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Perhaps it’s fitting that the murky financial disclosures that marked Enron Corp.’s bankruptcy filing and the era of corporate malfeasance it ushered in now underscores the end of both. Buried on page 16 of a filing that the once-mammoth energy company filed on Thursday with the Securities and Exchange Commission is that Enron’s reorganization plan took effect Wednesday, making its exit from Chapter 11 official. Naturally, much post-exit legal work remains. But given the scale and repercussions of Enron’s bankruptcy, it’s odd that not even a press release trumpeted the company’s emergence. “It reaffirmed the system, because Enron had to play within the rules,” said Chester Salomon, an attorney with Salomon Green & Ostrow PC who was not involved in the case. “Creditors managed to survive the process.” In fact, the filing wasn’t made in connection with Enron’s exit, but with the completion of the $2.45 billion sale of pipeline business CrossCountry Energy LLC to General Electric Co. and Southern Union Co. Incredibly, at a time when some bankruptcies much smaller and less complex have languished for four years or more, Enron managed to exit a couple of weeks shy of its three-year anniversary in Chapter 11 on Dec. 2. Under a reorganization plan that Judge Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan confirmed July 15, Enron creditors will recover about 20 percent on their claims. Overall, 92 percent of that recovery will be in the form of cash, while the remaining 8 percent will be stock in Enron’s remaining asset, Prisma Energy International Inc., which holds assets in 14 countries. Despite Gonzalez’s confirmation over the summer, Enron’s emergence wasn’t immediate because the company had a number of issues to contend with, including whittling the total claims filed against it to about $63 billion. Claims had been as high as $1 trillion just before the bankruptcy proceedings started. Loose ends still exist. Texas Pacific Group, for example, is still trying to close its $2.35 billion purchase of Portland General Electric Co. from Enron. The Oregon Public Utility Commission has yet to approve the deal. Should the sale continue to falter, Enron’s creditors could wind up getting stock in the utility, a source familiar with the situation said. Litigation trusts set up by the Enron estate, meanwhile, will continue to pursue claims against the company and its former officers and directors, many of whom have either faced criminal charges or still do. Enron in many ways came to epitomize the economic bubble as much as highflying Internet stocks did, since in the wake of the company’s accounting scandals, others at Adelphia Communications Inc., Tyco International Ltd. and WorldCom Inc. (now MCI Inc.) were unearthed, too. Throughout the bankruptcy, examiners were appointed to explore Enron books. The result started to become routine — special-purpose vehicles and other off-balance-sheet methods to hide debt and boost sales and earnings. Once a staid but growing pipeline company, Enron expanded into energy trading and myriad other businesses in an effort to keep up with Wall Street expectations. It used controversial mark-to-market accounting methods that abetted its ability to show expanding revenue. The company installed Stephen Cooper from crisis management firm Kroll Zolfo Cooper LLC to be its interim CEO, hired Weil, Gotshal & Manges as debtor counsel and Blackstone Group LP as its financial adviser and went about the long process of trying to figure out whether to rebuild or to liquidate. The process often got ugly. Thousands of Enron workers lost their retirement savings when the company’s stock became worthless. And the case became a full employment act for the bankruptcy bar. According to www.Bankruptcy Insider.com, 167 lawyers at 49 law firms were involved in the case as of Nov. 17. Finally, Enron’s future began to clearly shape on July 11, 2003, when the company filed a reorganization plan giving creditors stock in CrossCountry, Portland General Electric and finally, Prisma. The rest, as they say, is history. Copyright �2004 TDD, LLC. All rights reserved.

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