Congressional Panels to Probe Enron's Accounting, Trading
Bloomberg, 11/29/01

Nymex Tells Members Enron Trades Must Be Approved (Update2)
Bloomberg, 11/29/01

Dynegy CEO Says He'd Rather Have Enron Pipeline Than $1.5 Bln
Bloomberg, 11/29/01

Italian Banks Fall on Concern About Enron Exposure (Update2)
Bloomberg, 11/29/01

Argentine Analysts, Perez Companc Comment on TGS After Enron
Bloomberg, 11/29/01

Duke, Williams Among Companies Facing Enron Losses (Update2)
Bloomberg, 11/29/01

Enron's Problems Aren't Industry Problems, Felsinger Tells CNBC
Bloomberg, 11/29/01

California's Senator Dunn Comments on Possible Enron Bankruptcy
Bloomberg, 11/29/01

CIBC Says It Is Owed $215 Million by Cash-Strapped Trader Enron
Bloomberg, 11/29/01

Intelligent Asset' Author Bernstein Comments on 401(k) Plans
Bloomberg, 11/29/01

Enron Corp. Has Fourth-Busiest Day for a U.S. Stock: Table
Bloomberg, 11/29/01

Enron Corp. Is Poised to File Largest-Ever Bankruptcy (Update3)
Bloomberg, 11/29/01




Congressional Panels to Probe Enron's Accounting, Trading
2001-11-29 15:59 (New York)

Congressional Panels to Probe Enron's Accounting, Trading

     Washington, Nov. 29 (Bloomberg) -- Senate and House
committees will investigate the collapse of Enron Corp and
consider new regulations for electricity and natural-gas trading.

     Enron, the largest energy trader, is expected to file for
Chapter 11 protection after the collapse of a planned merger with
Dynegy Inc.

     The House Energy Committee will hold hearings as early as
next month to scrutinize the accounting practices and earnings
reports of Enron, said Ken Johnson, a panel spokesman. The Senate
Energy Committee may begin looking in January at more federal
oversight of trading.

     ``When you have such a spectacular event as the collapse of a
company that controlled 50 percent of the natural-gas and
electricity trading, we're going to have some thoughts on that,''
said Bill Wicker, a spokesman for the Senate Energy Committee.

     Enron's importance in energy trading and questions about its
accounting practices require an investigation, said Senate
Majority Leader Tom Daschle of South Dakota.

     ``I don't know that anybody knows yet just how this happened
and how it happened so quickly,'' he told reporters on Capitol
Hill. ``It raises some very serious questions.''

     The unraveling of Enron, which is saddled with $15 billion in
publicly held debt, began in October. Shareholders' equity was
reduced by $1.2 billion because of the way the company accounted
for outside partnerships it created. The announcement prompted
lawsuits and an investigation by the U.S. Securities and Exchange
Commission.



Nymex Tells Members Enron Trades Must Be Approved (Update2)
2001-11-29 15:16 (New York)

Nymex Tells Members Enron Trades Must Be Approved (Update2)

     (Adds analyst quote in fourth paragraph, Enron share price in
sixth paragraph.)

     New York, Nov. 29 (Bloomberg) -- New York Mercantile Exchange
President J. Robert Collins told brokers on the largest energy
exchange's trading floor that they could not accept orders from
Enron Corp. unless they receive written authorization from an
exchange clearing member.

     The order is effective immediately and will ``remain in
effect until further notice from the exchange,'' according to a
fax Collins sent today to member firms. A copy of the fax was
obtained by Bloomberg News. Exchange officials did not immediately
return phone calls.

     Enron's worsening financial condition has made many clearing
members, which back trades on the exchange for a fee, wary of
taking on additional business from Enron. The Nymex order aims to
alert independent floor brokers that clearing members who once
freely accepted Enron trades may no longer be so willing, analysts
said.

     Nymex is ``reminding everyone that it's not business as usual
when it comes to Enron,'' said Tim Evans, senior energy analyst at
IFR Pegasus in New York, a unit of Thomson Corp. ``For Enron, it
mean slower order execution -- as if they don't have enough
handicaps already.''

     Enron may be forced to file for bankruptcy to liquidate
assets to pay off some of its $15 billion in publicly held debt,
analyst said. Enron shares fell 24 cents to 37 cents in afternoon
trading. That's down from about $80 at the beginning of this year.

