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Report: Enron to go on legal offensive

Feb. 18, 2002 at 2:32 PM   |   Comments

LOS ANGELES, Feb. 18 (UPI) -- While an army of plaintiff lawyers go after the embattled Enron Corp., the acting CEO of the bankrupt energy giant says Enron's own legal team will likely soon be launching an aggressive offensive against parties who played a role in the company's scandalous collapse.

Stephen Cooper, a consultant and corporate turnaround expert who is now running Enron, told the Los Angeles Times that the expected legal action would be aggressive, although he declined to identify the likely targets.

"Enron may have causes of action against institutions and individuals that could represent a meaningful asset for the estate," Cooper said in an article in Monday's edition. "I think you will see something sooner as opposed to later."

Enron has been targeted by class-action lawsuits filed mainly on behalf of former employees, stockholders and pension funds that saw millions of dollars of value evaporate during the company's plunge into Chapter 11 bankruptcy last year. At the same time, congressional investigators have zeroed in on allegations that top Enron officers played fast and loose with the books, and also sold off stock at a huge profit while preventing employees from unloading shares in their 401(k) plans.

Cooper told the newspaper that Enron had not asked any of its current or former executives to pay back any allegedly ill-gotten gains.

"I think that the recovery vehicle... will be litigation," Cooper said.

In the meantime, Cooper and his team will continue sorting out Enron's books and the remnants of its once-dominant energy trading operation in order to get out of bankruptcy as quickly as possible.

"We're going to move this process forward very quickly," Cooper said. "We're not going to wallow and linger in Chapter 11 for a day longer than we have to."

The new-look Enron, he indicated, will focus more on its power plants and natural gas pipelines rather than the aggressive and complex commodity trading favored by Kenneth Lay's regime.

"If you remove the trading (operations) from the rest of the business, it (Enron) has actually got a very good, very solid...and earnings-predictable business, which is really its power and pipes business," Cooper said.

In its final days before filing for bankruptcy, Enron lost its largest pipeline, the Northern Natural Gas line linking Texas gas fields with the Midwest market, in an aborted merger deal with rival Dynegy; Enron has already sued Dynegy for $10 billion for allegedly bailing out of the merger at the last minute.

"It's sort of like when your car breaks down and you're in the middle of nowhere and you end up hating the car. You're kicking the tires. You're kicking the bumpers. After you get over it, you realize that it's still a good car. You get the tire or whatever fixed and you just keep going," Cooper explained to the Times.

The company still, however, owns 30,000 miles of pipelines serving Southern California, Florida and the northern Midwest.

Cooper said, "I hope people will be able to relax and calm down and look at this as an opportunity for a fresh start...a fresh start by way of an investment and a fresh start for our employees."

© 2002 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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