thanx I have the internet too

 -----Original Message-----
From: 	Brad Gabrielson <bgabrielson@cdnam.com>@ENRON  
Sent:	Monday, December 03, 2001 11:34 AM
To:	Dorland, Chris
Subject:	Read the Part about "Chief Money Maker"

Congress to Probe Enron Downfall

AP Online via COMTEX
November 30, 2001



Enron Corp. [ENE], already jarred by a spiraling stock price, a collapsed merger and massive debt, will be under the scrutiny of Congress.
Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, on Thursday announced hearings into Enron's accounting practices and into what impact the company's problems might have on electricity and natural gas markets.

"We're very interested in how the company handled its internal books," said Kenneth Johnson, a spokesman for the congressman, adding that the committee's general counsel had been directed to investigate circumstances leading up to the collapse.
Bankruptcy may be the smartest option for Enron Corp. as the once-mighty energy trader tries to extricate itself from a tangled mess of junk credit and massive debt, a bankruptcy expert and professor said.
"I would assume it would lead to a sale of the company, which was coming anyway," said Jay Westbrook, a bankruptcy expert who teaches at the University of Texas School of Law.
"Bankruptcy provides a lot of protections that makes it easier to do, and it buys time to find out what this company's really worth. That was Dynegy's problem - trying to figure out what the company was worth."
Analysts predicted bankruptcy was Enron's only option as the humbled company limped into limited operation Thursday to let skittish traders cut ties with it. The top executive for Dynegy Inc. [DYN], Enron's smaller rival and would-be savior, also detailed how Enron's financial "decay" caused a rescue merger to crumble.
Stunned employees tried to find hope in the fact that Enron - just months ago a towering presence in the energy markets - had yet to make a bankruptcy filing.
EnronOnline, the company's Internet-based trading system, was up and running on a limited basis for traders to finish transactions and offset credit risk with the company. The site, which was the first of its kind, was shut down for several hours Wednesday after Dynegy Inc. called off the merger.
But analysts said that operation, which was Enron's chief money maker, needs cash and credit to survive - both of which are scarce for the trader.
``Everyone should have at least some skepticism that it could ever emerge from Chapter 11,'' A.G. Edwards & Sons analyst Mike Heim said Thursday. ``The energy trading business has probably taken such a hit to its reputation that it would be difficult to retrench and go forward.''
Enron officials did not return repeated calls for comment.
A haggard Chuck Watson, chairman and chief executive of Dynegy Inc., said a steady stream of revelations of weak finances and decline in Enron's core energy trading business left his company no choice but to walk away.
"This was a very difficult, complex, unprecedented decay of a company over many months," he said at a news conference. "That's a shame, because (a merger) could have worked."
Dynegy announced the rescue plan Nov. 9, knowing that Enron posted a $618 million loss in third-quarter earnings and had ousted its chief financial officer for running partnerships that allowed the company to keep half a billion dollars in debt off its books. The Securities and Exchange Commission is investigating.
But that wasn't all.
Nov. 19 Enron filed paperwork with the SEC that restated its earnings back to 1997, eliminating more than $580 million in reported income in that time span. The filing also disclosed that Enron would have to pay a $690 million debt within a week.
Enron got an extension for the debt, but its stock resumed a free-fall that had halted temporarily with the merger announcement. Dynegy started renegotiating Enron's sale price.
After falling 85% Wednesday, shares of Enron were off another 25 cents, or 41 percent, to finish at 36 cents in extremely heavy trading on the New York Stock Exchange. Enron's 52-week high was reached last December, at $84.88.
Watson said surprises in the SEC filing caused irreparable damage, even as Dynegy continued to hammer away at an agreement.
When two agencies cut Enron's credit rating to junk status Wednesday - triggering an obligation to pay debts of $3.9 billion, or nearly twice the cash the company is believed to have - Watson said he had to stop trying to save another company and protect his own.
Watson said Dynegy invoked an escape clause in the merger agreement that allowed it to back out if Enron had serious financial problems, so Dynegy won't have to pay a $350 million breakup fee.
He also said Dynegy will acquire Enron's Northern Natural Gas pipeline - which has 16,500 miles of pipelines from Texas to the Great Lakes - in exchange for the $1.5 billion part-Dynegy owner ChevronTexaco pumped into the ailing trader. "Their pipeline operation is as good as any in the industry," Watson said. "The real question is the wholesale operation, and the viability of that and how fast they can come back into the market."
Enron may challenge that acquisition, but Watson said the tradeoff ensured ChevronTexaco wouldn't be out $1.5 billion.
"That pipeline will be Dynegy's Dec. 19," he said.
Rob Doty, Dynegy's chief financial officer, said Friday that because Dynegy is the pipeline's preferred stockholder, Northern Natural Gas cannot seek bankruptcy protection without Dynegy's approval.
He said the pipeline has been a separate subsidiary of Enron for more than 20 years. Dynegy will assume $950 million of Northern Natural Gas debt, Doty said.