                       Covering Enron Debts

     Under exchange rules, clearing members would be forced to
cover Enron's obligations if the firm defaulted on its positions.

     Many energy traders, including rivals Mirant Corp. and Aquila
Inc., already have reduced the number of trades they're doing with
Enron in the over-the-counter markets, which involve direct trades
between companies that don't carry the financial guarantees of
regulated commodity exchanges.

     The New York exchange yesterday said it will raise margins on
its natural gas and crude oil futures contracts at the close of
trading today. Margins are deposits traders must make with the
exchange when buying or selling futures contracts to ensure
obligations will be met.

     While the exchange gave no reason for the increase, the
decision followed a day of wide changes in natural gas prices. The
swings began after Dynegy Inc. abandoned plans to purchase Enron,
once the biggest gas trader.


Dynegy CEO Says He'd Rather Have Enron Pipeline Than $1.5 Bln
2001-11-29 14:56 (New York)

Dynegy CEO Says He'd Rather Have Enron Pipeline Than $1.5 Bln

     Houston, Nov. 29, (Bloomberg) -- Dynegy Inc. Chairman Chuck
Watson said he would rather take over an Enron pipeline than get
back the $1.5 billion investment that entitles Dynegy to the line.

     Watson said Dynegy expects to take over operation of the
16,500-mile Northern Natural pipeline system by Dec. 19.
ChevronTexaco Corp., which owns 26 percent of Dynegy, gave Enron
$1.5 billion to help the cash-strapped company stay in business.

    The investment, part of Dynegy's plan to buy Enron, was backed
by the Northern Natural system. Dynegy backed out of the merger
yesterday, and said it would exercise its right to take over the
line.

     Watson said he hopes that Northern Natural employees will
continue to operate the pipeline after Dynegy takes ownership.


Italian Banks Fall on Concern About Enron Exposure (Update2)
2001-11-29 14:20 (New York)

Italian Banks Fall on Concern About Enron Exposure (Update2)

     (Closes shares in second paragraph; adds analyst comment from
eighth, estimates of exposure in 10th.)

     Milan, Nov. 29 (Bloomberg) -- IntesaBci SpA and UniCredito
Italiano SpA shares fell on investors' concern that Italian banks
may not recoup money lent to units of Enron Corp. if the largest
U.S. energy trader goes bankrupt.

     IntesaBci, Italy's biggest bank, fell 2.4 percent to 2.75
euros while UniCredito, the No. 2 lender, lost 1.9 percent to 4.24
euros. Banca Nazionale del Lavoro SpA, the nation's sixth-largest
bank, dropped 1.4 percent to 2.55.

     ``The theme of the day is to sell banks because they are
exposed to Enron,'' said Daniele Savare, who helps manage 120
million euros ($106 million) at Bipielle Asset Management. ``In
some cases, the reaction may be a bit overdone.''

     Dynegy Inc. yesterday abandoned its proposed merger with
Enron, leaving the Houston-based company burdened with debt and
the likelihood of insolvency. Some analysts said bankruptcy is
inevitable and may come as early as today. A bankruptcy filing by
Enron, which reported more than $61 billion in assets, would be
the biggest Chapter 11 reorganization in history.

     ``I've heard Intesa is the most exposed, to the tune of
between 400 billion and 500 billion lire ($183 million-$229
million),'' said Gianluca Ferrari, who helps manage 260 million
euros in stocks at Banca Valsabbina in Brescia.

     Gabrio Gelmi, an Intesa spokesman, confirmed Enron is a
client of the bank, though he declined to comment on the size of
its exposure. Luigi Ferrari, a spokesman at San Paolo-IMI SpA,
said the exposure of Italy's No. 3 bank was ``limited and under
control.'' He declined to give an amount.

                        Diversified

     Officials at UniCredito, Banca Nazionale del Lavoro and Banca
di Roma SpA were not immediately available for comment.

     ``It doesn't make sense to attribute the declines today
purely to the Enron exposure,'' said Luca Comi, head of research
at Eptasim. ``If it's just one company that's in trouble, banks
are sufficiently diversified that the impact is very limited.''

