Monday, December 03, 2001
Enron makes bankruptcy filing
By Matt Moore
The Associated Press
NEW YORK — Beleaguered energy company Enron Corp. has filed for Chapter 11 bankruptcy protection, the company said Sunday.
Enron also filed a lawsuit against would-be suitor Dynegy Inc. for wrongful termination of its $8.4 billion proposed merger. Both actions were filed in U.S. Bankruptcy Court for the Southern District of New York.
Houston-based Enron is seeking bankruptcy protection for itself and 14 subsidiaries. The company said it is in “active discussions” with several financial institutions to secure credit for the continued operation of Enron North America Corp., as well as additional funding to keep the rest of the company operating.
“From an operational standpoint, our energy businesses — including our pipelines and utilities — are conducting normal operations and will continue to do so,” said Enron chairman and chief executive Kenneth Lay.
Enron said it plans to launch “substantial work force reductions,” mainly in Houston. It didn't say how many workers would be affected. On Friday, Enron laid off 1,100 workers in Great Britain. The company employs more than 20,000 workers worldwide.
Mr. Lay said Sunday's filings will help the company regain the confidence it has lost.
In a statement Sunday, Enron also said it was suing Dynegy for wrongful termination of the merger and seeking at least $10 billion in damages.
Dynegy spokesman John Sousa said his company had not had an opportunity to review the litigation but was confident it was within its legal rights to exercise the provision.
On Friday, shares of Enron fell to 26 cents in heavy trading on the New York Stock Exchange. Last December, shares were trading near $85 apiece.
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