X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
A New York judge Thursday approved Enron Corp.’s sale of roughly 19,000 electricity contracts for $22.6 million and also approved the designation of an examiner to investigate the legal and other professional fees in the bankruptcy case, which one Texas official predicts could climb to $20 million per month. Judge Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan approved the sole stalking-horse bid by Constellation Power Source Inc. to assume the electricity contracts from Enron Energy Services Inc. in Texas, Maine and Massachusetts. Thirty-four parties had objected to the sale, but those complaints were all resolved prior to the hearing. “We had a lot of objections, primarily from customers, because Constellation insisted as part of the sale that all of its future customers agree to move their contracts to the new owner,” said Enron Energy’s attorney, Irena Goldstein of LeBoeuf, Lamb, Greene & MacRae in New York. “We hope to close the three separate purchase agreements for customers in Texas, Maine and Massachusetts by the end of May.” The agreements include 13,500 Enron Energy customers in Texas, about 6,500 in Massachusetts and 500 in Maine. An unspecified number of Enron Energy contracts, primarily in Texas, will be cancelled because those customers refuse to accept Constellation as their new electricity provider, Goldstein said. Constellation, a unit of Baltimore-based Constellation Energy Group, emerged as the sole bidder after only one other party performed due diligence but didn’t submit a bid. Four parties initially expressed interest, Goldstein said. A breakup fee of $855,000 was put into the agreement to protect Constellation in case a higher bid comes forward. Gonzalez on Thursday also approved the auction of Enron’s gas retail contracts to Occidential Petroleum Corp. for up to $32 million. Only one party objected to that deal, and the complaint was resolved prior to the hearing. Even though Enron has a fee and budgeting panel to examine legal and consulting fees, Gonzalez said an examiner to review them should be appointed. The chairman of the committee is Joseph Patchan, a former U.S. Bankruptcy Court judge. The panel, which was appointed by the U.S. Trustee for New York, Carolyn Schwartz, has four members and will set a procedure for attorneys, auditors and consultants to prepare their fee budgets. Gonzalez said that surpassing these budgets should draw scrutiny by the committee. “I think we won in terms of added scrutiny,” said Jeff Boyd, Texas’ deputy attorney general, who had expressed concerns to Gonzalez about mounting professional fees in the Enron case. Boyd speculated such fees could climb to $20 million per month and said 19 legal and consulting firms had already submitted $28 million in fees since Enron’s Dec. 2 filing for Chapter 11 protection. Copyright (c)2002 TDD, LLC. All rights reserved.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.