= umbers" projected by analysts for each quarter has too often become the ove= rriding goal -- to be achieved in the accounting department if it cannot be= achieved in the marketplace. As Michael R. Young has written in "Accountin= g Irregularities and Financial Fraud," his seminal book, "What moves financ= ial markets is the published expectations of Wall Street analysts." They "a= re perceived to establish, within a very narrow margin, the parameters for = the upcoming actual financial results. Analyst expectations have become, in= effect, a company's reported earnings."=20 With millions of Americans now invested in the stock market, this is no lon= ger a concern limited to financial elites. We cannot afford to preserve a s= ystem in which perception is more important than reality.=20 The solutions are as obvious as they are unlikely to be met. The rule of th= umb must be transparency, in word as well as deed. On a technical level, ac= counting rules and disclosure requirements have to be tightened up. Off-bal= ance-sheet entities that create even the slightest contingent liabilities s= hould be incorporated into the company's publicly filed financial informati= on. We must also move to a system of real-time financial disclosures, with = online access to the latest financial information. This is what SEC policym= akers and congressional investigators should concentrate on.=20 In addition, white-collar criminals who cook the books should be prosecuted= , sent to jail and required to disgorge profits from all stock sales made d= uring the period of fraud, rather than receiving what is too often a slap o= n the wrist and a reminder to the corporate world that crime can pay.=20 Finally, corporate managers must practice the basic rules of crisis managem= ent -- which may mean defying the advice of many of their lawyers -- when t= hey learn about bad news that could hurt the company's stock price. The tru= th will come out anyway, and dribs and drabs will only make its impact wors= e. So you might as well put it out yourself -- and then do something to fix= the problem.=20 Of course, this advice to tell all the truth has been rejected, time and ag= ain, and not only by business executives. It has been ignored by politician= s as well. The effect on the public's trust -- whether shareholders' or vot= ers' -- has been the same.=20 Lanny Davis, special counsel to President Clinton from 1996 until 1998, is = partner at the law firm of Patton Boggs and serves on its legal crisis mana= gement team. He is the author of "Truth to Tell: Tell It Early, Tell It All= , Tell It Yourself" (Free Press). http://www.washingtonpost.com=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Investors to be more wary of credit products. By JENNY WIGGINS. 01/07/2002 Financial Times - FT.com © 2002 Financial Times Limited . All Rights Reserved As Enron's bankruptcy has rippled through the markets, inflicting losses on= holders of its shares and bonds, the credit derivatives market is among th= e sectors counting the costs of the energy trader's failure.=20 EnronOnline, which rapidly became the world's largest e-commerce site, was = best known for its role in natural gas, power and crude oil trading. But at= its height it offered more than 1,200 products, including bandwidth deriva= tives, weather derivatives, emissions credits, pipeline capacity and credit= derivatives. The credit derivatives market has exploded in recent years, with the global= market for credit derivative contracts growing from about $50bn in 1996 to= more than $1,200bn today.=20 The market has become ever more sophisticated, evolving into an alternative= to the cash market.=20 Enron was one of the market's most active players, being both a dealer and = a traded company. Through a credit derivatives exchange known as Enron Cred= it it encouraged other companies to use Enron to manage their credit exposu= re.=20 But following the collapse, and the negative impact on some of the credit d= erivative structures to which Enron was exposed, industry players predict i= nvestors will approach the market with greater caution.=20 "You're going to see people kind of stepping back and looking at collateral= and thinking about the structures before they buy," says John Tierney, hea= d of credit derivatives research at Deutsche Bank.=20 Investors are also likely to look more closely at the way rating agencies a= ssess credit derivative structures, he adds. Ratings agencies have put nume= rous US and European credit derivative transactions containing Enron exposu= re on review for downgrade, reflecting possible losses for investors.=20 Previously an investment grade company with large amounts of debt and good = liquidity, Enron was at one time an attractive asset to trade in the credit= default swap market.