     Comi said San Paolo had told him Enron had borrowed 80
million euros as part of a 120 million-euro credit line. Of the
loan, 50 million euros is guaranteed by Enron assets, the analyst
said.

     San Paolo shares fell 1 percent to 12.41 euros.
     Other banks have higher exposure to Enron, such as 168
million euros for Intesa, Banca Nazionale del Lavoro's 142 million
euros and 122 million euros at UniCredito, investors said, citing
analysts' reports.


Argentine Analysts, Perez Companc Comment on TGS After Enron
2001-11-29 15:55 (New York)


     Buenos Aires, Nov. 29 (Bloomberg) -- Eugenia Benitez, an
energy analyst at Allaria Ledesma & Cia, Esteban Marx, an analyst
at Banco Comafi, Gustavo Neffa, an analyst at BBVA Banco Frances
SA and Mario Grandinetti, head of Perez Companc's institutional
relations, comment on the future of gas distributor Transportadora
de Gas del Sur SA.

     Enron Corp., which together with Perez Companc owns 70
percent of TGS, may file for bankruptcy protection in the biggest
bankruptcy reorganization in history. The move may force the
largest U.S. energy trader to liquidate assets to pay some of its
$15 billion in publicly held debt.

Eugenia Benitez:
     ``The natural buyer is Perez Companc. There's definitely the
possibility of reaching a deal that would make Perez the only
controlling shareholder of TGS.

     ``We would need to see how much TGS debt Perez has. Its debt
profile is relevant.

     ``The acquisition would be another step in Perez' strategy of
integrating all its operations in one holding.''

Esteban Marx:
     ``Perez is the natural candidate, but I'm not sure now is the
right time for Perez to pour money into TGS, unless it can get it
really cheap.''

Gustavo Neffa:
     ``The only company that could make the sort of investment to
by the TGS stake is Perez Companc, but its a huge investment given
that TGS' assets are worth about $1 billion.

     ``But it would definitely be the likely buyer.''

Grandinetti:
     ``We're not permitted to buy Enron's stake in TGS because of
 rules that prevent us having a majority stake.

     ``If the law is modified, then yes we would consider it. But
 there are also economic issues to consider.''


Duke, Williams Among Companies Facing Enron Losses (Update2)
2001-11-29 16:23 (New York)

Duke, Williams Among Companies Facing Enron Losses (Update2)

     (Updates total in second paragraph, adds closing stock price
in ninth paragraph and analyst comment in paragraph 12th and 20th
paragraphs.)

     Houston, Nov. 29 (Bloomberg) -- Duke Energy Corp., J.P.
Morgan Chase & Co., Williams Cos. and a dozen other companies
together may lose more than $1.1 billion from the collapse of
Enron Corp.

     Electricity and natural gas companies said Enron owed them
about $660 million as of yesterday, when Dynegy Inc. abandoned a
merger that deprived Enron of cash it needs to avoid insolvency.
J.P. Morgan, the bank that was Enron's adviser on the failed
buyout, said it is owed $500 million for unsecured loans.

     Losses may grow as companies tally their exposure from
transactions with Houston-based Enron, the largest energy trader,
with revenue last year of $100 billion. Enron also manages power
supply for companies such as J.C. Penney Co. and Eli Lilly & Co.,
and owns pipelines and a fiber-optic telecommunications network.

     Some companies ``have positions that they're not owning up
to,'' said Peter Fusaro, president of Global Change Associates
Inc., an energy research firm. ``Enron had long-term deals on the
books, and these may take years to sort out. How could they not
have big exposure?''

     Enron is poised to file the largest bankruptcy reorganization
in history. The company is saddled with more than $15 billion in
debt and had less than $2 billion in cash as of last week. It must
pay $690 million to lenders by mid-December and is responsible for
another $3.9 billion in debt owed by affiliated partnerships. The
company's credit-rating was downgraded to junk status yesterday.

     ``Considering Enron's size and clout, there are very few
companies in the energy business or electric utility companies
that have not done business with them,'' said Jon Cartwright, a
fixed-income analyst at Raymond & James Associates. ``I don't
believe that everyone could have gotten out of their exposure.''

                         Limited Payments

     Enron said yesterday it will continue payments necessary to
maintain its trading and other core energy businesses, while
suspending all others. It also resumed limited trading on its
EnronOnline Internet market, after shutting down most of
yesterday.

