Enron to Fire 95% of Staff After Bankruptcy Filing, CNBC Says
Bloomberg, 11/30/01

Enron Says CNBC Report of Layoffs Is Incorrect (Update1)
Bloomberg, 11/30/01

Andersen's Enron Audit Prompts Tighter `Peer Review' of Quality
Bloomberg, 11/30/01

Enron's Fall to Spark Legal Wrangles Over Derivatives (Update1)
Bloomberg, 11/30/01

Enron's Legal Woes to Make Bankruptcy Case Complex,
Bloomberg, 11/30/01

Enron Might Raise $610 Mln in Brazil Asset Sale, Analysts Say
Bloomberg, 11/30/01

Bush Spokesman Fleischer Comments on Enron Corp.'s Collapse
Bloomberg, 11/30/01

Enron's Board Was Compromised by Financial Ties (Correct)
Bloomberg, 11/30/01

EnronOnline Resumes Some Commodity Product Trading (Update1)
Bloomberg, 11/30/01

AGL Resources Ends Services Contract With Enron (Update1)
Bloomberg, 11/30/01

Arthur Andersen's Enron Audit Is Under Review by SEC (Update1)
Bloomberg, 11/30/01

Enron Fires U.K. Workers, Plans Bankruptcy Soon (Update1)
Bloomberg, 11/30/01

Enron Creditors List Potential Losses From Energy Trader's Fall
Bloomberg, 11/30/01

Dynegy Says Pipeline Option Not Dependent on Enron (Update8)
Bloomberg, 11/30/01

Enron Bankruptcy Case Would Take Years to Resolve (Update2)
Bloomberg, 11/30/01

Chairman Says Dynegy's Right to Enron Pipeline Indisputable
Bloomberg, 11/30/01

Williams Has Withdrawn Pipeline Capacity From Enron (Update1)
Bloomberg, 11/30/01

New Jersey Has Limited Exposure to Enron Decline, Treasury Says
Bloomberg, 11/30/01

Wall Street Firms, Pension Funds Face Enron Losses (Update6)
Bloomberg, 11/30/01

S&P Says Credit Derivative Exposure to Enron Totals $6.3 Bln
Bloomberg, 11/30/01

Enron's Fall to Spark Legal Wrangles Over Derivatives (Update1)
Bloomberg, 11/30/01





Enron to Fire 95% of Staff After Bankruptcy Filing, CNBC Says
2001-11-30 17:40 (New York)


     Houston, Nov. 30 (Bloomberg) -- Enron Corp. will file for
bankruptcy Monday or Tuesday and fire 95 percent of its staff,
financial news network CNBC reported, citing an unnamed employee.

     The employee said a vice president told his workers that
Enron would take the steps next week and give the employees two
weeks of severance pay for every year of service at the company,
CNBC said.



Enron Says CNBC Report of Layoffs Is Incorrect (Update1)
2001-11-30 17:59 (New York)


     (Adds in third paragraph that Enron says CNBC report is
false.)

     Houston, Nov. 30 (Bloomberg) -- Enron Corp. will file for
bankruptcy Monday or Tuesday and fire 95 percent of its staff,
financial news network CNBC reported, citing an unnamed employee.

     The employee said a vice president told his workers that
Enron would take the steps next week and give the employees two
weeks of severance pay for every year of service at the company,
CNBC said.

     Enron will not fire 95 percent of its workforce and has made
no announcement to workers on layoffs, company spokesman Vance
Meyer said. No decision has been made on whether the company will
make a bankruptcy filing, Meyer said.


Andersen's Enron Audit Prompts Tighter `Peer Review' of Quality
2001-11-30 17:27 (New York)

Andersen's Enron Audit Prompts Tighter `Peer Review' of Quality

     Washington, Nov. 30 (Bloomberg) -- Enron Corp.'s accounting
firm, Arthur Andersen LLP, will undergo tougher scrutiny in the
``peer review'' process in which U.S. audit firms police one
another's quality-control standards.

     Andersen, the fifth-largest accounting firm, said it asked
its peer reviewer, Deloitte & Touche LLP, for the additional
scrutiny in light of financial reporting issues at Enron,
according to an Andersen press release.  Deloitte & Touche had
independently determined that it wanted to conduct additional
procedures, the release said.

     ``In light of recent developments, we believe that extending
the peer review to include work done in other offices, including
Houston, and other procedures that Deloitte & Touche deems
appropriate and necessary is the right thing to do,'' Andersen
Chief Executive Joseph Berardino said in the release.

     The peer review is due on Dec. 31. Andersen's last review by
Deloitte & Touche, the third-largest accounting and consulting
firm, was in 1998. The review did not report any significant
problems.

     The SEC is examining whether Andersen acted properly in
audits of energy provider Enron, which is also under investigation
by the SEC. Andersen has acknowledged that the SEC has subpoenaed
documents related to Houston-based Enron, which is on the brink of
bankruptcy after saying it had overstated earnings.

     Andersen's announcement comes as the Public Oversight Board,
an accounting industry oversight group, plans to look at the
adequacy of the peer review system amid concerns about the failed
Enron audits. The system calls for audit firms to periodically
submit their reports on public companies for examination by other
accounting firms, in an effort to assure investors the firm's
methods comply with professional standards.

     Enron, the largest energy trader, this month said it
overstated earnings by $586 million over four-and-a-half years,
inflated shareholder equity by $1.2 billion because of an
accounting error, and failed to consolidate results of three
affiliated partnerships into its balance sheet.

     Andersen was Enron's outside auditor for more than a decade,
assuring investors that the company's financial statements
conformed with generally accepted accounting principles
     U.S. Representative John Dingell, a Michigan Democrat,
questioned the peer review process recently in a letter to the
Public Oversight Board. None of the five biggest international
accounting firms has ever issued a negative peer-review report
against another, Dingell said. The so-called Big Five also include
PricewaterhouseCoopers LLC, KPMG LLP, and Ernst & Young LP.

     ``There appears to be little reason for the public to have
faith in Andersen or the peer review process,'' Dingell wrote.

     Andersen responded that it has faith in the accounting
profession's self-regulatory process, which the POB oversees.

     A spokeswoman at Deloitte & Touche didn't return a telephone
call seeking comment.


Enron's Fall to Spark Legal Wrangles Over Derivatives (Update1)
2001-11-30 11:24 (New York)

Enron's Fall to Spark Legal Wrangles Over Derivatives (Update1)

     (Rewrites 2nd paragraph.)

     London, Nov. 30 (Bloomberg) -- Enron Corp.'s plunge toward
bankruptcy may spark legal wrangles over how to unravel the web of
derivatives contracts tied to the energy company.

     Enron is set to file for protection in the biggest Chapter 11
reorganization ever. That's likely to mean the energy trader can't
pay on derivatives it sold as insurance against default by other
borrowers, as well as defaulting on its own debts and triggering
similar contracts bought by its creditors.

     ``If I traded with Joe Bloggs down the road, and Enron owed
him a lot of money and he couldn't get it so he went into
bankruptcy, then he wouldn't fulfill his obligations under my
contract,'' said Brian Senior, head of trading at Innogy Holdings
Plc, the U.K.'s top electricity supplier. ``I don't think the
major risk is market liquidity, I think it's the domino effect.''

     Enron used derivatives -- financial instruments such as
futures and options whose value is based on other assets -- to
insure against price swings or take bets on a price's direction.
The Houston-based company had revenue of $1.9 billion from
derivatives trading last year, more than double the $765 million
in 1999, making it one of the largest traders, according to Swaps
Monitor Publications Inc.

     By comparison, Williams Cos., the No. 2 U.S. natural-gas
pipeline owner, had revenue of $1.29 billion on derivatives
trading in 2000.

     Paul Spraos, president of Swaps Monitor, a research company
that compiles trading figures, said Enron only posts derivatives
statistics once a year so there are no figures for 2001.

     Dynegy Inc. abandoned its planned merger with Enron on
Wednesday, leaving it with more than $15 billion of debt and the
possibility of bankruptcy. As well as oil and gas futures, Enron
trades derivatives based on such things as weather and information-
transmission capacity, known as bandwidth.

                        Banned From Trading

     Spraos estimates that as of Sept. 30, Enron owed $18.7
billion on derivatives trades that went sour, though he said that
doesn't take into account the collateral Enron probably posted to
back up the trades.

     The European Energy Exchange today banned Enron from trading
its products, while Australian regulators barred the company's
finance unit, Enron Australia Pty, from trading electricity
futures because its funding wasn't assured.

     U.S. Senate and House committees will investigate Enron's
decline and consider new regulations for electricity and natural-
gas trading. The Securities and Exchange Commission is also
examining the company.

     Enron had $201 billion worth of derivatives on oil, gas and
electricity at the end of last year, Swaps Monitor has reported.
That's measuring the notional amount, the face value of the
securities on which the derivatives are based.

                         `Quantifying It'

     ``Everyone will be looking at their exposure, whether they've
got collateral, and quantifying it,'' said Robert G. Pickel, chief
executive officer of the International Swaps and Derivatives
Association.