=20 Credit default swaps are the most commonly traded credit derivative, provid= ing insurance-like protection from the risk of default. There are two parti= es in a credit default swap: one party (the protection seller) receives a p= remium from another party (the protection buyer) for assuming the credit ri= sk of a specified entity. In return for the premium, the protection buyer r= eceives a payment from the seller in the case of the specified entity under= going a "credit event", such as a default.=20 Total exposure to Enron via the credit derivative market has been estimated= at as much as $6.3bn by Standard & Poor's. Much of this exposure occurred = through complicated structured finance vehicles known as synthetic collater= alised debt obligations (CDOs). These sell credit protection through a port= folio of credit default swaps, pooling a large number of credits, typically= credits which are investment-grade.=20 CDOs give investors the opportunity to participate in a range of "tranches"= of varying credit quality. The most junior tranche, often referred to as t= he "equity" portion of the deal because it offers a high, equity-like retur= n, is the most risky.=20 Insurance companies and banks are among the biggest investors in CDOs. The = structures provide insurance companies with a means of diversifying credit = risk and offer relatively high rates of return.=20 Analysts and ratings agencies say exposure to Enron via CDOs should be "man= ageable". But the downgrading of many CDO transactions following Enron's co= llapse shows the difficulty of gauging many of the risks.=20 Although exposure to individual credits within synthetic CDO transactions a= re limited to very small amounts - exposure to any one credit is usually le= ss than 2 per cent of the pool - the amount of leverage can be quite high, = because the first-loss or junior portion of the tranche is typically quite = small. Consequently, even investors in senior tranches of the transaction a= re vulnerable to sudden defaults.=20 Money managers are more wary than insurers of CDOs, citing the transactions= ' opaque nature. Many are private, and transaction managers often do not re= veal immediately the names of companies involved, making it difficult to as= sess credit risk, fund managers say.=20 With CDO transactions so difficult to assess, the ratings agencies have ack= nowledged that quantification of exposure to Enron in the derivatives marke= t remains "incomplete".=20 © Copyright Financial Times Group.=20 http://www.ft.com. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 OBSERVER - Good news for Kinko's - AVENUE OF THE AMERICAS. 01/07/2002 Financial Times © 2002 Financial Times Limited . All Rights Reserved Last week, the Senate's government affairs committee became the fourth cong= ressional panel to pile on Enron, announcing a two-pronged inquiry into the= bankrupt energy giant that will look into both malfeasance within the comp= any as well as possible lapses by federal regulators.=20 But according to staffers from other committees that are already investigat= ing the collapse, the folks at government affairs, which quickly issued sub= poenas for documents from Enron and its auditor Arthur Andersen, may have b= it off more than they can chew. The reason: it seems getting documents from Enron is proving more costly th= an originally expected. Because the company is currently in bankruptcy prot= ection, company lawyers have insisted it cannot pay copying fees for the pa= pers the committees want, leaving congressional staffers to fork out the ca= sh for duplication.=20 And the fees are beginning to rack up. While there are no estimates as to c= osts incurred thus far, the House energy and commerce committee - expected = to take the lead in the probes because of its wide-ranging jurisdiction ove= r both energy policy and accounting standards - expects to have 2m document= s by the end of the month.=20 Senator Carl Levin, who chairs the government affairs subcommittee on inves= tigations, said he had not requested any additional funding for his probe, = adding that he believed some reallocation of resources, including using con= gressional fellows already detailed to the committee, would cover any addit= ional expenses.=20 But other Capitol Hill denizens are not so sanguine. Said one staffer from = a rival committee: "The fact that there are tens of thousands of these docu= ments - that may take some of the steam out of them."=20 © Copyright Financial Times Ltd. All rights reserved.=20 http://www.ft.com. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Wiser Oil Seeks Separate Enron Power Creditor Panel 01/07/2002 Dow Jones Corporate Filings Alert (Copyright © 2002, Dow Jones & Company, Inc.) DJ CFA SOURCE:Bankruptcy=20 ISSUER: ENRON CORP.=20 SYMBOL: ENE=20 (This story was originally published Friday evening.)=20 By Carol McCleary=20 Of DOW JONES NEWSWIRES=20 WASHINGTON (Dow Jones) - A movement is underway to have a separate=20 committee formed in Enron Corp.'s (ENE) bankruptcy case to represent power= =20 generators and traders, who contend that the current creditors' committee= =20 can't adequately protect their interests.