These jokers are too funny....they are going to sue Dynegy for wanting to back out of a merger with a scam!! LOL
Dynegy charges Enron has only itself to blame
By BILL MURPHY
Copyright 2002 Houston Chronicle
Enron has only itself to blame for going bankrupt after Dynegy called off a proposed merger in December, Dynegy's lawyer said Monday.
Enron is suing for $10 billion, saying Dynegy's failure to live up to the deal, signed Nov. 9, caused it to go bankrupt.
"Enron planted the seeds of its death spiral years before it turned to Dynegy seeking a bailout," said Dynegy's response, filed Monday in New York bankruptcy court.
At a news conference in Houston, Daryl Bristow, Dynegy's lawyer, said the deal specifically allowed Dynegy to back out if it learned that key information on which it was based was incorrect.
After about 10 days of research, Bristow said, Dynegy learned Enron had been concealing debt in off-the-book accounts and had been grossly misleading about profits and liquidity. When it told Enron it would back out, he said Enron responded by cutting its asking price in half.
Dynegy called off the deal Nov. 28 after determining there was no way to save Enron, Bristow said.
"Everyone knew there had been a major and a disastrous financial change," Bristow said. "Enron brought this on its own head. Dynegy only tried to salvage the situation."
Bristow repeatedly cited the report of an Enron internal investigation, released Saturday, that assailed the company's executives, auditors, lawyers and board members for letting improperly created partnerships inflate company profits, conceal its debt and wrongfully enrich several insiders.
During negotiations, Enron informed Dynegy its core energy-trading business was sound, but Bristow said Enron had suffered a massive cash drain in the week after the merger was announced.
Enron paid more than $1 billion to cover margin calls -- a demand that it repay money borrowed to buy stocks -- in its trading unit.
Bristow said Dynegy will argue that the Enron suit should be transferred from the New York City court to federal district court in Houston.
Dynegy alleges Enron engaged in fraud, but it did not file a countersuit because Enron has no assets, Bristow said.
Martin Bienenstock, Enron's lawyer, said, "If they are afraid to assert the fraud claim (in a countersuit), you have to wonder how good their defense is."
He said he has not read Dynegy's court filing and could not discuss it in detail.
chron.com
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