     ISDA, a New York-based trade association representing more
than 550 companies that trade derivatives, designed the legal
contracts typically used in derivatives transactions. Pickel said
those contracts are designed to address such situations.

     ``There are two potential issues relating to ISDA
documentation, as a result of the situation regarding Enron,''
Pickel said. The first involves companies that have entered
derivatives trades with Enron using ISDA's standard contract,
known as the Master Agreement. The second concerns banks that have
provided credit protection on Enron in the form of a credit-
default swap, also using ISDA documents.

     Credit-default swaps work like insurance on a company's bonds
or loans. They pay out if there's a bankruptcy, default, debt
restructuring or similar occurrence, known as a credit event.

     ``If there's a bankruptcy filing there's no question it would
be a credit event,'' Pickel said.

                           `Can't Tell'

     Enron's U.K. units are in administration, which has triggered
what lawyers define as a credit event, said Simon Firth, head of
the credit derivatives practice at Linklaters & Alliance, which is
acting for PriceWaterhouseCoopers, the accountant for Enron's
European arm.

     ``The documents are fairly robust, and we've been through
issues before,'' Firth said. He said that while ``each time the
documentation gets strengthened, you can't tell what happens until
you look at the individual cases.''

     Enron owes almost two dozen energy companies about $700
million. J.P. Morgan, the bank that advised Enron in the failed
merger with Dynegy, said it was owed $500 million for unsecured
loans. Canadian Imperial Bank of Commerce was owed $215 million in
loans and credit derivatives.

     In Europe, ABN Amro may set aside $97.5 million to cover its
Enron exposure. The energy company owes Abbey National Plc $164
million, and Dresdner Bank AG said its exposure is about $100
million.

     ``This one has left every head shaking, and people are
wondering how to organize by class of creditor and how to hire
counsel,'' said Glenn Reynolds, an analyst at CreditSights Inc. in
New York. ``Lawyers are high-fiving.''


Enron's Legal Woes to Make Bankruptcy Case Complex,
2001-11-30 12:41 (New York)

Enron's Legal Woes to Make Bankruptcy Case Complex,

     Houston, Nov. 30 (Bloomberg) -- Enron Corp.'s legal problems,
one reason for the collapse of the world's largest energy trader,
would add to the complexity of a bankruptcy filing and might take
years to resolve, experts say.

     With Dynegy Inc. having withdrawn a proposed $23 billion
takeover offer, Enron is weighing what would be the largest
bankruptcy in history and may go to court within a week. Enron
shareholders, employees and business partners are lining up to sue
the Houston-based company after its shares lost $26 billion in
value since mid-October.

     Enron restated $586 million in earnings because of accounting
irregularities, and questions surfaced about conflicts of interest
among some of the company's executives. The U.S. Securities and
Exchange Commission is investigating the company, and that
wouldn't be affected by a bankruptcy filing.

     ``There are so many legal tentacles to this thing it's
scary,'' said Chuck Tatelbaum, former vice president for research
at the American Bankruptcy Institute. ``We could be talking about
a six-year bankruptcy case here.''

     Lawsuits seeking damages from a company under Chapter 11 are
pulled into the bankruptcy case and judgments or settlements are
converted into bankruptcy claims.

                     Fraud Claims

     Among the suits likely to be included in a bankruptcy case
are claims by shareholders that the company misled investors about
its financial health. Another category would be allegations that
Enron executives improperly prevented workers from moving 401(k)
investments out of the company's stock.

     Enron probably would face accusations it broke energy trading
contracts. The agreements, known as derivatives, were used as
insurance against price swings in the energy market. With the
company poised to file for Chapter 11, it is expected to miss
payments under the contracts.

     There's also the developing battle between Enron and Dynegy
over the failed buyout bid that might end up in bankruptcy court.

     That might lead a bankruptcy judge to take a look at the
recent court case involving Tyson Foods Inc. and IBP Inc., a beef
producer. A judge in Delaware ordered Tyson to complete its buyout
of IBP after their proposed combination collapse. Tyson, like
Dynegy, had said it wasn't fully informed about IBP's financial
problems when it negotiated to acquire the beef producer.

     Dynegy said today it plans to take over Enron's Northern
Natural Gas Co. pipeline unit next month. Dynegy said it's
entitled to the pipeline under the terms of its Nov. 9 merger
agreement that gave it $1.5 billion in preferred stock in Northern
Natural Gas.

     Enron could sue as part of the bankruptcy case to stop Dynegy
from walking away from the buyout and claiming ownership to the
pipeline.

                           Complications

     Any Chapter 11 cases would be ``inordinately complicated,''
said Lynn LoPucki, a law professor at the University of California
at Los Angeles.

     The largest bankruptcy on record is Texaco's $35.9 billion
filing in 1987. Enron lists $61 billion in assets.
     Other big companies, like W.R. Grace & Co. and SGL Carbon
Inc., used bankruptcy filings to manage lawsuits, said Ken
Eckstein, a New York attorney who handles bankruptcy litigation.

     W.R. Grace, a financially healthy chemical maker, filed for
Chapter 11 protection in April to cope with asbestos-related
lawsuits. SGL Carbon is the U.S. unit of a German company with a
market value of more than $1.2 billion that makes products used in
steel production. SGL filed bankruptcy papers in 1999 to dispose
of customers' suits over price-fixing claims.

     What sets Enron apart are the questions about its financial
viability, Eckstein said. He represented customers suing SGL as
part of the bankruptcy case.

     ``Here, you have a fundamentally broken company,'' Eckstein
said. ``It may never emerge from bankruptcy.''

     That makes it tougher to gauge how much other creditors
might recover, he said.

                    `Makes Me Mad'

     Enron investors aren't optimistic about the future of the
company's shares.

     ``I took at least a 60 percent hit on them,'' said Jim
Anders, a Columbia, South Carolina, lawyer who has sold shares.
``It really makes me mad. I'd like to get my hands on some of
those executives who were doing the insider deals. That really
shook people's confidence in the company.''

     Enron's fall was accelerated by questions about some
partnerships the company used to move assets and debt off the
company's books. Many investors had complained Enron's financial
reports hid the significance of the partnerships.

     Enron's former Chief Financial Officer Andrew Fastow led some
of the partnerships and earned more than $30 million through their
dealings with Enron, the company disclosed. Fastow and other
executives later were fired over their connection to the
partnerships.

     Anders acknowledged that bankruptcy law puts shareholders and
litigants at the back of the repayment line.

     ``I know we've had it and aren't going to get squat back,''
Anders said. ``The company led us to believe Enron was as solid as
GE or one of the big banks. Now the bank is busted.''


Enron Might Raise $610 Mln in Brazil Asset Sale, Analysts Say
2001-11-30 13:24 (New York)

Enron Might Raise $610 Mln in Brazil Asset Sale, Analysts Say

     Sao Paulo, Nov. 30 (Bloomberg) -- Enron Corp. may be able to
raise as much as $610 million from the sale of assets in Brazil,
including two power plants and stakes in two gas distributors,
analysts and investors said.

     The U.S. energy trader, which is on the brink of bankruptcy,
also might reduce the $700 million price tag on its 99 percent
stake in power distributor Elektro-Eletricidade e Servicos SA that
it has tried to sell for more than a year, analysts said.

     ``They would sell those assets to make a quick buck,'' said
Marcos Severine, a power utility analyst at Sudameris Corretora.

     About 56 percent of Enron's $6.5 billion of overseas assets
were in South America, most in Brazil, as of June 30. Enron said
it currently plans no change to its operations in the country.

     The U.S. company is expected to file for bankruptcy
protection in the biggest Chapter 11 reorganization in history,
which may force the company to sell assets to pay about $15
billion of debt. Dynegy Inc. this week abandoned its proposed
merger with Enron. Enron, which had less than $2 billion of cash
as of last week, has more than $61 billion in assets.

     Enron may fetch as much as $190 million from the sale of
Eletrobolt, a 380-megawatt power plant, and $220 million from
RioGen, another power plant, Severine said. Both are based in Rio
de Janeiro.

                           Gas Companies

     Enron also may be able to raise $200 million from the sale of
stakes in two natural gas distributors, said a spokesman for
Petros, the employee pension fund of Petroleo Brasileiro, which is
bidding for one of the companies. Brazilian energy regulators
already have approved the sale, though it still requires backing
from antitrust regulators.

     If Enron tries again to sell Elektro, it may be required to
offer the company to the federal government at a discount or to
another private company, analysts said. The country's regulations
aren't clear, they said.

     Regulatory approval may delay any sale of assets in Brazil.
In addition, price controls in Brazil's power industry will limit
the amount of money Enron will be able to raise from the sales,
analysts said.

     Investors are demanding lower prices for power companies in
Brazil after electricity rationing and price controls over the
past two years cut earnings of power distributors and generators,
analysts said. Elektro has posted losses for six quarters.

                        Venezuela, Mexico

     A bankruptcy filing by Enron would probably result in the
cancellation of its investment plans in Venezuela, Latin
America's largest oil and natural gas producer, analysts said.