=20 Wiser Oil Co. (WZR) is among a group of Enron creditors who are concerned= =20 with the way the U.S. Trustee comprised the creditors' committee - appointi= ng=20 debtor-in-possession lenders to the panel.=20 The committee should be acting as the watchdog in the case, Wiser's=20 counsel Van Oliver said. He questioned how the lenders can exercise their= =20 fiduciary duties as committee members.=20 A number of parties holding claims arising out of hedging contracts have=20 concerns with the way the committee has been set up to represent the=20 interests of Enron and not its subsidiaries, particularly Enron North=20 America, Oliver told Dow Jones Newswires.=20 There is also concern with the way the debtor's counsel has been=20 "mashing" all of the assets of Enron and its subsidiary debtors into one=20 basket, Oliver said.=20 The company hasn't yet filed its financial schedules - the U.S.=20 Bankruptcy Code gives it four months from the Chapter 11 petition date to d= o=20 so.=20 Noting that Enron and its subsidiaries prepare consolidated balance=20 sheets and income statements, Oliver said creditors don't know what the=20 subsidiaries themselves have in terms of assets and liabilities.=20 The cash management system in place isn't protective of the subsidiaries'= =20 claims, according to Oliver.=20 Mirant Corp. (MIR) and Williams Cos. (WMB) are also involved in the=20 effort to have a separate committee appointed, people familiar with the=20 matter said. Oliver declined to identify those involved with Wiser, but sai= d=20 that the parties together hold claims of at least $100 million and possibly= =20 more than $500 million.=20 A motion is expected to be filed within the next couple of weeks asking=20 the U.S. Bankruptcy Court in Manhattan to order the trustee to appoint the= =20 separate committee or, alternatively, appoint a subcommittee to represent t= he=20 power generators/traders.=20 As reported by Dow Jones Newswires, a hearing on the company's DIP=20 financing agreement with J.P. Morgan Chase & Co. (JPM) and Citigroup (C) ha= s=20 been postponed to Jan. 30. A $1.5 billion DIP loan was initially planned,= =20 but, sources said the lenders are reworking the facility based on Enron's= =20 better-than-anticipated cash position, as well as lingering apathy among=20 bankers recruited to take part in the loan.=20 A change of venue request by several creditors who are seeking to move=20 the bankruptcy case to Houston from New York remains set for hearing before= =20 Judge Arthur J. Gonzalez on Monday. The creditors are seeking to move the= =20 bankruptcy case to Houston from New York.=20 -Carol McCleary; Dow Jones Corporate Filings Alert; 202-628-8916;=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Business; Business Desk Preview / WEEK OF JAN. 7-12 Enron Creditors Want Case Moved to Houston Associated Press 01/07/2002 Los Angeles Times Home Edition C-2 Copyright 2002 / The Times Mirror Company A group of Enron Corp. creditors will try to persuade a New York bankruptcy= judge today to move the case to a court in Houston, where the energy compa= ny is based.=20 Large creditors, such as energy traders Dynegy Inc. and El Paso Corp., and = smaller ones, such as the Southern Ute Indian Tribe of Colorado, believe it= would be more convenient and economical to hear the case near the location= of many of Enron creditors and assets. Dynegy and El Paso are based in Hou= ston. In a motion filed by Dynegy and other creditors, lawyers also say there is = "an emotional interest to be served" by moving the case to Houston, where t= housands of Enron employees were laid off and many more witnessed the rapid= evaporation of their retirement plans when the company's stock plummeted.= =20 Analysts say these creditors might also be hoping for a potentially more fa= vorable hearing in Houston, where the economy has suffered as a result of E= nron's demise.=20 Lawyers for Enron, and a handful of creditors opposed to relocating the pro= ceedings, are expected to argue that it would be less expensive and more ac= commodating if the case were administered in New York, home to the armies o= f lawyers and bankers working on both sides.=20 Howard B. Comet, an attorney for Weil, Gotshal & Manges in New York, said i= t also would be easier for business partners and potential witnesses involv= ed in Enron's worldwide operations to participate if the proceedings took p= lace in New York.=20 "The focus of the financial restructuring is here," Comet said.=20 Citigroup Inc. of New York, Barclays Bank of London and Dresdner Bank of Fr= ankfurt are among the creditors opposed to changing venues.=20 Under the federal rules of bankruptcy procedure, a case may be transferred = from one district court to another "in the interest of justice or for the c= onvenience of the parties."=20 The basic criteria considered by judges ruling on previous change-of-venue = motions have been the proximity of creditors, debtors and witnesses; the lo= cation of assets; and the cost.