Distinction between ...
<p>
Enron, who is accused (wrongfully?) of fraud...
...and Andersen who is accused (wrongfully?) of failing to uncover ENE's alleged fraud...
To me, the only house of cards are these people who seem to think they can prove ENE fraud.
Further, DYN was shown the books. Their pullout was not (apparently) based on concealment. If anything it was an orchestrated scheme to gain more market share and assets at ENE's expense or else was based on ignorance and that, as we all know, is no excuse in the law.
I'm betting ENE raises or emerges with some shareholder value because the big banks can't allow it to fritter away the loans. The only chance of getting repaid is to get ENE back online and moving. Why would the banks invest so much DIP dough unless they too think it has a darn good chance of succeeding...
If these banks think so, it is a small leap of faith for a small fish like me to ride their coattails...
From WSJ 12/5:
December 5, 2001
Potential Backers of Enron Wager
Firm's Former Clients Will Return
By JATHON SAPSFORD and ALEXEI BARRIONUEVO
Staff Reporters of THE WALL STREET JOURNAL
As Enron Corp. inches closer to securing fresh capital for its faltering trading
operations, potential partners are lining up to gamble that Enron's clients will bring
their business back to the troubled energy trader.
It is far from a sure bet.
Enron's flagship energy-trading business has largely ground to a halt in recent days,
with virtually the only trades coming as dozens of Enron clients unwind their
positions with the company. Energy analysts have begun to question whether any
new deal can restore confidence in a company whose future now rests largely in
U.S. bankruptcy court. Enron filed Sunday for Chapter 11 bankruptcy-court
protection, which temporarily shields the company from creditors to provide it time
to reorganize.
"For Enron to be viable they'll need more than an infusion of cash," said Art
Gelber, a principal at Gelber & Associates, a Houston consulting and
asset-management company. "They will need a significant presence to stand beside
them, a white knight of impeccable stature to not only restore confidence but
reverse the ill will that has been created." Mr. Gelber said he expects the trading
industry would respond better if Enron partnered with a major energy firm such as
Exxon Mobil Corp. or BP PLC.
The current plan to revitalize Enron's energy trading operation involves setting up a
new venture that includes Enron traders and infrastructure -- including the
innovative EnronOnline electronic-trading system -- along with the capital and
balance sheet of the new partner, most likely a large money-center bank. A handful
of big banks have expressed interest in the business, including J.P. Morgan Chase
& Co. and UBS AG, say people familiar with the matter. Goldman Sachs Group
and Citigroup Inc. also have considered the deal, but have recently backed off,
these people said.
J.P. Morgan Chase, UBS and Goldman Sachs declined to comment on the
negotiations to find Enron a partner. Citigroup has said that it isn't interested in the
deal. Enron on Monday secured $1.5 billion in debtor-in-possession financing from
J.P. Morgan Chase and Citigroup. Those funds, which are separate from the
money being sought to back the trading operation, will be used to fund a broad
restructuring effort by the Houston company.
...
For the banking industry, the move to shore up Enron's trading operations would
help support the value of billions of dollars in outstanding Enron loans owed to
banks. The thinking is that despite its woes, Enron remains a potent force in the
energy-trading world and could well be revived if clients regain the confidence
needed to continue trading with the company." |