     Enron had been slated to invest three-quarters of the $700
million needed to build a liquid natural gas processing plant with
state oil company Petroleos de Venezuela SA.

     PDVSA officials declined to comment on whether the plant,
which would cool natural gas until it liquefies, would go on with
a new partner.

     Enron, which also owns a small Venezuelan power company,
pulled out of exploration in 2000 from an offshore block in the
Gulf of Paria between Venezuela and Trinidad and Tobago.

     Enron also has smaller investments in Mexico, Argentina and
Colombia. Enron holds 20 percent of a joint venture building a
$189 million power plant in Monterrey, Mexico.

     Tractebel SA took an 80 percent share in the project in
November.

                           Colombia

     Enron and Promigas SA, a Colombian natural gas pipeline
operator, each have a 50 percent stake in Centrogas SA, a natural
gas pipeline that transports about 400 million cubic feet of gas a
day about 900 kilometers from the northern Guajira Peninsula to
Barrancabermeja, the main oil refining city in central Colombia.
The gas is produced at an offshore field operated by Texaco.

     Officials at Promigas weren't available for comment.
     Enron closed its administrative office in Colombia about
three months ago, leaving an attorney to represent it in Colombia.

     Enron's Argentine assets include Azurix Buenos Aires SA, a
natural gas and water utility, and shares in Transportadora de Gas
del Sur SA.

     Perez Companc, which owns shares in Transportadora, is
prohibited by law from increasing its stake in the distribution
company.

     ``If the law is modified, then yes, we would consider it,''
said Mario Grandinetti, head of Perez Companc's institutional
relations. ``But there are also economic issues to consider.'


Bush Spokesman Fleischer Comments on Enron Corp.'s Collapse
2001-11-30 14:48 (New York)


     Washington, Nov. 30 (Bloomberg) -- Following are comments
from White House press secretary Ari Fleischer on the collapse of
Enron Corp., which faces the biggest bankruptcy ever. The energy
committees in the Senate and House have said they'll investigate
the collapse and consider new regulations for electricity and
natural-gas trading.

     ``The president understands that Congress at all times should
exercise its proper oversight roles. That includes anything that,
in a case like this, the Senate sees fit, in terms of an
investigation into the collapse of a company. That's the purview
of the Congress,'' Fleischer said.

     ``As I indicated, the federal government, the administration,
is already doing that. The Department of Treasury and other
entities are monitoring it. So I think we're all looking with the
same cause of concern.''


Enron's Board Was Compromised by Financial Ties (Correct)
2001-11-30 15:01 (New York)

Enron's Board Was Compromised by Financial Ties (Correct)

     (Corrects percentage of Natco Group sales that went to Enron
to 0.16 percent in 25th paragraph, and adds that sales are within
Council of Institutional Investors standards in 26th paragraph.)

     New York, Nov. 29 (Bloomberg) -- Enron Corp. plunged from the
largest energy trader to the verge of bankruptcy under a board of
directors whose independence was undercut by financial ties to
management, according to corporate governance experts.

     Enron gave seven of its 14 directors consulting contracts,
sales to their business or donations to their non-profit
institutions, according to company and public records. The
recipients include three members of Enron's audit committee, which
is responsible for financial oversight.

     Lord John Wakeham, for example, a former leader of the
British House of Commons, sits on the audit committee. Enron gave
him a $72,000-a-year consulting contract. John Mendelsohn,
president of the MD Anderson Cancer Center in Houston, is also on
the audit committee. In the last five years, Enron and its
Chairman Kenneth Lay have donated $567,900 to the cancer center.

     ``To get on a board you have to be `clubbable,' but this
looks like collegiality turning to cronyism,'' said Allan
Cleveland, counsel to the New Hampshire Retirement System, an
Enron shareholder.

     Enron, based in Houston handled almost a quarter of all
natural gas and electricity trades. During the past seven weeks,
its board has presided over a $26 billion drop in market value
that began after the company wrote down $1.2 billion in
shareholder equity and reported it had overstated earnings by $586
million since 1997.

                          Responsibility

     As Enron's shares fell, the company suffered a cash crunch.
It sought an infusion of capital and agreed to be acquired by
Dynegy Inc., a Houston-based rival. That plan collapsed yesterday
as investors balked at investing $1.5 billion, prompting Dynegy to
withdraw its offer. Enron shares today fell another 39 percent, or
24 cents, to 37 cents per share. The stock began the year trading
at $83.125.

     Corporate boards are responsible for protecting shareholder
interests by reviewing the work of top executives. To accomplish
that, two-thirds of a board should be ``independent'' from
management, according to the Council of Institutional Investors,
which represents pension funds.

                           Independence

     The council defines an independent director as ``a person
whose directorship constitutes his or her only connection to the
corporation.''

     ``Consulting contracts, donations to non-profit organizations
linked to directors, this eats away at independence,'' said Ann
Yergen, the council's director of research.

     Corporate governance standards established by the New York
and NASDAQ stock exchanges say all audit committee members should
be independent.

     Enron board members, including Wakeham and Mendelsohn,
declined repeated requests for interviews. Vance Meyer, a company
spokesman, said Enron could not immediately respond to questions
regarding the board.

     Enron's board met nine times in 2000, with each member
receiving annual compensation of $79,000 in cash and stock. Every
member attended at least 75 percent of the meetings, except Ronnie
Chan, chief executive of the Hang Lung Group, a Hong Kong
development business, according to company filings.

                           Relationships

     Based on Enron proxy statements and other documents, the
following relationships existed between Enron and board members:

     -- Robert A. Belfer, 65, has been on the board since 1983 and
sits on the executive committee. He is Enron's largest individual
shareholder, with 8.5 million shares, and is chairman and chief
executive of Belco Oil & Gas Corp., which operates from an office
overlooking New York's Central Park. In 2000, Belco had $32
million in trade settlements and $1 million in option premiums
with Enron Trade Resources Corp., an Enron subsidiary.

     -- John Urquhart, 72, a former General Electric Co.
executive, sat on the board until last May. He received an annual
consulting fee from Enron of almost $200,000 a year as a special
adviser to the Enron chairman.

     -- Mendelsohn, 64, is a physician who was formerly head of
medicine at Memorial Sloan-Kettering Cancer Center in New York. He
pioneered research in controlling cancer through the chemistry of
a tumor's growth and was on President George W. Bush's short list
to head the National Institutes of Health. Since 1996, Mendelsohn
has been president of the M.D. Anderson Cancer Center, part of the
University of Texas health system.

                             Donations

     Mendelsohn joined Enron's board in 1999. Enron has donated
$221,650 to the cancer center. Lay and a foundation he established
with his wife, the Linda and Ken Lay Family Foundation, have
donated $346,250 in the last five years. The Enron Foundation
pledged $1.5 million for a new clinic.

     -- Charles LeMaistre, 77, headed the Anderson Cancer Center
for 18 years until retiring in 1996. He has been an Enron board
member for 16 years, is a member of the executive committee and
chairs the compensation committee. That panel awarded Lay a $20
million-a-year severance package that he renounced two weeks ago.

     -- Wendy Gramm, 56, has held positions at the Federal Trade
Commission and the U.S. Office of Management and Budget and was
chairman of the U.S. Commodity Futures Trading Commission. She is
director of regulatory studies at the Mercatus Center of George
Mason University in Fairfax, Virginia. She is married to Phil
Gramm, a U.S. Republican Senator from Texas.

     In the last three years, Enron and the Ken and Linda Lay
Family Foundation have donated more than $50,000 to the university
and the Mercatus Center, according to university records.

                          Consulting Fee

     -- Wakeham, 68, a chartered accountant and self-made
millionaire, became a force in the government of former U.K. Prime
Minister Margaret Thatcher. He was known as her ``Mr. Fix-it.'' He
was the target of an Irish Republican Army bomb in 1984 that
killed his wife and left him buried under rubble for seven hours.

     Enron pays Wakeham $6,000 a month to advise the company on
European business.

     -- Herbert S. Winokur Jr., 57, is the managing partner of
Capricorn Investors LP, a holding company that owns Natco Group
Inc., a maker of oil and gas production equipment.

     An Enron board member since 1985, Winokur serves on the
executive committee, chairs the finance committee and was
appointed to a special committee created to look into how Enron
was managed.

     In 2000, Natco had $370,294 in sales to Enron subsidiaries,
0.16 percent of sales.

     ``Business between companies linked to board members ought to
be discouraged,'' said Yergen of the Council of Institutional
Investors. Still, Natco's sales fall within the group's
recommended standards. ``We think that anything over 1 percent is
compromising,'' Yergen said.

     Enron said in a proxy statement it believes the terms of the
sales were ``no less favorable than the terms of similar
arrangements with third parties.''

                          Audit Committee

     Enron's audit committee poses particular problems, according
to corporate governance experts. The committee is composed of
Wakeham, Mendelsohn, Gramm, Chan, Robert Jaedicke, a retired
Stanford University Business School dean, and Paulo Ferraz
Pereira, a Brazilian banker.

     Wakeham, Gramm and Mendelsohn are not independent, according
to corporate governance experts and standards.