=20 Experts say few cases of this size have been moved but Judge Arthur J. Gonz= alez could be swayed by the fact that so many of Enron's energy-trading par= tners are in and around Houston.=20 Enron collapsed late last year when revelations of questionable accounting = practices and mounting debt caused investors and traders to lose confidence= in the company. The company lost $60 billion in market value over the last= year.=20 Enron filed for protection from creditors under Chapter 11 of federal bankr= uptcy law Dec. 2 in the U.S. Bankruptcy Court for the Southern District of = New York. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Dynegy Gets Info From Enron Related To Venue Motion By Kathy Chu 01/07/2002 Dow Jones News Service (Copyright © 2002, Dow Jones & Company, Inc.) Of DOW JONES NEWSWIRES=20 (This report was originally published late Friday.) NEW YORK (Dow Jones)--In another concession to its former merger partner, E= nron Corp. (ENE) agreed late Friday to provide Dynegy Inc. (DYN) with certa= in information about the role that some Enron executives will play in the c= ompany's financial restructuring.=20 Details are still scarce, but essentially, this means that Dynegy will no l= onger need to depose Enron's Chief Financial Officer, Jeffrey McMahon, in a= n effort to obtain information that may be relevant to Dynegy's motion to t= ransfer the distressed company's bankruptcy case to Houston, lawyers for bo= th companies said.=20 Judge Arthur Gonzalez, of the Bankruptcy Court of the Southern District of = New York, is set to hear this and other motions to transfer the case Monday= .=20 It's the second time in the past day that Dynegy has gotten the upper hand = over Enron, and follows an agreement by the two companies earlier Friday to= hand over control of a valuable pipeline to Dynegy.=20 Last month, Dynegy served McMahon and three other Enron executives with sub= poenas for depositions, but later said it only needed to question McMahon. = At the time, Dynegy said that a deposition was necessary to determine, amon= g other things, why the bankrupt company filed for court protection in New = York instead of Houston.=20 Most of Enron's assets and creditors are in Texas, making it more convenien= t and economical for the case to be heard there, according to Dynegy.=20 Enron, following a Wednesday court hearing, has provided Dynegy with enough= information that the latter sees no immediate need for a deposition.=20 This includes details about which of Enron's executives are involved in the= company's financial restructuring, according to Howard Comet, of Weil, Got= shal & Manges - which is representing Enron - and about which executives ha= ve detailed knowledge of the two companies' adversarial proceedings.=20 Dynegy had also requested information about the Enron's estimated financial= reorganization budget, which isn't yet available, according to Comet.=20 But people familiar with the matter have told Dow Jones Newswires that Enro= n presented financial information, including its budget for reorganization,= to debtor-in-possession lenders J.P. Morgan Chase & Co. (JPM) and Citigrou= p (C) recently.=20 In recent weeks, Dynegy, Enron's 401(k) plan holders, El Paso and other cre= ditors have all filed motions asking that the largest bankruptcy case in co= rporate history be transferred to the Bankruptcy Court of the Southern Dist= rict of Texas.=20 About a dozen financial institutions, including J.P. Morgan Chase and Citig= roup, objected to the move.=20 Moving the cases "would frustrate, rather than further, the interest of jus= tice" because Enron's list of 20 largest unsecured creditors is dominated b= y institutions located in, or controlled from, New York, J.P. Morgan said i= n a court filing.=20 -Kathy Chu; Dow Jones Newswires; 201-938-5392; kathy.chu@dowjones.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Foreign News Bush's rst big scandal rises from the ashes of Enron Rupert Cornwell in Washington 01/06/2002 The Independent - London FOREIGN 14 (Copyright 2002 Independent Newspapers (UK) Limited) It may not yet quite be the "cancer on the presidency" of which John Dean w= arned Richard Nixon in the early days of Watergate. But the collapse of the= energy conglomerate Enron is suddenly shaping up as big, big trouble for G= eorge Bush.=20 All the ingredients of a classic Washington scandal are there: the biggest = corporate failure in history, a chief executive on such good terms with Geo= rge Bush that the President refers to him as "Kenny Boy" and a history of m= assive contributions by the Houston-based Enron to the White House campaign= s of Bush the father and Bush the son. The final element fell into place last week with the announcement of a full= -scale Senate investigation, complete with subpoenas for top Enron executiv= es including Kenneth Lay (aka "Kenny Boy"), representatives of the Arthur A= ndersen accounting firm which singularly failed to spot the impending disas= ter, and perhaps senior figures in the Bush administration as well.