Nearly 20 of bankrupt Enron Corp.’s creditors have apparently filed motions to delay the scheduled auction of the company’s trading assets this week, but one-time merger partner and creditor Dynegy Corp. will not be one of them, a spokesman said Wednesday. However, even if the auction proceeds as planned, Enron is facing more obstacles on the legal front: 51 subpoenas are expected to be issued Friday by the Senate’s Permanent Subcommittee on Investigations, and in Houston, a judge is considering whether to freeze Enron executives’ assets.

The U.S. Bankruptcy Court for the Southern District of New York has been asked by the creditors to delay approving any offer for Enron’s trading business, once the most profitable unit of the company. The motion to delay was requested to allow the creditors time to look at the assets up for sale. Included in the auction are assets from its EnronOnline operation, which Enron would like to use in a joint venture with a cash-rich company.

Under Enron’s proposal, a 51% joint venture partner would form a new company with Enron to be called New Energy Trading Co., or NETCO. Enron would contribute information technology and back office systems among other things, in exchange for a 49% stake. As of late Monday, UBS AG, Citigroup Inc. and BP had made bids for some of the assets.

Among those opposing the auction, now set for Thursday with a decision on the winning bids as early as Friday, is the Royal Bank of Scotland Group plc, which said, “Absent a disclosure of the intended uses for the proceeds of this sale, the creditors are unable to gauge that the benefits are adequate, appropriate and directed to the proper beneficiaries.” Kansas City, MO-based Aquila also is opposed to the auction because of concerns about how the proceeds would be used. Aquila wants the auction’s proceeds put in escrow until it is determined which units of Enron receive the money.

However, Dynegy does not plan to oppose the auction, said company spokesman Steve Stengel, who also expressed surprise that any company would want to delay it. “Dynegy has not taken any action to delay the sale of Enron’s trading business,” he told NGI. Stengel also confirmed that the scheduled sale of Northern Natural Gas Co. from Enron to Dynegy is still set to close by the end of January.

Still to come is word on who and what documents are being subpoenaed by the Senate’s Permanent Subcommittee on Investigations. The subpoenas will be served on Enron, its accounting firm Andersen and 49 individual officers, employees and members of the board of directors. The subcommittee is one of five congressional panels investigating the fallen giant along with the U.S. Securities and Exchange Commission, the Department of Labor and the Department of Justice.

“The subcommittee is looking into the role of the officers and board members, the role of the auditors, and the role of special-purpose entities,” a subcommittee spokesman told Reuters. These are some of the same types of things being investigated by the House of Representatives Financial Services Committee, the Senate Commerce Committee and the House and Senate Energy committees. The spokesman said the subpoenas would allow Enron and the others “several weeks” to respond.

On yet another legal front, a Houston judge Wednesday ruled she had the authority to freeze $1.1 billion in assets belonging to Enron executives, but said she would postpone making that decision until she has sufficient cause. U.S. District Judge Lee Rosenthal in an order has asked Amalgamated Bank of New York to file a brief in support of a request made in December to freeze the assets of some of Enron’s current and former executives and board members (see Daily GPI, Dec. 10, 2001).

Amalgamated claims it lost more than $10 million in Enron’s collapse, and has sued 29 current and former Enron executives, including Chairman and CEO Kenneth L. Lay, alleging that Enron’s top echelon engaged in a three-year pattern of fraud and deception that led Enron’s share prices to fall. During that period, the lawsuit contends the executives and board members sold Enron stock then worth an estimated $1.1 billion, while they hid the true financial condition of the company. Between October 1998 and November 2001, Lay sold 1.8 million shares worth $101 million.

Included in Amalgamated’s lawsuit are former CEO Jeffrey Skilling and former CFO Andrew Fastow, who managed many of the damaging related-party transactions. Between October 1998 and November 2001, Skilling sold 1.1 million shares worth $66.9 million while Fastow sold 561,423 shares worth an estimated $30.4 million.

The Houston judge also is considering Amalgamated’s request for unusual “expedited discovery” powers to open the personal records of the 29 defendants to reveal the extent of additional liquidations and limited partnerships not currently made public. Amalgamated, which is seeking damages of $25 billion, is represented by San Diego-based Milberg Weiss Bershad Hynes & Lerach LLP.

Rosenthal wants Amalgamated to file a brief in support of its request by Jan. 23 and wants the named Enron defendants to file a response by Feb. 6. Rosenthal said a 1999 U.S. Supreme Court order that Amalgamated cited in its lawsuit did not prevent her from freezing the assets, but she said there were insufficient grounds to immediately issue the order, as Amalgamated requested.

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