     The New York Mercantile Exchange, the largest energy market,
tightened trading restrictions on Enron in a move that members
said was made to limit the risk from any new business with the
company.

     Shares of Enron fell 25 cents to 36 cents, compared with $70
a year ago.

     If Enron is unable to pay all it owes, Duke and Williams said
they would lose no more than $100 million each. Duke, the largest
U.S. utility owner, didn't stop trading with Enron until
yesterday, and warned that its earnings may be affected.

     ``We are closely monitoring this unfortunate situation to
determine if a provision against earnings is appropriate,''
Richard J. Osborne, Duke's executive vice president and chief risk
officer, said in a statement today

                       `Reassure Investors'

     Energy companies that did business with Enron are trying ``to
reassure investors that they're not going to go belly up as a
result of Enron's demise,'' said Gordon Howald, an analyst at
Credit Lyonnais Securities Inc. ``Investors still need to be
cautious about this industry, because there are a lot of
unanswered questions.''

     Reliant Resources Inc. said it faces $80 million in losses
from transactions with Enron involving electricity and natural gas
sales.

     Dynegy said it faces $75 million in losses, though it plans
to exercise its option under the buyout agreement to take the
Northern Natural Gas system in exchange for a $1.5 billion
investment in Enron. Mirant Corp., an Atlanta-based energy trader,
said it would lose no more than $60 million.

     Aquila Inc., American Electric Power Co. and El Paso Corp.
said each estimated their exposure to Enron at $50 million.

                            More Losses

     Centrica, the dominant U.K. natural-gas supplier, may write
off contracts worth $43 million if Enron fails, the company said
in a statement. Exelon Corp., owner of utilities in Chicago and
Philadelphia, said its exposure is less than $20 million.

     Dominion Resources Inc., a power and gas utility said its
exposure for past sales is $11 million.

     RWE, Europe's fourth-biggest utility owner, said its open
trading positions with Enron are ``much less'' than $8.9 million.
St. Mary Land and Exploration Co., a Denver-based natural-gas
producer, said it has hedged $4.17 million of production with
Enron through 2003. Western Gas Resources Inc. said it faces $2.6
million in possible losses.

     NRG Energy Inc. announced a potential liability of $10
million through its energy trading with Enron, and Plains
Resources Inc. said its exposure through to the end of next year
was about $630,000.

     Companies that did business with Enron ``relied for the most
part on the rating agencies'' to determine if Enron was
financially sound, Credit Lyonnais' Howald said. Enron ``was
investment grade, and they were solidly investment grade for some
time. I don't think you can fault these companies for doing
business with a company that represented 20 percent'' of the
market.

     Some companies, such as Calpine Corp., said they had no
exposure to Enron.

     J.P. Morgan has a $400 million loan secured by Enron's
Transwestern and Northern Natural Gas Pipelines, the bank said.



Enron's Problems Aren't Industry Problems, Felsinger Tells CNBC
2001-11-29 16:33 (New York)


     San Diego, Nov. 29 (Bloomberg) -- Enron Corp.'s problems are
particular to the company and should not reflect on the energy
industry, Sempra Energy Group President Donald Felsinger said in
an interview with financial news network CNBC.

     ``I've really been surprised and impressed in how well the
energy industry has responded with Enron's problems,'' he said.

``The past month the energy players have stepped up and taken over
positions that Enron had, and the energy market today is working
very well.''

     Felsinger said $15 million in business with Enron isn't
``material'' and will not affect Sempra Energy's earnings this
year or next year.


California's Senator Dunn Comments on Possible Enron Bankruptcy
2001-11-29 17:03 (New York)


     Sacramento, California, Nov. 29 (Bloomberg) -- California
State Senator Joseph Dunn, chairman of a committee investigating
possible price manipulation in the state's wholesale power market,
comments on how an Enron Corp. bankruptcy would affect the probe:

     ``If we assume Enron files for bankruptcy, either through
liquidation or reorganization, our ability to deal with the
corporate entity to get documents and access to witnesses will be
overseen by a bankruptcy court, which means we have to jump
through additional hoops and ladders to get the information we may
require.