=20 Even the cast of characters is comfortingly familiar. Enron's lead attorney= , for instance, is Robert Bennett, the $500-an-hour DC superlawyer who feat= ured in Washington's most recent presidential scandal when he represented B= ill Clinton in the Paula Jones sexual harassment suit. That led directly to= the Monica Lewinsky saga.=20 By any yardstick, Enron is a massive financial scandal, a tale of concealed= debt and shell companies, incompetent auditing and scanty regulatory overs= ight - not to mention the sudden impoverishment of thousands of employees o= bliged to hold their pension savings in now worthless Enron shares, even as= senior executives cashed in stock and stock options for up to $1bn (pounds= 700m) during 2000 and 2001.=20 Until now, however, Enron has been the dog which failed to bark - or, more = exactly, was ignored as the media concentrated on Afghanistan and barely da= red mention such goings-on as the presidential approval ratings hovered aro= und the 90 per cent mark. Enron unravelled in November, but not until 28 De= cember was Mr Bush first asked about the debacle. All that is about to chan= ge as the news focus starts to shift from the anti-terror campaign to domes= tic politics. Not only is this a mid-term election year in which the Democr= ats need just half-a-dozen seats to recapture the House of Representatives,= but thoughts are already turning to the 2004 White House race. In all thes= e calculations, Enron could prove a factor.=20 Already, at least three Congressional committees have been sniffing around = the affair. But the main investigation will be conducted by the Senate's go= vernmental affairs committee, headed by the Democrat Joe Lieberman of Conne= cticut. Mr Lieberman, it will not be forgotten, was Al Gore's vice- preside= ntial running mate last time and is is widely believed to have ambitions fo= r the top job in 2004.=20 Thus far, Mr Lieberman has followed the Washington scandal script to a T. E= choing investigators of Watergate, Iran-Contra and Whitewater before him, h= e promises solemnly that his probe will be even-handed, "a search for the t= ruth, not a witchhunt". But, he warns, "we're going to go wherever the sear= ch takes us". If so, it could be a most interesting journey.=20 Enron has been a fountain of money for politicians of every hue. Since 1990= , according to the Center for Responsive Politics, which monitors such dona= tions, it has made campaign contributions of $5.8m (pounds 4m), three- quar= ters of it to Republicans. The biggest single beneficiaries, unsurprisingly= , have been the two Texas senators, Kay Bailey Hutchinson and Phil Gramm, w= hose wife Wendy sits on the Enron board.=20 Like most big corporate donors, it has hedged its bets. On Capitol Hill, 71= of the 100 current senators and nearly half the 435 congressmen have recei= ved contributions. The investment paid off with a vengeance, when Enron sec= ured exemption for its energy derivatives business under a 2000 Act regulat= ing commodity futures trading. But the Bush family has been a special objec= t of its attentions. Mr Lay was listed by the Bush-Cheney campaign as one o= f the "Pioneers" who raised at least $100,000 (pounds 70,000) for the elect= ion, while Enron gave $100,000 to the inauguration gala, a contribution mat= ched by "Kenny Boy" and his wife.=20 Potentially most damaging is its possible backstage role in the formulation= of Mr Bush's energy policy. At least four Enron consultants and executives= have done work for the administration. A champion of the deregulation favo= ured by the White House, Mr Lay was a frequent informal adviser to the pane= l under the Vice-President, Dick Cheney, which drew up a national energy st= rategy.=20 "We've got to ask whether the advice tendered was self-serving," Mr Lieberm= an says. Or, to put it more bluntly, were the Texan oilman in the White Hou= se and the Texan energy baron in Houston running a mutual benefit society? = These questions can no longer escape an answer. Caption: Enron unravels: ex-employee Janice Farmer - who has lost most of h= er savings - with her daughter Julie at a Senate subcommittee hearing; `Ken= ny Boy' Lay, chief executive (top); and Senator Joe Lieberman DENNIS COOK/A= P=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 First Watch Out For... Lee Clifford 01/07/2002 Fortune Magazine Time Inc. 21 (Copyright 2002) A deadly disease besieged executives across the country this year: Call it = Sudden Reputation Death Syndrome. Early symptoms seemed innocuous enough--g= rumbling board members, mild cases of foot-in- mouth disease, stock falloff= s. But once the disease took hold, no decision the afflicted executive made= was the right one, and soon onetime People to Watch had become People to W= atch Out For.