New York-based J.P. Morgan Chase & Co., one of Enron Corp.’s biggest creditors and rumored to be in the running to make a bid for the company, on Tuesday sued its former business partner for more than $2.1 billion. The lawsuit was filed in the U.S. Bankruptcy Court in New York on behalf of itself and related parties, claiming it has rights to some of Enron’s assets, including accounts receivable, commercial paper, cash and other property not protected in the Chapter 11 reorganization.

According to the lawsuit, J.P. Morgan claims that Enron holds certain assets only as a servicer for the alleged owners, under two accounts receivables transactions. The lawsuit claims the assets are not Enron’s property because they were sold before Enron filed for bankruptcy protection on Dec. 2. The lawsuit further claims that J.P. Morgan was an agent for two credit facilities for Enron to help fund transactions between Enron and Sequoia Financial Assets, a special purpose, bankruptcy-related entity. J.P. Morgan claims that Sequoia bought the Enron receivables and then reinvested the money collected in short-term paper that was issued by Enron and its Enron North America unit.

The lawsuit Tuesday was only one of the mounting problems facing Enron this week. Faced with layoffs of key traders in its natural gas and power unit, a growing list of lawsuits, more bankruptcies and a lack of cash, Enron announced Tuesday that previously declared dividends would not be paid on its common stock, the Cumulative Second Preferred Convertible Stock, the Enron Capital LLC 8% Cumulative Guaranteed Monthly Income Preferred Shares, and the Enron Capital Resources LP 9% Cumulative Preferred Securities, Series A. The company also is facing more criticism for doling out retention bonuses to key employees, as thousands of the newly unemployed try to find jobs.

In a written statement, Enron said that “until further notice,” no dividends will be declared on its common and preferred stock, as well as other securities listed on the New York Stock Exchange, which include Enron Capital Trust I 8.30% Trust Originated Preferred Securities or the Enron Capital Trust II 8.125% Trust Originated Preferred Securities. The company also will make no quarterly interest payments on its 7% Exchangeable Notes.

The dividend news followed revelations over the weekend that Enron’s wholesale trading and marketing unit was being streamlined even more, this time affecting gas and power traders. About 200 more employees were laid off from the Houston headquarters on Friday, bringing the total number of workers lost there close to 5,000 — more than 4,300 were let go following Enron’s filing for Chapter 11 protection Dec. 2. More cuts are expected.

The layoffs, which apparently are taking place on a daily basis, come as Enron takes the heat for paying out millions in retention bonuses to keep key employees through its reorganization. Although a common practice, some have criticized the amount of the bonuses revealed as the company filed for bankruptcy. Leading the bonus list were Enron Americas CEO John Lavorato, who apparently received $5 million, while COO Louise Kitchens was given $2 million. Kitchens is credited with starting up the once unstoppable EnronOnline trading platform. Enron’s retention plan was filed as part of its bankruptcy proceeding. Employees accepting bonuses are required to remain with the bankrupt company for at least 90 days or they must repay the bonus and a penalty.

Before Enron filed for bankruptcy, it also paid out almost $55 million to about 75 employees to encourage them to remain as the company prepared for its merger offer from Dynegy Corp., which was withdrawn in late November.

In other news, a decision is expected late this week or early next week by U.S. District Judge Lee Rosenthal in Houston regarding a request to freeze the assets of current and some former Enron executives and directors who sold millions of shares before the company declared bankruptcy. Amalgamated Bank, which claims to have lost more than $10 million from Enron’s fall, sued 29 current and former executives and board members last week, including Chairman Kenneth Lay and former CEO Jeffrey Skilling.

The lawsuit, one of about 60 facing Enron, was filed in a Houston federal court and alleges that the defendants engaged in a three-year pattern of fraud and deception that caused Enron’s share price to plummet. The lawsuit, which seeks $25 billion in damages, claims that the defendants sold $1.1 billion in stock while hiding the company’s true financial condition. Amalgamated’s lawsuit is different from the countless others because it names individual executives and board members as defendants, not the company.

Bankruptcies also continue. Enron Japan Corp., a wholly owned subsidiary of Enron, said Tuesday that it and three Japanese affiliates, E Power Co., Enron Japan Marketing Corp. and Enron Japan Funding Corp., have filed for bankruptcy. Enron Japan Corp. was established in April 2000 to do business in the country’s power industry, estimated to be $120 billion annually. The plans included construction of a power plant in northern Japan and three others in southern Japan.

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