     ``For the audit committee, you don't even want the appearance
of a conflict,'' said Charles Drott, a forensic accountant who has
testified as an expert witness in bankruptcy and business fraud
cases involving companies such as DeLorean Motor Co. and Lincoln
Savings & Loan Association.

     The committee is spread across the globe, with Wakeham in
London, Ferraz in Rio de Janeiro and Chan in Hong Kong.

     ``The question is why this committee?'' Drott asked. ``For a
big sophisticated company like Enron, why did they choose these
people?''

                           Swift Descent

     Enron's rapid decline -- Standard & Poor's Corp. slashed its
credit rating eight levels this month to junk status -- centered
on its dealings with partnerships the company used to move assets
and debt off the company's books. Many investors had complained
Enron's financial reports obscured the partnerships' businesses to
the point they were impossible to understand. Enron's former Chief
Financial Officer Andrew Fastow led some of the partnerships and
earned more than $30 million through their dealings with Enron,
the company disclosed.

     Enron documents filed with the U.S. Securities and Exchange
Commission state that the board determined that Fastow's
participation in the partnerships would ``not adversely affect the
interests of Enron.'' The documents also say the board approved
all transactions involving partnerships that were brought to it by
Lay and other Enron executives.

     ``What went wrong at Enron?'' said Patrick McGurn, a vice
president at Institutional Investor Services, which evaluates
board candidates for institutional investors. ``A lot of it goes
back to the board.''


EnronOnline Resumes Some Commodity Product Trading (Update1)
2001-11-30 15:58 (New York)

EnronOnline Resumes Some Commodity Product Trading (Update1)

     (Updates with trader comment in fourth paragraph, today's
halt in EnronOnline system in sixth and seventh paragraphs,
trading at other exchanges in 10th and 11th paragraphs.)

     New York, Nov. 30 (Bloomberg) -- Enron Corp. resumed Internet
trading in almost one-third of the commodity products it normally
offers, as buyers and sellers sought to unwind positions following
a shutdown of the Web site Wednesday.

     EnronOnline offered 472 products today, including natural
gas, power, metals and forest products, compared with 65
yesterday, spokesman Mark Palmer said. The marketplace normally
offers about 1,600 products for which Enron is a buyer or seller
in each transaction.

     The Web site, which used to handle about $2.8 billion a day
in trades, shut for several hours Wednesday when Dynegy Inc.
pulled out of a planned merger with Enron, which is now poised to
file for bankruptcy. Trading with Enron has plunged on concern
that the company wouldn't be able to meet its obligations.

     ``People are only making selective trades, unwinding their
positions'' with Enron, said David Chang, vice president of energy
trading at Bank of America in New York. ``People are adding no new
net exposure.''

     Trading has shifted to other marketplaces such as the
Intercontinental Exchange, Dynegy Direct and the New York
Mercantile Exchange, traders said.

                        Trading Disrupted?

     Users of the system reported that EnronOnline stopped
functioning at 2 p.m. for about 15 minutes today, shortly after
Enron announced that it was dismissing 1,100 of its U.K.
employees. The companied denied service was interrupted.

     Enron still isn't offering its full spectrum of products,
said Kyle Cooper, an analyst at Salomon Smith Barney in Houston.
     Enron recorded about 825 transactions on the system
yesterday, down from an average of about 5,000 a day, Palmer said.

     Houston-based Enron is the counter-party for every trade at
EnronOnline. Some of its rivals, such as the Intercontinental
Exchange and the Nymex, are intermediaries for transactions that
are backed by funds from clearinghouses or banks.

     The Nymex traded a record 79,701 natural gas options
contracts yesterday and a record 228,728 natural gas futures
contracts on Wednesday. By 2:49 p.m. today, it had traded about
133,000 futures.

     The Intercontinental Exchange Inc., an Internet-based system
in Atlanta, said trading activity so far this month was up 65
percent from October levels.

     EnronOnline had accounted for about 60 percent of Enron's
energy trading volume. It also trades commodities by telephone.

     ``Traders we speak to are still working on their Enron
exposure, doing what they can to minimize that,'' said Justin
Fohsz, an oil broker at Starsupply Petroleum Inc. in Englewood,
New Jersey. ``Trading has taken a back seat for the past few days
and I don't think this is going to change any time soon.''

     Shares of Enron were down 8 cents at 28 cents in late
trading, compared with $70 a year ago.


AGL Resources Ends Services Contract With Enron (Update1)
2001-11-30 16:15 (New York)

AGL Resources Ends Services Contract With Enron (Update1)

     (Updates with AGL comment in second paragraph, closing share
prices in fifth paragraph.)

     Atlanta, Nov. 30 (Bloomberg) -- AGL Resources Inc., which
owns natural-gas utilities in the southeastern U.S., ended a
contract for energy services provided by cash-strapped Enron Corp.
to its Virginia Natural Gas unit.

     The two-year contract for gas, transmission and other
services began in December and was ended without penalties, AGL
spokesman Russ Williams said. He said he didn't know the value of
the pact.

     Enron, facing the disintegration of its energy-trading
business and saddled with $15 billion in debt, probably will file
for bankruptcy, analysts say. Rival Dynegy Inc. withdrew a buyout
bid Wednesday after Standard & Poor's cut Enron's debt rating to
junk status.

     Atlanta-based AGL said its business exposure to Enron was
``minimal,'' and the end of the contract eliminates the prospect
of losses tied to Enron. AGL has 1.8 million customers in Georgia,
southeast Virginia and Chattanooga, Tennessee.

     Shares of Enron, which reached $84.88 just 11 months ago,
fell 10 cents to 26 cents. AGL fell 57 cents to $21.43.


Arthur Andersen's Enron Audit Is Under Review by SEC (Update1)
2001-11-30 15:17 (New York)

Arthur Andersen's Enron Audit Is Under Review by SEC (Update1)

     (Adds SEC no-comment in fifth paragraph, accounting board
review in 12th paragraph.)

     Chicago, Nov. 30 (Bloomberg) -- The Securities and Exchange
Commission is investigating whether Arthur Andersen LLP acted
properly in audits of Enron Corp., which already is being examined
by the SEC, a person with knowledge of the probe said.

     Andersen, the fifth-largest accounting firm, acknowledged the
SEC has subpoenaed documents related to audits of Houston-based
Enron, which is on the brink of bankruptcy after saying it had
overstated earnings for four and a half years.

     ``As is customary when the SEC investigates a financial
reporting matter of a company we audit, they've asked for our
cooperation,'' said David Tabolt, an Andersen partner and
spokesman. ``The SEC is reviewing our work as part of their
process.'' Enron shares have plummeted to 30 cents from a high of
$37.50 as recently as Sept. 11.

     Enron's collapse has focused government attention on the
company's bookkeeping practices and the audits by Andersen, which
last June agreed to pay $7 million to settle SEC charges it issued
false and misleading audit reports about trash-hauler Waste
Management Inc. U.S. attorneys in Houston and Manhattan, who would
prosecute individuals or companies if criminal wrongdoing is
found, are monitoring the SEC's Enron probe, the person with
knowledge of the investigation said.

     ``We don't confirm or deny the existence of investigations,''
SEC spokesman Michael Robinson said.

                       Enron Restatement

     Andersen worked as Enron's outside auditor for more than a
decade, assuring investors the company's financial statements
conformed with generally accepted accounting principles. Tabolt
declined to say when the SEC subpoena was received, or what
documents were requested.

     Earlier this month, Enron said it overstated earnings by $586
million over four-and-a-half years, inflated shareholder equity by
$1.2 billion because of an ``accounting error,'' and failed to
consolidate results of three affiliated partnerships into its
balance sheet. Last month, Enron said it was the subject of a
formal investigation by the SEC.

     Enron restated its financial reports as the company suffered
a cash crisis triggered by disclosure of the cut in shareholder
equity and the start of an SEC investigation.

     The prospect of dual investigations by the SEC and the
Justice Department's U.S. attorneys arises because the SEC only
has authority to file civil lawsuits alleging securities law
violations. The Justice Department has jurisdiction on criminal
securities law prosecutions.

                      Parallel Probes

     The agencies often conduct parallel probes, such as the
current investigations of initial public offering practices at
some of Wall Street's biggest underwriters. Yesterday, Credit
Suisse First Boston said the Manhattan U.S. attorney has dropped a
criminal probe of how it allocated IPO shares, while the SEC is
continuing to investigate.

     Last year, the SEC and Justice Department prosecutors both
filed charges against executives accused of inflating revenue at
HBO & Co. before its 1999 acquisition by McKesson Corp.

     Citing concerns raised by Andersen's audits of Enron, Public
Oversight Board Chairman Charles Bowsher last week said that
accounting industry oversight group plans to examine the adequacy
of its peer-review system for ensuring proper audit procedures.
Under that system, each of the five biggest international
accounting firms is reviewed periodically by another firm in the
so-called Big Five.

