Enron announced that it has reached an agreement to settle civil claims related to natural gas and electricity from 1997-2003, which include claims filed during proceedings of the Federal Energy Regulatory Commission (FERC).
Among the parties included in the settlement agreement with Enron are Pacific Gas & Electric Company, Southern California Edison Company, San Diego Gas & Electric Company, the People of the State of California, the California Department of Water Resources, the California Electricity Oversight Board, and the Attorneys General of the States of Oregon and Washington.
Others may come forward to join into the settlement as well, but so far it is just the parties mentioned above. The settlement is for $1.52-billion, though the company faces over $63 billion from all claims.
Enron is currently under Chapter 11 bankruptcy protection, and only has about $12 billion in total assets. According to a press release issued by Enron,
In consideration of their dismissal and release of claims against Enron, the parties settling with Enron will receive a shared allowed unsecured bankruptcy claim of $875 million against Enron Power Marketing, Inc. (EPMI), an Enron subsidiary, and will receive distributions on such claim pursuant to Enron’s confirmed Chapter 11 Plan of Reorganization.
The settling parties also will receive an assignment from Enron of up to $47.3 million in receivables and cash collateral owing to Enron. The settling parties that are governmental units will also receive a civil penalty claim against EPMI for $600 million. Enron has not admitted to any wrongdoing with respect to any matter covered in this settlement.
“This settlement represents the latest in a series of significant issues that have been resolved in Enron’s bankruptcy proceedings,” said Stephen Cooper, Enron’s interim CEO and chief restructuring officer. “Settlements such as this one allow us to remove claims against the estate so that we can accelerate distributions to all other creditors.”
The settlement still must be approved by FERC, as well as the California Public Utilities Commission, and the Bankruptcy Court for the Southern District of New York.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