     ``Substantively, it doesn't affect our investigation at all
because the Senate's investigation is not out to get anybody. We
are tying to get a very thorough understanding of why we got into
the mess we are in and whether any concrete legislative fixes in
the wholesale market need to be taken.

     ``Enron was a critical player in setting up the market that
ultimately gave rise to the market power, which in my view is the
ultimate cause of the energy crisis.

     ``There are some pluses and there are some minuses if we
assume that Enron disappeared from the energy trading market. It
would create a void that would have to be filled by other players
in the wholesale market.

     ``If those other players that fill that void do not currently
posses market power, that's a good thing because the diffusion of
market share, most economists will tell you, is one of the best
ways to eliminate already existing market power.

     ``If Enron goes into reorganization bankruptcy rather than
liquidation, and they are purchased by one of the big players that
currently possesses market power, then we are only going to
complicate the crisis that we currently find ourselves in.''


CIBC Says It Is Owed $215 Million by Cash-Strapped Trader Enron
2001-11-29 17:15 (New York)

CIBC Says It Is Owed $215 Million by Cash-Strapped Trader Enron

     Toronto, Nov. 29 (Bloomberg) -- Canadian Imperial Bank of
Commerce, the country's third-biggest bank, said Enron Corp. owes
it $215 million, more than half in unsecured loans, letters of
credit and derivatives.

     CIBC won't revise its fiscal 2002 forecast on loan-loss
provisions because of Enron's problems, the bank said in a
statement distributed by PR Newswire. CIBC said Monday it expected
loan losses to be about 10 percent higher in the year ending Oct.
31 from C$1.1 billion ($695.8 million) last year
     Toronto-based CIBC said it's owed about $115 million in
unsecured items and $100 million in secured loans by Enron.

     Houston-based Enron, once the biggest energy trader, may face
bankruptcy after Dynegy Inc. withdrew a bid for the
cash-strapped company.

     Enron is poised to file the largest bankruptcy reorganization
in history. The company has more than $15 billion in debt and had
less than $2 billion in cash as of last week.

     Shares of CIBC rose C$1 to C$54.15 in Toronto. It released
the statement after North American markets closed. Enron fell 25
cents to 36 cents.


`Intelligent Asset' Author Bernstein Comments on 401(k) Plans
2001-11-29 17:23 (New York)


     North Bend, Oregon, Nov. 29 (Bloomberg) -- William J.
Bernstein, author of the investment book ``The Intelligent Asset
Allocator,'' comments on the disadvantages of corporate pension
plans that hold company stock and place the responsibility and
risk of managing retirement savings with employees. His comments
follow the collapse of Enron Corp., whose 401(k) plan held 62
percent of assets in the energy trader's common and convertible
preferred stock at the end of 2000 and restricted employees'
ability to sell.

     As of the end of 2000, about $1.8 trillion was invested in
401(k) plans serving 42 million U.S. workers, according to Cerulli
Associates. Investors in 401(k) plans lost money last year for the
first time since they were introduced in 1981 as stocks fell.

     ``Maybe some good will come of'' Enron's collapse in the way
of national pension reform, said Bernstein. ``It's never, ever
prudent to put your company stock in your retirement plan. The
overwhelming majority of plans allow it and a large plurality of
them encourage it. A fairly significant minority of plans have
very large amounts of company stock. You want to diversify your
risks. If your company fails, at least you have a backstop.''

     Bernstein said individual investors ought to consider putting
their retirement savings into a combination of low-cost mutual
funds that track indexes for U.S. stocks and bonds and
international stocks. ``The average person has as much business
managing their own retirement as they do taking out their own
appendix,'' said Bernstein, a neurologist by profession.

     In addition, average 401(k) plan expenses of 3.5 percent of
assets exceed the projected annual returns of 3 percent from
stocks in coming years after adjusting for inflation, meaning
investors are facing zero long-term real gains, Bernstein said.

     Expenses are lower with traditional corporate pension plans,
known as defined benefit plans because they guarantee a certain
level of retirement benefits based on pay and years of service.

     ``The way defined contribution plans are currently set up
there is not adequate controls on expenses. What you're really
getting is an enormous transfer of wealth from plan participants
to the financial services industry. This is an enormous social
experiment that's been foisted upon us and it's going to be a
failure,'' said Bernstein.