                       Non-Audit Work

     Enron paid Andersen $52 million last year, $25 million for
auditing and $27 million for services including business and tax
consulting, due diligence procedures and help in preparing SEC
filings, according the company's proxy statement. Enron and
Andersen declined to provide further detail.

     Asked if the SEC request includes documents relating to
Andersen's consulting work for Enron, Tabolt said, ``questions
about the nature of the investigation should be directed to the
SEC.''

     Earlier this year, Andersen paid $130 million to settle
private lawsuits alleging the firm allowed Waste Management and
Sunbeam Corp. to file false financial reports that cost investors
billions of dollars in losses.

     In April, Andersen agreed to pay $110 million to settle a
securities fraud class-action suit filed over its accounting work
for appliance maker Sunbeam Corp. The appliance maker filed for
bankruptcy protection in February. Earlier this month the firm
agreed to pay $20 million to settle a class-action lawsuit about
its work with Waste Management.


Enron Fires U.K. Workers, Plans Bankruptcy Soon (Update1)
2001-11-30 15:49 (New York)

Enron Fires U.K. Workers, Plans Bankruptcy Soon (Update1)

     (Updating share change.)

     New York, Nov. 30 (Bloomberg) -- Enron Corp. fired 1,100
employees in the U.K. as the energy trader sought to line up
financing for the largest U.S. bankruptcy reorganization.

     Enron's bankers, led by J.P. Morgan Chase & Co. and Salomon
Smith Barney Inc., sought to arrange more than $1 billion of loans
to help Enron trade while in bankruptcy, said people familiar with
the situation. The debtor-in-possession financing may be secured
in part by $1.8 billion in proceeds Enron expects to receive by
selling its Portland General Electric Co. unit.

     Enron is also considering using its Northern Natural Gas Co.
pipeline, which analysts estimate is worth $2.7 billion, as
collateral for new loans. Dynegy Inc. said it would seek to block
such a move by exercising an option to purchase the pipelines.

     ``This whole thing is going to be in the courts,'' said
Kathleen Vuchetich, who helps manage $1.4 billion in assets. The
firm owns Dynegy shares in the Strong American Utilities fund that
Vuchetich helps run.

     Enron will have 250 U.K. workers after the dismissals,
according to a statement by PricewaterhouseCoopers, which is
overseeing the company's British operations. Enron has 6,800
workers in Europe and 21,000 total.

     More firings are likely in the U.S. after its $23 billion
acquisition by Dynegy collapsed earlier this week. That failure,
and a credit-rating downgrade to junk, left the company short of
cash needed to pay its $15 billion of debt.

     Enron, with less than $2 billion in cash as of last week,
needs to pay $690 million to lenders by mid-December and is
responsible for another $3.9 billion in debt owed by affiliated
partnerships.

                          Pipeline Debate

     Dynegy said it plans to take over Enron's Northern Natural
Gas pipeline on Dec. 12, even if Enron files for bankruptcy.
Dynegy invested $1.5 billion in Enron as part of the merger plan,
giving it preferred stock in Northern Natural Gas. Dynegy backed
out of the takeover Wednesday.

     Enron likely will go to court to argue that Dynegy didn't
have the right to end the merger, so it shouldn't get the
pipeline, New York bankruptcy lawyer Robert Christmas said. Enron
needs collateral for loans to stay in business.

     Enron pledged assets of Northern Natural Gas and Transwestern
Pipeline as collateral for $1 billion in loans from J.P. Morgan
and Salomon this month. The banks may not back Enron's claim, as
they are more likely to be repaid by Dynegy, said Fahnestock & Co.
analyst Fadel Gheit.

     ``I expect to see Enron, J.P. Morgan, Citibank and Dynegy all
in court fighting over who owns the pipeline,'' said Jon Kyle
Cartwright, a fixed-income senior analyst at Raymond James &
Associates. ``At this point we put our chips on Dynegy. We suspect
they had the time and expertise to perfect their purchase.''

                         Biggest Pipeline

     Dynegy will assume $950 million of Northern Natural debt with
the purchase. Enron can buy the pipeline back if it pays Dynegy
$1.5 billion, plus interest, within 180 days of the merger's
collapse, Dynegy Chairman Chuck Watson said yesterday. Watson said
he would rather get the pipeline than recoup the investment.

     Northern Natural Gas, the biggest of Enron's four gas
pipelines, stretches from the Permian Basin in Texas to the Great
Lakes. Dynegy's right to buy it ``is not dependent on Enron's
agreement to our right to terminate the merger,'' Dynegy Chief
Financial Officer Rob Doty said today in a statement.

     Shares of Enron fell 9 cents to 27 cents in early afternoon
trading. They had fallen 99 percent since mid-October. Dynegy fell
$2.34, or 7 percent, to $31.31. Enron's unsecured bonds were bid
at 18 cents on the dollar this morning, down about 3 cents from
yesterday, traders said.

     Enron, which got its start as a natural-gas pipeline company,
was transformed in the past decade into the biggest competitor in
the business of trading energy. As part of the company's strategy,
it shifted its focus from developing assets such as pipelines and
power plants to developing markets for commodities. As a result,
Enron has few assets it can use as collateral for loans.

                           On the Brink

     Enron has been unable to raise enough cash to ensure it can
pay debts and is having trouble financing daily operations.
Dynegy's decision to back out of the acquisition left Enron on the
brink of bankruptcy.

     Northern Natural Gas can't take any action, including filing
for bankruptcy, without the consent of Dynegy as a preferred
stockholder, Dynegy said in the statement.

     ``From what I understand, Dynegy has as strong a legal claim
to the pipeline as they can have,'' said Commerzbank Securities
analyst Andre Meade. ``They structured the deal in a way, with
bankruptcy as a likely scenario, to have good legal standing.''

     Meade rates Enron ``sell'' and Dynegy ``buy'' and doesn't own
shares of either company. He values Northern Natural at $2.7
billion, more than the $2.47 billion that Dynegy is paying,
including debt.

     ``Dynegy paid fair market value (for the pipeline), and they
have the law and the facts on their side,'' said John Olson,
research director for Sanders, Morris, Harris Group Inc., a
Houston financial-services firm.

     Watson said yesterday he hopes that Northern Natural
employees won't quit after the takeover. Enron and Dynegy are both
based in Houston.

     ``Dynegy has contacted Enron to begin a transition of the
pipeline's management and expect Enron's full cooperation,'' Doty
said today.


Enron Creditors List Potential Losses From Energy Trader's Fall
2001-11-30 15:54 (New York)

Enron Creditors List Potential Losses From Energy Trader's Fall

     New York, Nov. 30 (Bloomberg) -- Enron Corp.'s creditors,
companies spanning the energy, financial and banking industries,
stand to lose billions of dollars from the collapse of the energy
trader. The following list shows how much each might lose.

*T
Company                          Description                 Amount ($mil)

J.P. Morgan Chase & Co.          U.S. securities company         500
John Hancock Financial Services  U.S. life insurer               320
Credit Lyonnais SA               French bank                     250
Canadian Imperial Bank           Canadian bank                   215
ING Groep NV                     Dutch financial-services co.    195
Principal Financial Group        U.S. insurer                    172
Abbey National Plc               British bank                    164
Daiwa Asset Management Co.       Japanese financial-services co. 140
Australia & New Zealand Bnk Grp  Australian bank                 120
National Australia Bank Ltd.     Australian bank                 104
Dresdner Bank AG                 German bank                     100
HVB Group                        German bank                     100
Duke Energy Corp.                U.S. energy company             100
Williams Cos.                    U.S. energy company             100
ABN Amro Holding NV              Dutch bank                      97.5
Lincoln National Corp.           U.S. insurer                    95
Deutsche Bank AG                 German bank                    <90
Reliant Resources Inc.           U.S. energy company             80
Dynegy Inc.                      U.S. energy company             75
Bear Stearns & Co.               U.S. securities company         69
MetLife Inc.                     U.S. insurer                    62.6
Mirant Corp.                     U.S. energy company             60
Aquila Inc.                      Unit of U.S.-based UtiliCorp   <50
American Electric Power Co.      U.S. energy company             50
El Paso Corp.                    U.S. energy company             50
Commerzbank                      German bank                    <45
Centrica Plc                     U.K. energy company             43
Exelon Corp.                     U.S. energy company            <20
Energen Corp.                    U.S. energy company             18.3
Sempra Energy                    U.S. energy company            <15
Dominion Resources Inc.          U.S. energy company             11
NRG Energy Inc.                  U.S. energy company             10
RWE AG                           German energy company          <8.9
Peoples Energy Corp.             U.S. energy company             8.0
St. Mary Land & Exploration      U.S. energy company             4.17
KeySpan Corp.                    U.S. energy company            <4.0
Houston Exploration Co.          U.S. energy company             3.9
Western Gas Resources Inc.       U.S. energy company             2.6
FPL Group Inc.                   U.S. energy company            <2.0
XL Capital Ltd.                  Bermudan insurer        ``limited''

< is ``less than''
*T


Dynegy Says Pipeline Option Not Dependent on Enron (Update8)
2001-11-30 16:06 (New York)

Dynegy Says Pipeline Option Not Dependent on Enron (Update8)

     (Updates with closing share prices in 12th paragraph.)

