Enron Corp. has obtained $1.5 billion in Chapter 11 financing to keep its energy trading unit and other operations running as it begins to reorganize, the company said late Monday. A bank consortium, led by J.P. Morgan Chase & Co. and Citibank, loaned the bankrupt Houston trader the funds, which will give Enron some capital as it attempts to repay some debts. Enron also got the go-ahead from Bankruptcy Court Monday night that will allow it to continue operations and offer severance packages to the thousands of employees who are losing their jobs.

U.S. Bankruptcy Court Judge Arthur Gonzalez of the Manhattan, NY, court allowed Enron to draw $250 million from the new credit line and scheduled a hearing for Jan. 7 to consider giving it full access to the money. An attorney representing Enron at the hearing in New York said Enron only had $500 million to operate on Monday. Once it has access to the funds, Enron will use $550 million to repay a $550 million debt owned by Transwestern Pipeline Co., according to J.P. Morgan Chase. When Transwestern’s debt is repaid, it likely also will file for bankruptcy. Other units also will file for bankruptcy “in the days ahead,” said Enron attorney Martin Bienenstock, but no details on which units would do so were provided in court.

“With this financing in place, Enron can continue to do business and move forward to implement the first steps of its reorganization,” Kenneth L. Lay, Enron’s chairman and CEO, said in a written statement. Enron and 13 of its units declared bankruptcy on Monday, listing overall total assets as $49.8 billion and debts of $31.2 billion. Enron Gas liquids Inc. also is was expected to file for bankruptcy Tuesday.

One unit that has not filed for bankruptcy, and is at the center of an expected difficult court battle with former merger partner Dynegy Inc., is Northern Natural Gas Pipeline Co. Dynegy was sued by Enron for $10 billion for withdrawing from the merger, and Dynegy on Monday retaliated, filing a counter-suit in a Houston court to gain control of NNG (see Daily GPI, Dec. 4). Dynegy became a preferred shareholder of NNG with an infusion of $1.5 billion as part of the merger deal agreed to by both parties in early November.

In the New York court, Enron’s attorney said that Enron’s trading book had carried a value of $12 billion until mid-October, when the company filed its third quarter earnings. The earnings release, and subsequent disclosures of writedowns and dubious related-party transactions precipitated the incredible fall in Enron’s shares and ultimate bankruptcy (see Daily GPI, Oct. 17, Oct. 24). Tuesday Enron’s stock price moved off its low, gaining 47 cents to close at 87 cents. Dynegy’s stock, which had dropped after its failed merger attempt with Enron, also gained $3.98 to close at $31.15.

Gonzalez also allowed Enron to prepare severance packages for its laid-off workers. About 4,000 were let go from its Houston headquarters on Monday; Enron has about 21,000 employees worldwide with almost two-thirds in the United States alone. Last week, about 1,100 workers in the United Kingdom were laid off. Gonzalez gave permission to begin releasing severance packages, with a minimum of $4,500 to about $15,000. He also allowed Enron to complete its construction of a $40 million office tower in downtown Houston, which is nearly done, and spend another $8 million for Internet access and office expenses.

In other actions, European news reports said British utility Centrica PLC said its subsidary, British Gas Trading Ltd., had agreed with the bankrupt Enron’s administrator, PricewaterhouseCoopers, to acquire the energy customer business and certain assets of Enron Direct Ltd., a subsidiary of Enron Europe, for $137 million in cash.

And U.S. Energy Secretary Spencer Abraham said on Tuesday he may order the Energy Information Administration (EIA) to examine the potential impact on energy markets of Enron’s collapse. Abraham said he did not think Enron’s fall would affect energy deregulation. He also said he thought congressional hearings were the appropriate venue for conducting a formal inquiry of the fall of Enron and the impact on markets. However, an analysis by EIA would be helpful (see related story).

A broad range of Houston charities also were counting the cost of the loss of Enron as one of the largest contributors (see related story).

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