Subject: Bids Open for Enron Trading Unit


Thursday December 20 5:39 AM ET  Bids Open for Enron Trading Unit By KRISTEN HAYS, Associated Press Writer  HOUSTON (AP) - A U.S. bankruptcy judge has set in motion the bidding process for embattled Enron Corp.'s once-dominant trading operation, which some Wall Streets insiders say could fetch up to $1 billion.
Enron said at a hearing Wednesday before Judge Arthur Gonzalez in New York that it would allow parties to bid for all or part of the wholesale trading unit.
Enron lawyer Martin J. Bienenstock said none of the 14 potential bidders to come forward so far have expressed interest in bidding for Enron's book of contracts, which Enron values at $5 billion to $7 billion.
Bids are due Jan. 7; an auction will be held Jan. 10.
Bienenstock said bidders are wary of the potential liabilities in the contracts and that the short time frame does not allow for a full review of the books.
The company, however, wants to complete the auction as soon as possible to avoid losing traders to other financial companies.
In Enron's home base of Houston Wednesday, a federal judge ruled that a state court should decide whether Enron must give rival Dynegy Inc. a key natural gas pipeline.
Dynegy claims Enron signed away its right to Northern Natural Gas Co. pipeline, a prized 16,500-mile system running between Texas and the Midwest, in exchange for $1.5 billion invested in Enron before a proposed merger of the two competitors collapsed in late November.
Enron claims its smaller rival illegally terminated the $8.4 billion deal and therefore has no right to the pipeline.
Enron and had argued that Dynegy's claim should be part of Enron's massive bankruptcy case filed in federal court in New York.
U.S. District Judge Melinda Harmon ruled that Dynegy's suit should be heard in state court because the company's claim was not a core element of the bankruptcy.
Harmon noted that Dynegy could have sued Enron if the former energy giant didn't seek Chapter 11 protection.
``It's what we predicted,'' said David Burns, a lawyer representing Dynegy in the lawsuit.
``If we don't have Northern Natural Gas turned over to us promptly, we will ask the court to provide an accelerated trial date on this.''
Enron spokeswoman Karen Denne declined comment on the decision.
Dynegy sued Enron in Texas state court in Houston the day after Enron filed one of the largest Chapter 11 bankruptcies in U.S. history Dec. 2 and sued Dynegy for $10 billion for breach of contract in New York.
Dynegy and other creditors also have asked that the bankruptcy case be moved to Houston, where Enron, Dynegy and many of Enron's 800 or so creditors are based.
Gonzalez will consider those requests Jan. 7.
Also Wednesday, nearly 40 of some 4,500 Enron employees laid off after the company filed for bankruptcy gathered outside Enron headquarters here to discuss the company's severance policy and sign a complaint to Enron on the lack of information.
Some carried signs that displayed the word ``Moron'' under Enron's logo and said ``What were they thinking?''
Others wore T-shirts that said ``The Execs Who Stole Christmas.''
Gonzalez on Dec. 4 $1.5 billion in short-term financing to keep the company afloat and fund $4,500 severance payments.
Former workers received those checks last week, but revelations that nearly 600 employees deemed critical to Enron's survival received more than $100 million in retention payments upset those entitled to more money under Enron's severance policy, they said.
The company's severance policy says eligible workers are entitled to a week's pay for each full or partial year of employment and another week's pay for each $10,000 they earned in salary, up to a maximum of 26 weeks.
``We would like the company to honor its commitment,'' said Pete Chase, 31, who worked for Enron Energy Services for 18 months.
Denne said the company cannot approve any severance payments above $4,500 for each employee without Gonzalez' approval.
Employees can file claims with the judge for more severance pay.
Instructions on how to do so are available on Enron's Web site (www.enron.com).
``The next step for Enron is for its creditors to assess its financial condition and assets,'' Denne said.
``Every employee is absolutely free to file a claim.''
Enron, formerly No.
7 on the Fortune 500 with stock trading near $90 a year ago, plummeted into bankruptcy after revelations of hidden debt and overstated earnings in October siphoned investor confidence and prompted traders to flee from what was once the world's largest buyer and seller of natural gas.
Dynegy abandoned a plan to buy Enron for $8.4 billion when it continued to reveal serious financial problems and Enron's credit was downgraded to junk.
Dynegy shares rose $3.08 to close at $23.98 on the New York Stock Exchange.
Enron shares were down 6 cents to 44 cents, also on the NYSE.