     Houston, Nov. 30 (Bloomberg) -- Dynegy Inc. said it plans to
take over Enron Corp.'s Northern Natural Gas Co. pipeline unit on
Dec. 12, even if Enron seeks Chapter 11 bankruptcy protection or
challenges Dynegy's decision to call off their merger.

     Dynegy invested $1.5 billion in Enron as part of the merger
agreement, giving it preferred stock in Northern Natural and the
right to buy the business for about $23 million. Dynegy backed out
of the $23 billion buyout of Enron on Wednesday and said it would
exercise the right to acquire the 16,500-mile pipeline.

     Enron said it's reviewing options for Northern Natural, which
analysts estimate is worth $2.7 billion. Enron likely will go to
court to argue that Dynegy didn't have the right to end the
merger, so it shouldn't get the pipeline, New York bankruptcy
lawyer Robert Christmas said. Enron needs collateral for loans to
stay in business.

     ``This whole thing is going to be in the courts, regardless
of whether Dynegy wants this asset,'' said Kathleen Vuchetich, who
helps manage $1.4 billion in assets, 4.2 percent of them Dynegy
shares, in the Strong American Utilities fund. ``Dynegy may as
well be fighting for something worthwhile.''

     J.P. Morgan Chase & Co. and Citigroup Inc.'s Salomon Smith
Barney Inc. may join the dispute. Enron pledged assets of Northern
Natural and the Transwestern Pipeline as collateral for $1 billion
in loans from the banks this month. The banks may not back Enron's
claim, as they are more likely to be repaid by Dynegy, said
Fahnestock & Co. analyst Fadel Gheit.

     ``I expect to see Enron, J.P. Morgan, Citibank and Dynegy all
in court fighting over who owns the pipeline,'' said Jon Kyle
Cartwright, a fixed-income senior analyst at Raymond James &
Associates. ``At this point we put our chips on Dynegy. We suspect
they had the time and expertise to perfect their purchase.''

                         Biggest Pipeline

     Dynegy will assume $950 million of Northern Natural debt with
the purchase. Enron can buy the pipeline back if it pays Dynegy
$1.5 billion, plus interest, within six months of the Nov. 9
merger agreement date, Dynegy Chairman Chuck Watson said today in
an interview.

     ``I'd rather have the pipe than the $1.5 billion, but they
absolutely have the right to do that,'' Watson said. ``That was
the deal from day one.''

     Northern Natural, the biggest of Enron's four gas pipelines,
stretches from the Permian Basin in Texas to the Great Lakes.
Dynegy's right to buy it ``is not dependent on Enron's agreement
to our right to terminate the merger,'' Dynegy Chief Financial
Officer Rob Doty said today in a statement.

     After Dynegy canceled the buyout, Enron said in a statement
it was reviewing Dynegy's claim to the pipeline. Enron has
suffered from a crisis of credibility, integrity and leadership
for months, Watson said. Questioning the pipeline agreement ``is
not helping,'' he said.

     ``I find it out of balance that (Enron is) questioning
this,'' Watson said. ``To throw this out in the press that this
might be challenged is irresponsible and disingenuous.''

     Shares of Enron fell 11 cents to 25 cents. They have fallen
99 percent since mid-October. Dynegy fell $3.30, or 9.8 percent,
to $30.35. Both companies are based in Houston.

     Enron's 6.4 percent notes maturing in 2006 fell as much as 4
cents to 17 cents on the dollar today, traders said.

                            Few Assets

     Enron, which got its start as a natural-gas pipeline company,
was transformed in the past decade into the biggest competitor in
the business of trading energy. As part of the company's strategy,
it shifted its focus from adding assets such as pipelines and
power plants to developing markets for commodities. As a result,
Enron has few assets it can use as collateral for loans.

     Enron has been unable to raise enough cash to ensure it can
pay debts and is having trouble financing daily operations.
Dynegy's decision to back out of the acquisition left Enron on the
brink of bankruptcy.

     Northern Natural can't take any action, including filing for
bankruptcy, without the consent of Dynegy as a preferred
stockholder, Dynegy said in the statement.

     ``From what I understand, Dynegy has as strong a legal claim
to the pipeline as they can have,'' said Commerzbank Securities
analyst Andre Meade. ``They structured the deal in a way, with
bankruptcy as a likely scenario, to have good legal standing.''

     Meade rates Enron ``sell'' and Dynegy ``buy'' and doesn't own
shares of either company. He values Northern Natural Gas at
$2.7 billion, more than the $2.47 billion that Dynegy is paying,
including debt.

     ``Dynegy paid fair market value (for the pipeline), and they
have the law and the facts on their side,'' said John Olson,
research director for Sanders, Morris, Harris Group Inc., a
Houston financial-services firm.

     Watson said yesterday he hopes that Northern Natural
employees won't quit after the takeover. The unit has 1,100
employees.

     ``Dynegy has contacted Enron to begin a transition of the
pipeline's management and expect Enron's full cooperation,'' Doty
said.


Enron Bankruptcy Case Would Take Years to Resolve (Update2)
2001-11-30 16:20 (New York)

Enron Bankruptcy Case Would Take Years to Resolve (Update2)

     (Updates Enron shares in 12th paragraph.)

     Houston, Nov. 30 (Bloomberg) -- Enron Corp. is likely to face
a maze of lawsuits that would complicate a bankruptcy filing and
take years to resolve, experts say.

     With Dynegy Inc. having withdrawn a proposed $23 billion
takeover offer, Enron is weighing what would be the largest
bankruptcy in history and may go to court within a week. Enron
shareholders, employees and business partners are lining up to sue
the Houston-based company after its shares lost $26 billion in
value since mid-October.

     Enron restated $586 million in earnings because of accounting
irregularities, and there are potential conflicts of interest
among some of the company's executives. The U.S. Securities and
Exchange Commission is investigating the company, and that
wouldn't be affected by a bankruptcy filing.

     ``There are so many legal tentacles to this thing it's
scary,'' said Chuck Tatelbaum, former vice president for research
at the American Bankruptcy Institute. ``We could be talking about
a six-year bankruptcy case here.''

     Lawsuits seeking damages from a company under Chapter 11 are
pulled into the bankruptcy case and judgments or settlements are
converted into bankruptcy claims.

                     Fraud Claims

     Among the suits likely to be included in a bankruptcy case
are claims by shareholders that the company misled investors about
its financial health. Another category would be allegations that
Enron executives improperly prevented workers from moving 401(k)
investments out of the company's stock.

     Enron probably would face accusations it broke energy trading
contracts. The agreements, known as derivatives, were used as
insurance against price swings in the energy market. With the
company poised to file for Chapter 11, it is expected to miss
payments under the contracts.

     There's also the developing battle between Enron and Dynegy
over the failed buyout bid that might end up in bankruptcy court.

     That might lead a bankruptcy judge to take a look at the
recent court case involving Tyson Foods Inc. and IBP Inc., a beef
producer. A judge in Delaware ordered Tyson to complete its buyout
of IBP after their proposed combination collapse. Tyson, like
Dynegy, had said it wasn't fully informed about IBP's financial
problems when it negotiated to acquire the beef producer.

     Dynegy said today it plans to take over Enron's Northern
Natural Gas Co. pipeline unit next month. Dynegy said it's
entitled to the pipeline under the terms of its Nov. 9 merger
agreement that gave it $1.5 billion in preferred stock in Northern
Natural Gas.

     Enron could sue as part of the bankruptcy case to stop Dynegy
from walking away from the buyout and claiming ownership to the
pipeline.

     Enron shares fell 10 cents to 26 cents. They have lost 99
percent of their value in the last seven weeks.

                           Complications

     Any Chapter 11 cases would be ``inordinately complicated,''
said Lynn LoPucki, a law professor at the University of California
at Los Angeles.

     The largest bankruptcy on record is Texaco's $35.9 billion
filing in 1987. Enron lists $61 billion in assets.

     Other big companies, like W.R. Grace & Co. and SGL Carbon
Inc., used bankruptcy filings to manage lawsuits, said Ken
Eckstein, a New York attorney who handles bankruptcy litigation.

     W.R. Grace, a financially healthy chemical maker, filed for
Chapter 11 protection in April to cope with asbestos-related
lawsuits. SGL Carbon is the U.S. unit of a German company with a
market value of more than $1.2 billion that makes products used in
steel production. SGL filed bankruptcy papers in 1999 to dispose
of customers' suits over price-fixing claims.

     What sets Enron apart are the questions about its financial
viability, Eckstein said. He represented customers suing SGL as
part of the bankruptcy case.

     ``Here, you have a fundamentally broken company,'' Eckstein
said. ``It may never emerge from bankruptcy.''

     That makes it tougher to gauge how much other creditors
might recover, he said.

                    `Makes Me Mad'

     Enron investors aren't optimistic about the future of the
company's shares.

     ``I took at least a 60 percent hit on them,'' said Jim
Anders, a Columbia, South Carolina, lawyer who has sold shares.
``It really makes me mad. I'd like to get my hands on some of
those executives who were doing the insider deals. That really
shook people's confidence in the company.''