Enron Corp. Has Fourth-Busiest Day for a U.S. Stock: Table
2001-11-29 17:17 (New York)

Enron Corp. Has Fourth-Busiest Day for a U.S. Stock: Table


     New York, Nov. 29 (Bloomberg) -- Enron Corp. had the fourth
most-active day for a U.S. stock, with 264.9 million shares
trading, according to preliminary figures from the New York Stock
Exchange.

     Enron fell 25 cents, or 41 percent, to 36 cents a share.
Yesterday, the stock set an all-time volume record after Dynegy
Inc. abandoned a takeover bid, leaving the company that was once
the largest energy trader without enough cash to pay its $15
billion in debt.

     The following is a list of stocks with the 10 highest one-day
trading volumes in U.S. market history, according to data from the
NYSE and the Nasdaq Stock Market.

*T
Stock                 Date                   Volume (in Millions)
Enron Corp.           Nov. 28, 2001          345.7
Intel Corp.           Sept. 22, 2000         308.7
Cisco Systems Inc.    Feb. 7, 2001           281.6
Enron                 Nov. 29, 2001          264.9
Oracle Corp.          March 2, 2001          224.0
Cisco Systems         Jan. 10, 2001          213.0
JDS Uniphase Corp.    July 26, 2000          200.4
Cisco Systems         Oct. 3, 2001           196.5
WorldCom Inc.         Nov. 1, 2000           195.5
Exodus Communications Sept. 25, 2001         193.1
*T


Enron Corp. Is Poised to File Largest-Ever Bankruptcy (Update3)
2001-11-29 17:30 (New York)

Enron Corp. Is Poised to File Largest-Ever Bankruptcy (Update3)

     (Adds investor comment in eighth paragraph.)

     Washington, Nov. 29 (Bloomberg) -- Enron Corp. is poised to
file the largest bankruptcy reorganization in history after Dynegy
Inc. scuttled plans to acquire the energy trader that is saddled
with more than $15 billion in debt.

     Enron, with less than $2 billion in cash as of last week,
must pay $690 million to lenders by mid-December and is
responsible for another $3.9 billion in debt owed by affiliated
partnerships. The company's credit-rating was downgraded to junk
status yesterday.

     Houston-based Enron's collapse was underscored by new
restrictions on its operations. The New York Mercantile Exchange
barred floor members from accepting orders from Enron without
special written authorization, and the company's Internet trading
was reduced from about 30 commodities to just natural gas,
electricity and metals.

     A bankruptcy filing by Enron, which investors said may come
within a matter of days, would top Texaco Inc.'s record $35.9
billion case in 1987. Creditors would be lining up to claim what's
left of the company's more than $61 billion in assets.

     ``It's a black hole,'' said Gary Hindes, managing director of
Deltec Asset Management LLC, which has no investment in Enron.
``Until the forensic accountants can get in there and sort things
out, you just don't know what Enron's worth.''

     Duke Energy Corp., J.P. Morgan Chase & Co., Williams Cos. and
a dozen other companies say they may lose more than $1 billion
combined from Enron's collapse. Electricity and natural gas
companies said Enron owed them almost $600 million as of
yesterday.

                      European Administrator

     In London, PricewaterhouseCoopers was appointed administrator
of Enron's European holding company and some of its operating
companies, a step other companies have taken before filing Chapter
11 papers in the U.S.

     ``If I were a betting man, Enron going into Chapter 11 in the
next week is a bet I'd make,'' said Glen Hilton, who helps manage
$125 million, including Dynegy shares, for Montgomery Asset
Management.

     Enron shares have lost more than $26 billion in market value
in the last seven weeks. They fell 25 cents, or 41 percent, to 36
cents. The shares traded at $54.54 on June 4.

     Enron bonds were bid at 23 cents on the dollar in late
trading, little changed from yesterday, traders said. The debt had
been near full value as recently as last month.

                        Quarterly Dividend

     The company said this morning it was evaluating whether it
will pay a scheduled 12.5-cent quarterly dividend on Dec. 20.

     Enron hired the law firm Weil Gotshal & Manges LLP, which has
the nation's largest bankruptcy practice, and the Blackstone Group
LP investment banking firm. Arthur Newman, head of restructuring
at Blackstone, said his firm was retained and declined to comment
further.

