Enron Corp. took another step toward disappearing Wednesday when the company closed the $2 billion sale of its most prized remaining assets and its plan to emerge from one of the most costly and complicated bankruptcies in history became effective.
Enron's sale of its interest in three natural gas pipelines to CCE Holdings LLC, a joint venture of Southern Union Co. and a unit of GE Commercial Finance, was approved in September by U.S. Bankruptcy Judge Arthur Gonzales in New York. CCE Holdings also will assume $430 million in debt.
Still pending is a $1.25 billion sale of Portland General Electric, Enron's Pacific Northwest utility, to a holding company backed by Texas Pacific Group, which also will assume $1.1 billion in debt. Gonzalez approved that sale in July. That deal, announced a year ago, is awaiting approval from Oregon regulators.
If the Portland General sale closes as expected, the last remnant of the one-time energy giant that once claimed billions in revenues and pioneered trading operations beyond energy will be Prisma Energy International Inc. — a smattering of pipeline and power assets in 14 foreign countries, mostly in Latin America.
Once the Portland General sale closes and outstanding claims are resolved, Enron can begin distributing about $12 billion to creditors — 92 percent in cash and 8 percent in Prisma stock. If the Portland General sale falls through, creditors will receive stock in both Prisma and the utility and less cash.
Enron spokeswoman Jennifer Lowney said distributions aren't expected to begin until mid-2005.
Eventually, the Enron name will vanish. But even when Prisma becomes an entity all its own, a form of Enron will remain to handle distributions and litigation, Lowney said.
Creditors will receive in cash and stock about one-fifth of the approximate $63 billion they're owed. Individual shareholders will get nothing.
Enron went bankrupt in December 2001 when revelations of hidden debt, inflated profits and accounting trickery shattered its facade of success. Thousands of workers lost their jobs. The Justice Department's investigation into the collapse has netted 15 guilty pleas, six convictions and one acquittal. Eleven people are awaiting trial — including company founder Kenneth Lay and former CEO Jeffrey Skilling — both of whom have pleaded innocent to charges including fraud and conspiracy.
CrossCountry, Portland General and Prisma were never part of Enron's bankruptcy.
CrossCountry's assets acquired by CCE Holdings are the 2,600-mile Transwestern Pipeline, which moves gas from West Texas, Oklahoma, New Mexico and Colorado to markets in California, Arizona and Texas; and half-ownership with El Paso Corp. of Citrus Corp., a holding company that owns the 5,000-mile Florida Gas Transmission pipeline from southeast Texas to Florida.
CCE on Wednesday sold CrossCountry's less than 2 percent interest in Northern Border Partners, which transports natural gas from Canada to the Midwest, to ONEOK Inc. for $175 million.
Southern Union also named CrossCountry CEO Stan Horton, who ran Enron's pipelines since the company was formed in 1985, as president and chief operating officer of its newly expanded pipeline operations.
Horton, one of Enron's last pre-bankruptcy management holdovers, has not surfaced as a target in any criminal or regulatory investigations. But he is being sued with other former top Enron executives who received generous salaries, bonuses and stock options during the company's halcyon days.