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CNN Live At Daybreak

Enron's Creditors Demanding to be Paid

Aired January 31, 2002 - 06:19   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Enron's new interim chief has told employees he believes the crippled company can emerge from bankruptcy, but it will be a much smaller company. In the meantime, the company is selling off assets and creditors are flexing their muscle demanding to be paid.

CNN's Allan Chernoff reports.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice over): Creditors met with Enron executives in Houston this afternoon, demanding to know what's happening to the money from assets Enron is unloading? The creditors are trying to insure the cash is set aside for them, not spent.

DAVID BENNETT, ATTORNEY FOR ENRON CREDITORS: The overall concern is how much money is being collected by Enron and where's the money going.

CHERNOFF: The company Tuesday sold Enron Metals, the largest trader on the London Metals Exchange to Sempra Energy for $145 million. The deal to transfer Enron's energy trading operations to UBS Warburg should close within the next several days.

Separately, Enron is settling its trading book, outstanding energy contracts that creditors believe could be worth billions of dollars. And Enron has a deal to sell utility, Portland General Electric, for about $1.8 billion, plus the assumption of debt to Northwest Natural Gas. Enron has also agreed to sell the Northern Natural Gas Pipeline to Dynegy, though it could challenge the deal in court. Creditors' attorney James Brownlee.

DAVID BROWNLEE, CLEARY BOTTLIEB STEEN & HAMILTON: But there are some people that would like to just get the money and get out. But like I said, those who are further down the line would rather take equity in a reorganized company.

CHERNOFF: But Enron has more to sell before it reorganizes. The profitable wind turbine business, known as Enron Wind, is on the auction block, expected to fetch at least $300 million.

And newspaper ads in India are advertising the sale of Enron's troubled Debold Power Plant, 150 miles south of Bombay. It's been idle since June because of a fight over the cost of its energy, and the company has said it plans to unload other assets in Asia and South America.

Enron's interim Chief Executive Stephen Cooper says the company will be restructured at light speed and will emerge from Chapter 11 bankruptcy. If so, Enron will be a small shadow of its former self, some pipelines and power plants. The bulk of Enron's old assets will likely be in the hands of other companies.

Allan Chernoff, CNN Financial News, New York.

(END VIDEOTAPE)

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