     Enron's fall was accelerated by questions about some
partnerships the company used to move assets and debt off the
company's books. Many investors had complained Enron's financial
reports hid the significance of the partnerships.

     Enron's former Chief Financial Officer Andrew Fastow led some
of the partnerships and earned more than $30 million through their
dealings with Enron, the company disclosed. Fastow and other
executives later were fired over their connection to the
partnerships.

     Anders acknowledged that bankruptcy law puts shareholders and
litigants at the back of the repayment line.

     ``I know we've had it and aren't going to get squat back,''
Anders said. ``The company led us to believe Enron was as solid as
GE or one of the big banks. Now the bank is busted.''


Chairman Says Dynegy's Right to Enron Pipeline Indisputable
2001-11-30 16:21 (New York)

Chairman Says Dynegy's Right to Enron Pipeline Indisputable

     Houston, Nov. 30, (Bloomberg) -- Enron Corp. negotiated an
agreement that gives Dynegy Inc. the right to take over the
Northern Natural Gas Co. pipeline, and arguments to the contrary
are ``irresponsible'' and ``disingenuous,'' Dynegy Inc. Chairman
Chuck Watson said.

     On Nov. 9, Dynegy announced it would buy Enron in a
transaction valued at about $23 billion in stock and assumed debt.
That buyout collapsed Wednesday after Enron failed to get
financing to run daily operations, its stock price plunged and
credit rating companies lowered its debt below junk, triggering
$3.9 billion in debt payments.

     As part of the buyout, ChevronTexaco Corp., owner of 26
percent of Dynegy, gave Enron $1.5 billion in return for the right
to take over the 16,500-mile line even if the merger collapsed,
Watson said. Watson said someone is telling reporters that Enron
might challenge the takeover of the pipeline. Enron doesn't have a
case, Watson said.

     ``ChevronTexaco is not going to give Dynegy ($1.5 billion)
which they know Dynegy is going to give to Enron -- a company that
has lost $90 billion in net worth -- without a pretty damn good
assurance that Dynegy can get the pipeline or the money back,''
Watson said.

     Enron said it's reviewing options for Northern Natural Gas,
which analysts estimate is worth $2.7 billion. Enron likely will
go to court to argue that Dynegy didn't have the right to end the
merger, so it shouldn't get the pipeline, New York bankruptcy
lawyer Robert Christmas said. Enron needs collateral for loans to
stay in business.

     ``This whole thing is going to be in the courts, regardless
of whether Dynegy wants this asset,'' said Kathleen Vuchetich, who
helps manage $1.4 billion in assets, 4.2 percent of them Dynegy
shares, in the Strong American Utilities fund.

     Dynegy has notified Enron by letter that it plans to go
forward, and he plans to take possession by Dec. 19, Watson said.
Enron has the right to buy back the pipelines if it gives Dynegy
$1.5 billion plus interest in the next six months, he said.

     ``If the banks want to keep the pipe because they need
collateral to loan Enron money, then do it,'' Watson said. ``But
don't go out in the press and make it look like a big fight. Tell
me what you want to do.''

     Watson said he would prefer to keep the pipeline system
rather than get the $1.5 billion back.

     Enron has suffered from a crisis of credibility, integrity
and leadership for months. ``This is not helping,'' he said.

     Dynegy shares fell $3.30 to $30.35. Enron shares fell 10
cents to 26 cents.


Williams Has Withdrawn Pipeline Capacity From Enron (Update1)
2001-11-30 16:54 (New York)

Williams Has Withdrawn Pipeline Capacity From Enron (Update1)

     (Updates with closing share prices in fifth paragraph.)

     Tulsa, Oklahoma, Nov. 30 (Bloomberg) -- Williams Cos., the
second-biggest U.S. natural-gas pipeline owner, won't let cash-
strapped Enron Corp. use its lines because of credit concerns,
Williams spokesman Jim Gipson said.

     Other gas shippers have taken Enron's share of capacity on
Williams's 27,000-mile network, Gipson said. He said he hadn't
heard of interruptions of supplies to customers.

     Williams competes with Houston-based Enron in energy trading.
The Tulsa, Oklahoma-based company continues limited business with
Enron to reduce the amount of money owed by Enron to Williams, he
said.

     Enron's potential debt to Williams is less than $100 million,
Williams said yesterday. Williams negotiated with Enron, the
biggest energy trader, for several weeks on reducing that amount,
Gipson said.

     Shares of Williams fell 28 cents to $26.72. Enron shares fell
10 cents to 26 cents. They fell 85 percent Wednesday after Dynegy
Inc. abandoned a takeover offer for Enron after Standard & Poor's
Corp. cut Enron's debt rating to junk status.

     Williams's third-quarter net income rose 83 percent to
$221.3 million as trading profit more than doubled.

     El Paso Corp. is the biggest U.S. pipeline company.


New Jersey Has Limited Exposure to Enron Decline, Treasury Says
2001-11-30 17:06 (New York)

New Jersey Has Limited Exposure to Enron Decline, Treasury Says

     Trenton, New Jersey, Nov. 30 (Bloomberg) -- The New Jersey
Pension Fund, which covers 665,750 state and local government
workers and retirees, holds 2.65 million shares of collapsed
energy-trader Enron Corp., a fraction of the state's total
investment portfolio, the Treasury Department said.

     ``The state has $70 billion in investments,'' said Francis
Rapa, spokesman for New Jersey's treasury. The state paid an
average of $23 a share for its Enron stake between June 1994 and
August 2001, which translates into an investment of about $61
million in total. Enron shares fell 10 cents to 26 cents today.

     ``That investment represents less than 1/10 of 1 percent of
our investment portfolio,'' Rapa said. The state holds no Enron
bonds, he said.

     Rapa said it's too early to tell if the state or localities
within the state would have to increase their pension
contributions because of the decline in Enron shares but said
it's ``highly unlikely'' because of the size of the investment.


Wall Street Firms, Pension Funds Face Enron Losses (Update6)
2001-11-30 17:07 (New York)

Wall Street Firms, Pension Funds Face Enron Losses (Update6)

     (Adds Aegon exposure in ninth paragraph.)

     New York, Nov. 30 (Bloomberg) -- Wall Street financial firms,
banks in Europe and Asia, and pension funds from California to New
York stand to lose billions of dollars from the collapse of energy
trader Enron Corp.

     ``This is having a ripple effect across the world,'' said
Robert Penaloza, a fund manager at Aberdeen Asset Management Asia
in Singapore.

      Analysts estimate companies that lent money to Enron -- from
ABN Amro Holding NV, the largest Dutch bank, to National Australia
Bank Ltd. -- may lose more than $5 billion. Lenders,  trying to
reassure clients and investors by disclosing how much they have at
stake have already revealed $3 billion in losses. Investment
bankers such as Citigroup Inc. and J.P. Morgan Chase & Co. are
working to line up financing for Enron to operate under bankruptcy
protection.

     The Houston company's demise is also a blow to the mutual and
pension funds that invested in it, tripling the stock price in
1999 and 2000. The shares, which started this year at more than
$83.13, fell 6 cents to 30 cents today. Enron had $15 billion of
debt and less than $2 billion of cash as of last week.

     Bear Stearns Cos., the sixth-biggest U.S. securities firm by
capital, said its exposure to Enron is $69 million. Energy
companies, including Duke Energy Corp. and Williams Cos., and
banks such as J.P. Morgan Chase and Abbey National Plc said they
are on the hook for a total of $1.4 billion.

     ABN Amro said it may set aside 110 million euros ($97.5
million) to cover its loans to Enron. Britain's Abbey National
said it's owed almost $135 million. National Australia and other
Australian lenders said exposure totals about $350 million.
France's Credit Lyonnais SA said it has $250 million in loans
outstanding.

                      ING to J.P. Morgan

     ING Groep NV, the biggest Dutch financial-services company,
said it holds about $195 million of Enron unsecured loans and
bonds. Canadian Imperial Bank of Commerce, the country's third-
biggest bank, said Enron owes it $215 million, more than half in
unsecured loans, letters of credit and derivatives.

     Almost two dozen electricity and natural gas companies said
Enron owed them about $700 million as of Wednesday, when Dynegy
Inc. abandoned a plan to buy Enron, depriving it of the cash
needed to avoid insolvency.

     John Hancock Financial Services Inc., XL Capital Ltd. and
other insurers may absorb total losses of more than $3 billion
from the collapse, analysts said. Chubb Corp., the sixth-biggest
U.S. business insurer, said its pretax exposure is about $220
million. Aegon NV, the No. 2 Dutch insurer, said it is owed about
$300 million in loans.

     ABN Amro is one of the lenders behind Enron's $3 billion
Indian power plant. Enron owns 65 percent of the Dabhol Power Co.
project outside of Mumbai, the city formerly known as Bombay. The
plant has been hampered by cost over-runs, penalty claims for
undelivered power, and conflicts with its only client, the
Maharashtra State Electricity Board.

