Enron Update: Trial Date, Bankruptcy Reorganization Plan | AccountingWEB

Enron Update: Trial Date, Bankruptcy Reorganization Plan

After 19 months, Enron has finally filed its plan of reorganization, the diagram for recovery after one of the largest bankruptcies in history. Included in the plan are recovery arrangements for 350 different classes of creditors.

Recoveries range from five cents on the dollar up to 75 cents on the dollar, depending on which class creditors belong to. Most creditors will recover less than 20 cents on the dollar. Creditors with the best chance for the highest rate of recovery are those who hold collateralized loans. Enron shareholders will not receive anything in the reorganization plan.

The bankruptcy court will have to approve the plan before the reorganization can be implemented. It is expected that the court will take several months to consider the plan.

Meanwhile, plaintiffs and defendants in the civil lawsuits pending against Enron, Andersen, and the banks and law firms that worked with Enron, have asked U.S. District Court Judge Melinda Harmon to set October 17, 2005, as the trial date. Proposed scheduling would set October 1, 2003 as the date on which documents are to be sent to the depository, November 17, 2003 as the date on which arguments for and against class-action status must be filed, December 17, 2004 as the end of the discovery period, and September 15, 2005 as the deadline for all pretrial orders.

It is estimated that as many as 100 million documents will be produced in the Enron lawsuits, and at least 500 depositions will be taken.

There are two main cases pending against Enron and the others; neither has yet been certified as a class-action. Enron shareholders suing under federal securities laws are bringing one suit. Enron employees and ex-employees suing under both federal securities laws and pension fund laws are bringing the other suit.

Judge Harmon has yet to rule on the proposed timetable.

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