Bankrupt

Memorial services for the enigma that was Kenneth Lay, 64, founder of the bankrupt Enron Corp., were to be held Sunday in Aspen, CO, where he died early last Wednesday, and in Houston this coming Wednesday. Lay, regarded by some as a good friend, devoted to his family and a leading supporter of the Houston community, was seen by others as among the worst of the robber barons, enriching himself while leaving some Enron pension and shareholders penniless. Prevailing legal opinion is that his death before he had a chance to appeal his conviction will wipe his slate clean in the eyes of the law. History will determine the rest.

A consultant and attorneys for bankrupt Enron did not withhold information during a 2001 FERC hearing involving refunds to Pacific Northwest power customers, the agency’s chief judge said. As a result, he recommended that the parties not be barred from appearing and practicing before the Federal Energy Regulatory Commission.

FERC last Wednesday ordered a hearing to determine if a consultant and attorneys for bankrupt Enron should be barred from appearing and practicing before the agency for allegedly withholding information during a 2001 proceeding involving refunds to Pacific Northwest power customers.

Bankrupt generator Calpine Corp. last Monday said it expects to record $5.5 billion in non-cash impairment charges for the twelve months ending Dec. 31, 2005. Also, the company expects to record additional noncash valuation allowances of $1.6 billion against deferred tax assets, which will be reflected in the tax provision for 2005.

Despite the break-up of its CalBear energy trading joint venture with bankrupt Calpine Corp., Bear Stearns still plans to be a player in the natural gas and power markets through a new trading operation it is setting up in Houston called Bear Energy LP. The company is currently hiring gas and power traders and support personnel.

Enron Corp. agreed late Monday to a $356.25 million payment to settle litigation against the company regarding its bankrupt retirement plans that were brought by the Department of Labor (DOL) and former and current employees.

Enron recently asked a FERC administrative law judge (ALJ) to give the bankrupt former energy trading giant an additional six months to review thousands of hours of Enron trader tapes as part of a FERC probe into possible manipulation of California’s energy markets in 2000-2001 and Enron’s relationships and practices in the West during that time frame [EL03-180-000].

Bankrupt power company Mirant Corp. informed the U.S. Bankruptcy Court last week in an amended reorganization plan and disclosure statement that its board has authorized the filing of litigation against former parent company Southern Co., seeking about $1.945 billion in damages related to payments made in connection with Mirant’s initial public offering (IPO) and spin-off in 2001.

In the end, the relative stability and autonomy of Portland General Electric (PGE), despite being owned by bankrupt Enron Corp., defeated the proposed $2.35 billion purchase by private investors headed by Texas Pacific Group (TPG), according to background provided by the Oregon Public Utility Commission (PUC) in the wake of its unanimous rejection Thursday of the TPG offer because of its perceived excessive debt and risk.