     ``Should there be a need to provide (for a loss), we will do
so in the fourth quarter of this year,'' said ABN Amro spokesman
Martin Winn.

                     Australia to Germany

     National Australia said it has A$200 million ($104 million)
in secured and unsecured exposure. ``We had already factored in
provisions for this kind of event, and it is consistent with our
bad debt outlook for this year,'' said Majella Allen, a
spokeswoman.

     Australia & New Zealand Banking Group Ltd., the fourth-
largest Australian bank, said its direct exposure is $69 million
and it has a further $51 million of indirect exposure. The bank
said it will more aside for bad loans this fiscal year.

     ``Their exposures are a little surprising, but then again
Enron is such a huge organization and spans the globe so it deals
with syndicates of banks for its facilities,'' said Bill
Chatterton, head of equities at ABN Amro Morgans Ltd., the 50
percent-owned private client arm of ABN Amro Australia Ltd.

     In Germany, Dresdner Bank AG, which is owned by Allianz AG,
said its exposure is less than $100 million, while HVB Group,
Germany's No. 2 bank, has about $100 million. Deutsche Bank AG
said its losses may be in the ``double-digit'' millions of
dollars. Commerzbank AG said their exposure amounts to ``double-
digit'' millions of euros.

     U.S. banks have as much as $2.6 billion of exposure, said
Judah Kraushaar, bank analyst at Merrill Lynch & Co. For Citigroup
the biggest U.S. financial services company, it may have as much
as $1 billion.

     J.P. Morgan Chase said it has $500 million of unsecured
exposure to the energy trader, and $400 million of loans with
pipelines as collateral.

     `We lost money,'' said John Waterman, chief investment
officer at Rittenhouse Financial Services Inc., which sold all its
Enron shares at the end of October. ``We're glad we got out when
we did. When we started selling it wasn't clear at all that things
would unravel in the way they did.''

    The California Public Employees' Retirement System, or
Calpers, the biggest U.S. public pension fund, held 3 million
shares as of Wednesday of this week. The California State Teachers
Retirement Fund owned about 2 million shares. The New York State
Common Retirement System said it lost as much as $60 million.

     Among energy companies that do business with Enron, Duke
Energy and Williams Cos. said they may lose $100 million each if
Enron is unable to pay them back.

     Energen Corp., an oil and natural-gas explorer and gas
distributor, said it has an $18.3 million exposure with the
company, and cut its 2002 earnings by 20 cents to 25 cents a
share.
*T
     Below is a list of some banks and their estimated exposure to
Enron:

U.S. electricity firms                     $700 Million
J.P. Morgan Chase                          $500 Million
Credit Lyonnais                            $250 Million
Canadian Imperial Bank                     $215 Million
ING Groep                                  $195 Million
Abbey National                             $164 Million
Australia & New Zealand Banking            $120 Million
National Australia Bank                    $104 Million
Dresdner Bank                    Less Than $100 Million
ABN Amro                                   $97.5 Million
Deutsche Bank                    Less Than $90 Million
Bear Stearns                               $69 Million Commerzbank
Less Than $45 Million
HVB Group                                  $100 Million
New York State Common Retirement Fund      $50-$60 Million
Chubb                                      $220 Million
Energen                                    20-25 Cents/Shr
New York State Common Retirement Fund      $50-$60 Million
Chubb                                      $220 Million
Aegon                                      $300 Million
Energen                                    20-25 Cents/Shr
*T


S&P Says Credit Derivative Exposure to Enron Totals $6.3 Bln
2001-11-30 17:18 (New York)



     New York, Nov. 30 (Bloomberg) -- Standard & Poor's said
credit derivative transactions in which Enron Corp. may total
$6.3 billion.

     The credit rating agency said it has reviewed credit
derivative transactions in which Enron appears and found that
there are $3.3 billion in credit default swaps directly on Enron
debt. Another $3 billion of credit swaps exist in which a
subsidiary of Enron is a  counterparty, but the credit default
swaps is not on Enron debt, according to Nik Kahkee, director of
S&P's structured finance derivatives group.

     Enron has more than $15 billion in debt and preferred stock
and about $4 billion in bank loans, of which $3 billion is
unsecured. Swaps, options, and derivative risk aren't included in
those figures. Banks and Wall Street dealers hold unsecured Enron
loans and some sold credit default swaps, which provide insurance
to debt holders in case Enron defaults.


Enron's Fall to Spark Legal Wrangles Over Derivatives (Update1)
2001-11-30 11:24 (New York)

Enron's Fall to Spark Legal Wrangles Over Derivatives (Update1)

     (Rewrites 2nd paragraph.)

     London, Nov. 30 (Bloomberg) -- Enron Corp.'s plunge toward
bankruptcy may spark legal wrangles over how to unravel the web of
derivatives contracts tied to the energy company.

     Enron is set to file for protection in the biggest Chapter 11
reorganization ever. That's likely to mean the energy trader can't
pay on derivatives it sold as insurance against default by other
borrowers, as well as defaulting on its own debts and triggering
similar contracts bought by its creditors.

     ``If I traded with Joe Bloggs down the road, and Enron owed
him a lot of money and he couldn't get it so he went into
bankruptcy, then he wouldn't fulfill his obligations under my
contract,'' said Brian Senior, head of trading at Innogy Holdings
Plc, the U.K.'s top electricity supplier. ``I don't think the
major risk is market liquidity, I think it's the domino effect.''

     Enron used derivatives -- financial instruments such as
futures and options whose value is based on other assets -- to
insure against price swings or take bets on a price's direction.
The Houston-based company had revenue of $1.9 billion from
derivatives trading last year, more than double the $765 million
in 1999, making it one of the largest traders, according to Swaps
Monitor Publications Inc.

     By comparison, Williams Cos., the No. 2 U.S. natural-gas
pipeline owner, had revenue of $1.29 billion on derivatives
trading in 2000.

     Paul Spraos, president of Swaps Monitor, a research company
that compiles trading figures, said Enron only posts derivatives
statistics once a year so there are no figures for 2001.

     Dynegy Inc. abandoned its planned merger with Enron on
Wednesday, leaving it with more than $15 billion of debt and the
possibility of bankruptcy. As well as oil and gas futures, Enron
trades derivatives based on such things as weather and information-
transmission capacity, known as bandwidth.

                        Banned From Trading

     Spraos estimates that as of Sept. 30, Enron owed $18.7
billion on derivatives trades that went sour, though he said that
doesn't take into account the collateral Enron probably posted to
back up the trades.

     The European Energy Exchange today banned Enron from trading
its products, while Australian regulators barred the company's
finance unit, Enron Australia Pty, from trading electricity
futures because its funding wasn't assured.

     U.S. Senate and House committees will investigate Enron's
decline and consider new regulations for electricity and natural-
gas trading. The Securities and Exchange Commission is also
examining the company.

     Enron had $201 billion worth of derivatives on oil, gas and
electricity at the end of last year, Swaps Monitor has reported.
That's measuring the notional amount, the face value of the
securities on which the derivatives are based.

                         `Quantifying It'

     ``Everyone will be looking at their exposure, whether they've
got collateral, and quantifying it,'' said Robert G. Pickel, chief
executive officer of the International Swaps and Derivatives
Association.

     ISDA, a New York-based trade association representing more
than 550 companies that trade derivatives, designed the legal
contracts typically used in derivatives transactions. Pickel said
those contracts are designed to address such situations.

     ``There are two potential issues relating to ISDA
documentation, as a result of the situation regarding Enron,''
Pickel said. The first involves companies that have entered
derivatives trades with Enron using ISDA's standard contract,
known as the Master Agreement. The second concerns banks that have
provided credit protection on Enron in the form of a credit-
default swap, also using ISDA documents.

     Credit-default swaps work like insurance on a company's bonds
or loans. They pay out if there's a bankruptcy, default, debt
restructuring or similar occurrence, known as a credit event.

     ``If there's a bankruptcy filing there's no question it would
be a credit event,'' Pickel said.

                           `Can't Tell'

     Enron's U.K. units are in administration, which has triggered
what lawyers define as a credit event, said Simon Firth, head of
the credit derivatives practice at Linklaters & Alliance, which is
acting for PriceWaterhouseCoopers, the accountant for Enron's
European arm.

     ``The documents are fairly robust, and we've been through
issues before,'' Firth said. He said that while ``each time the
documentation gets strengthened, you can't tell what happens until
you look at the individual cases.''

     Enron owes almost two dozen energy companies about $700
million. J.P. Morgan, the bank that advised Enron in the failed
merger with Dynegy, said it was owed $500 million for unsecured
loans. Canadian Imperial Bank of Commerce was owed $215 million in
loans and credit derivatives.

     In Europe, ABN Amro may set aside $97.5 million to cover its
Enron exposure. The energy company owes Abbey National Plc $164
million, and Dresdner Bank AG said its exposure is about $100
million.

     ``This one has left every head shaking, and people are
wondering how to organize by class of creditor and how to hire
counsel,'' said Glenn Reynolds, an analyst at CreditSights Inc. in
New York. ``Lawyers are high-fiving.''