BusinessBusiness RecoveryEnron creditors snubbed in reorganisation plan

Enron creditors snubbed in reorganisation plan

Enron creditors are to receive only one fifth of the sums they are owed, according to a reorganisation plan filed on Friday at the US bankruptcy court.

Link: More executives charged over Enron affair

The bankrupt energy giant, which had debts of more than $67bn, said most creditors would receive between 14 cents and 18 cents for each dollar they were owed. The two largest creditors groups, which make up 78% of the total claims, are Enron North America and Enron Corp, the collapsed company’s parent.

A minority of creditors with priority claims will receive full payment but the reimbursement could take up to 6 years. But common shareholders will receive nothing and the banks which lent money to Enron will also be out of pocket.

Enron, whose spectacular collapse also saw the demise of its auditor Andersen, will pay the creditors $5bn in cash which it raised from the sale of its Houston offices, its art collection, a wind turbine business and commodity contracts sold before the company’s bankruptcy filing.

The bankruptcy plan is still subject to creditor approval. But the nine-month bankruptcy is believed to have already cost about £500m in fees, making all sides anxious for a quick resolution of the case.

Related Articles

Carillion CFO blew whistle over 'sloppy accounting' months before collapse

Business Recovery Carillion CFO blew whistle over 'sloppy accounting' months before collapse

3m Alia Shoaib, Reporter
Toys R Us UK and Maplin enter into administration after failing to secure buyers

Business Recovery Toys R Us UK and Maplin enter into administration after failing to secure buyers

3m Alia Shoaib, Reporter
How to avoid a Carillion collapse

Business Recovery How to avoid a Carillion collapse

4m Russell-Cooke
Carillion collapse: The week so far and industry reaction

Business Recovery Carillion collapse: The week so far and industry reaction

4m Emma Smith, Managing Editor
Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

Business Recovery Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

4m Emma Smith, Managing Editor
Carillion: PwC appointed as special managers – what happens now?

Business Recovery Carillion: PwC appointed as special managers – what happens now?

4m Emma Smith, Managing Editor
Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

6m Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

6m Emma Smith, Managing Editor