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Gold/Mining/Energy : Enron - Natural Gas Industry -- Ignore unavailable to you. Want to Upgrade?

To: CJ who wrote (1160)	12/7/2001 12:05:22 PM
From: jjs_ynot	Read Replies (2) \| Respond to of 1433

The pecking order in a reorganization follows a similar structure with Bondholders often/usually becoming the new equity holders. Employees and the Government also fall in the pecking order and via the 401k filing and Government review they appear to be trying to get into the payment chain. Additionally there are the liabilities in all of the commodity swaps that Enron executed or brokered as well as the liability of Enron's inability to deliver on contracts such as for electricity in Europe. Also, see this news story: marketwatch.com This will reduce the chances that any stock or bondholder in the parent can get to the assets in the subsidiary companies as the individually file for Ch. 11 and reduce the parent's asset position.

To: CJ who wrote (1160)	12/7/2001 1:50:32 PM
From: Robert Graham	Read Replies (1) \| Respond to of 1433

All the Chapter 11 protection facilitates is time for the company to consider other options that may indeed include bankruptcy. A Chapter 11 reorganization effort is used to give the company time to recreate a viable business plan and manage their financing. This can include the company determining how best to sell off its operating units and other significant assets if that is the route they choose to go. Or just give them time to determine if they will indeed file for bankruptcy, the liquidation of the company, which may turn out to be the end result of this process facilitated by their current protection. Identification of their debtors, the type of debtor, and the amounted owed would be part of this process. Determination of the impact of current and future lawsuits would also be a part of this. Enron likely does not know right now which option is the most viable path to take, that which would be in the best interest of the company and its shareholders. I am sure they are investigating their options right now. However, I do believe that Enron will eventually file for bankruptcy. This is where the company will be liquidated and cease to exist. This belief, as shared by others, is where my comments come from. In this regard, my purpose was to detail the pecking order of creditors in an attempt to answer the question about the likelihood of the common stock holder getting anything out if this in the end. I do thank you for pointing out the difference between the different types of protection the court system affords a business. I sometimes find myself mixing up the numbers myself. :-) Any comments? Bob Graham