     Chapter 11 would let Enron officials continue to control the
company while negotiating a recovery plan with creditors. A
provision of U.S. bankruptcy law automatically blocks debt-
collection efforts, lawsuits and other actions against the
company.

     ``A Chapter 11 filing can be a great thing for a cash-starved
company being attacked from all sides,'' said Nancy Rapoport, dean
of the University of Houston Law Center.

                        Thousands Affected

     An Enron bankruptcy would affect thousands of people,
including the company's 21,000 employees, its customers,
suppliers, investors and other creditors. The court-supervised
recovery process would give Enron a chance to change strategies
and fix mistakes. It might take years to complete and may end in
the company's liquidation.

     In addition to its energy trading operation, Enron operates a
nationwide gas pipeline system spanning 25,000 miles. It also owns
Portland General Electric, which generates and distributes power
to about 725,000 customers in the Pacific Northwest. The company's
Enron Broadband Services is building a global fiber-optic
communications network.

     Chapter 11 reorganization lets companies abandon onerous
contracts and unprofitable leases.

     ``Every bad business deal Enron got into they'll walk away
from,'' said Peter Chapman, a distressed-debt investor who also
publishes newsletters on high-profile bankruptcy reorganizations.

                             Recovery

     The goal in Chapter 11 is a recovery plan that allows a
company to pay creditors and come out of bankruptcy. A plan
typically must be approved by a majority of creditors representing
two-thirds of a company's debts. Then a company would ask a
bankruptcy judge for final approval.

     The recovery plan divides a company's value among various
classes of creditors. Under a hierarchy set by the U.S. Bankruptcy
Code, secured creditors -- those with collateral backing their
claims -- are paid ahead of unsecured creditors, such as
bondholders and suppliers.

     Financial advisers to creditors and companies in large
bankruptcies say a Chapter 11 recovery plan for Enron would be
particularly difficult to produce.

     ``You have a host of intangible assets combined with a morass
of contingent liabilities creating a potential witches' brew of a
bankruptcy,'' said Jeff Werbalowsky of Houlihan Lokey Howard &
Zukin, an investment banking firm that has been contacted for
advice by Enron bondholders.

                           Shareholders

     Enron's shareholders are likely to lose all of their
investment in Chapter 11 because they would be last in line to get
paid.

     Some recovery for Enron creditors in a bankruptcy case may
come from lawsuits, said Russell A. Belinsky, an investment banker
with Chanin Capital Partners, which also has been approached for
advice by Enron bondholders.

     ``There's a lot of juicy legal issues,'' said Belinsky.
Potential targets include Enron's accounting firm and its officers
and directors. ``Disentangling all the pieces in a reorganization
is going to be a painstaking job.''

                             Liability

     Dynegy might face some liability for cancelling its purchase
of Enron. Dynegy invoked terms of the buyout agreement that gave
it the right to purchase an Enron natural gas pipeline if the
takeover fell apart. Dynegy received the right to the pipeline in
exchange for a $1.5 billion investment in Enron by ChevronTexaco
Corp., which owns one-fourth of Dynegy.

     Enron might use bankruptcy to prevent Dynegy from walking
away from the buyout and claiming ownership to the pipeline.

     The Dynegy acquisition, valued at $23 billion when it was
proposed on Nov. 9, collapsed as bankers failed to raise the $1.5
billion Enron needed to operate until the deal was completed. The
lack of funds and a credit downgrade contributed to Dynegy's
decision.

     Bankers led by J.P. Morgan Chase & Co. Vice Chairman James B.
Lee tried for two weeks to raise the cash Enron needed. Investors
turned them down because of heightened concern Enron wouldn't be
able to pay its debts.

                            Unraveling

     Enron's unraveling began in October after it said
shareholders' equity was reduced by $1.2 billion because of the
way the company accounted for outside partnerships it created. The
announcement prompted lawsuits and an investigation by the U.S.
Securities and Exchange Commission, and Enron ended up restating
earnings for almost five years.

     As shares plunged, Enron's trading partners lost confidence
the company would have the cash to pay bills. Trading partners
such as Mirant Corp. either demanded more collateral to trade or
restricted trading with the company.

     ``The situation is dire,'' said Deltec's Hindes. ``No one's
going to trade with Enron right now because you could wind up
being an unsecured creditor tomorrow.''