Enron Corp. announced on Friday that it has reached a reorganization agreement in principal with its creditors, but needs yet another extension until July 11 to complete the deal and file it with the bankruptcy court. It’s unclear whether Judge Arthur J. Gonzalez will grant another extension. He indicated in February before granting a fourth extension to June 30 that his patience with the delays was wearing thin (see Daily GPI, April 24, Feb. 24).

“This very short extension, if granted, will allow us to finalize an agreement we have reached in principle between the official representative of all our creditors and the court-appointed plan facilitator of the Enron North America estate,” said Stephen F. Cooper, Enron acting CEO and chief restructuring officer. “We believe that the extension will ultimately expedite our court proceedings, and we are hopeful that the court will approve our motion. We are very pleased with the prospect that the plan will have the support of both the Creditors’ Committee and the ENA Examiner.”

If the joint motion is granted by the court on June 30, the company said it would file its plan of reorganization and disclosure statement by July 11.

With the bankruptcy court’s approval, Enron Corp. announced last Wednesday that it plans to move forward with a new holding company to protect its interests in Transwestern Pipeline Co., Citrus Corp. and Northern Plains Natural Gas Co. Enron had proposed a separate company for its pipelines in March (see Daily GPI, March 20). If it is able to form a new pipeline company, the newly named CrossCountry Energy Corp.’s shares would be distributed to creditors in connection with its Chapter 11 reorganization plan. CrossCountry’s pipe holdings would include 8.5 Bcf/d of capacity and 9,900 miles of pipeline.

However, as it attempts to move forward, Enron’s lawyers still will be spending a lot of time in court. During the week, the U.S. Department of Labor filed a lawsuit against the company and many of its ex-officers because of pension mismanagement. On Thursday, the Labor Department sued Enron and 21 former company officials, including former Chairman Kenneth L. Lay and CEO Jeffrey K. Skilling, for mismanaging two of Enron’s pension plans. The lawsuit seeks a court order requiring the defendants to restore to the plans all losses with interest, forfeit their right to benefits from the plans and be permanently barred from serving as fiduciaries to any plan governed by the federal Employee Retirement Income Security Act (ERISA). (see Daily GPI, June 27).

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