Ann de Rouffignac
HOUSTON, Jan. 30, 2002 — Enron Corp. interim CEO Stephen Cooper Wednesday insisted the embattled company will not be liquidated, despite being saddled with $30 billion of unsecured debt.
In his first conference call since being named former Chairman Ken Lay’s successor, Cooper said the best chance for the unsecured creditors to recover any funds is through reorganization. He said there is sufficient liquidity, cash flow, and debtor-in-possession financing to support a reorganized but significantly “smaller” Enron that will be based on “hard assets” or regulated energy businesses.
Cooper, a veteran “turn-around” professional, was appointed “restructuring officer” Tuesday by Enron’s board of directors to lead the company through the reorganization. Enron filed for protection from creditors under Chapter 11 of the federal bankruptcy code Dec. 2, 2001. It was the largest bankruptcy ever in the US. Lay resigned last week as the company reeled under countless investigations by the US Congress and by regulatory agencies, including the Securities & Exchange Commission.
“We will have a good opportunity to convince them [creditors] that the best return is through a reorganization,” Cooper said. “I do not see this as a liquidation.” He didn’t indicate when a reorganization plan would be filed with the court.
Cooper said he didn’t know how much creditors will recover. It is highly probable, he said, that one creditor group could be treated differently from another. “It won’t be easy. There will be speed bumps and potholes along the way,” he said.
Enron has $40 billion in consolidated debt, including $10 billion in project financed or non-recourse debt to Enron, in addition to $30 billion in unsecured debt. “The good news is we will be able to compress the debt against the total value of Enron’s ongoing businesses,” he said.
Cooper predicted Enron’s asset base would be divided among three “pots” composed of the ongoing regulated businesses, a review and disposition of certain assets, and “odds and ends” or the claims and litigation.
Quizzed about what led to Enron’s downfall, Cooper said he “truly didn’t care. The good news is I don’t know what happened. It’s of no interest to me and I will spend zero of my time worrying about the past. I don’t care.”