=20 Houston became a regular hot zone after Jeff Skilling, Ken Lay, and the res= t of the Enron gang managed to turn a thriving New Age energy business into= a pile of rubble between Labor Day and Thanksgiving. Blustery Linda Wachner and Jacques Nasser fought long battles but fell vict= im to the illness when Wachner plunged Warnaco into bankruptcy and Nasser's= missteps alienated the Ford family and caused his company's stock to lose = another 30% on the year. Shailesh Mehta, who pursued an aggressive growth s= trategy at credit card provider Providian, took sick while watching the sto= ck drop 94% during 2001 amid a wave of card defaults. All three lost their = jobs.=20 There's another possible case germinating at Hewlett-Packard-- that of Carl= y Fiorina. Whether the Compaq merger will push her into full arrest remains= to be seen, but one thing's for sure: This drama is more action-packed tha= n an episode of ER.=20 --Lee Clifford COLOR PHOTO: WIN MCNAMEE--REUTERS/TIMEPIX Jacques Nasser=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron Canada Corp To Assume New Form: CEO 01/07/2002 Dow Jones Energy Service (Copyright © 2002, Dow Jones & Company, Inc.) (This article was originally published Friday)=20 CALGARY -(Dow Jones)- The head of former marketing giant Enron Corp.'s (ENE= ) Canadian unit is a strong believer in reincarnation, at least if it's cor= porate. Enron Canada Corp.'s profitability and pool of talent will keep it from sin= king under the ashes of its parent company's fiery demise, President and Ch= ief Executive Robson Milnthorp said Friday to Dow Jones Newswires.=20 "There are a number of shapes that this can be resurrected under," Milnthor= p said. "That might entail being auctioned off through the parent in Housto= n, or replacing the Enron balance sheet with someone else's.=20 "There's no reason to panic or jump at the first alternative," he said.=20 The shaved-bald executive believes a new entity will appear on the Canada p= ower market by midyear, under a different name but with many of Enron Canad= a's strengths.=20 Enron Canada, which cornered approximately 40% of power trades in the count= ry last year, tried unsuccessfully to distance itself from Enron Corp. when= the global power trader lost investor status in November because of a numb= er of dubious business deals.=20 The Canadian unit argued it was financially stable, compared to its parent = and credit guarantor, but was unable to stop the flood of contract terminat= ions that followed Enron's filing for bankruptcy protection in early Decemb= er.=20 Milnthorp lost a court battle last month to keep counterparties from jumpin= g ship, and has been liquidating company accounts since then to keep from b= ecoming insolvent.=20 The biggest move was the C$215 million sale of its power contract for the o= utput of a 706-megawatt generation station in northcentral Alberta.=20 Enron Canada lost $80 million on its original purchase price in the deal wi= th TransCanada PipeLines Ltd. (T.TRP) and AltaGas Services Inc. that was co= mpleted last Friday when a U.S. bankruptcy judge approved the sale.=20 The sale enabled Enron Canada to meet December settlements from November co= ntracts, albeit three days late, on Dec. 28.=20 Financial settlements due Jan. 5 will be met Friday, Jan. 4, Milnthorp said= .=20 Enron's fall from credit favor across the world has changed how natural gas= producers look on contracts, said a Calgary analyst.=20 "Credit is now No. 1 with producers," Ron Vogal, with Streamline Energy Gro= up Ltd. said. "We're telling all the little guys to align themselves with a= number of marketers instead of just one, and some are looking at going bac= k to dealing directly with the end-user, rather than through a marketer."= =20 Most Canadian producers have liquidated their contracts with Enron Canada a= nd are in the process of replacing the natural gas. Offset agreements, wher= e amounts due are balanced against amounts owing for a net result, are taki= ng place between producers and Enron Canada, Vogal said.=20 A number of companies still owe the marketing firm. One company, IMC Canada= Ltd., recently lost a court request to be released from its C$2.3 million = debt to Enron Canada.=20 Milnthorp anticipates more litigation to come through Canadian courtrooms a= s counterparties and Enron Canada sort out contract terminations and calcul= ate damages.=20 -By Dina O'Meara, Dow Jones Newswires; 403-531-2912; dina.omeara@dowjones.c= om Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 A Houston feels pain of Enron's collapse ; Insecurity is tempered by cockines= s Nathan Levy SPECIAL TO THE WASHINGTON TIMES 01/06/2002 The Washington Times 2 A2 (Copyright 2002) HOUSTON - As the lunch-hour crowd shuffles by, Dave Glessner, a chemical en= gineer at Enron Corp., stands alone across the street from the company's gl= itzy headquarters. A box of his personal work belongings rests at his feet.= =20 He has bittersweet feelings about the energy trader that recently filed the= largest bankruptcy petition in U.S. history.
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