Enron: Name change; Chase probe
Bankrupt energy trader may shed name; banker Chase investigated for ties.
February 22, 2002: 9:31 a.m. ET
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NEW YORK (CNN/Money) - Bankrupt energy trader Enron Corp. is considering changing its now infamous name, according to a wire service report Friday.
The Associated Press quoted a company spokesman as saying that Houston-based Enron is looking at a name change "as part of a fresh start," and also reported that the company plans to pay bonuses to keep some key people at the same time it plans layoffs.
Meanwhile, another published report Friday said the Federal Reserve of New York is examining J.P. Morgan Chase & Co.'s accounting for commodity-related trades involving Enron.
The Wall Street Journal, citing Fed documents it said it reviewed under the Freedom of Information Act, said the investigation centers on an off-shore entity, Mahonia Ltd., set up by the old Chase Manhattan Bank a decade ago. Details.
In other Enron developments:
Arthur Andersen this week will offer a presentation to Enron Corp.'s creditors, telling them how much the accounting firm can afford to pay to settle any litigation from the collapse of the energy trader, a plaintiff's lawyer told CNN/Money Thursday. Andersen plans to open its books to creditors and will present to them the amount the Chicago-based firm can pony up without going out of business, said Vincent Cappucci, of law firm Entwistle & Cappucci, which represents the New York City and Florida pension funds in a suit against Andersen.
The accounting firm has extended an offer of $700 million to $800 million to settle shareholder lawsuits, a newspaper reported Thursday, but lawyers for the plaintiffs rejected the offer, saying it amounted to less than 2 percent of shareholders' total losses.
Separately, two big insurers, Royal Insurance Co. of America and St. Paul Mercury Insurance Co., are balking at honoring policies they wrote covering Enron's directors and officers against lawsuits.
The policies, known as directors' and officers' liability insurance, protect the company and its top officials from suits and legal costs involved in shareholder suits. Details
In New York, a U.S. bankruptcy court judge ordered the appointment of a financial expert to audit the finances of Enron Corp.'s biggest subsidiary, after creditors claimed the unit's assets were being improperly distributed.
Bankruptcy Judge Arthur Gonzalez said the examiner should look into Enron North America's finances. The unit generated a big chunk of Enron's $101 billion in sales last year, which made it the nation's seventh-biggest company before it filed for bankruptcy in December.
Creditors say that Enron North America assets worth as much as $13 billion are at stake, according to David Bennett of law firm Thompson & Knight, which represents big creditors. Details
Two government agencies associated with supporting American corporate interests abroad loaned Enron hundreds of millions of dollars, according to the New York Times, which cited the agencies and congressional investigators.
The paper said Overseas Private Investment Corp. gave Enron $544 million in loans and $204 million in risk assurance starting in 1992 to support various Enron projects abroad. Likewise, the Export-Import Bank of the United States lent $675 million to companies affiliated with Enron.
Republicans said the loans point to the Clinton administration as initiating financial ties with the now collapsed energy trader, the Times reported.
It was also disclosed that Enron looked to the Clinton administration for a board member. Former Enron Chairman Kenneth Lay sent departing Treasury Secretary Robert Rubin a letter on May 14, 1999, offering Rubin a seat on the company's board, which Rubin declined for a top post at Citigroup (C: Research, Estimates). Details
Former and current Enron employees are slated to testify Feb. 26 before two Senate panels probing the collapse of the company, once the nation's seventh largest, measured by sales.
Sherron Watkins, Enron's vice president of corporate development, Jeffery McMahon, Enron's president, and former CEO Jeffery Skilling are scheduled to appear.
Former Enron Chief Financial Officer Andrew Fastow defended his role in controversial outside partnerships in an internal memo that has surfaced, according to a published report Wednesday.
In the Aug. 30 memo prepared after an interview by law firm Vinson & Elkins, Fastow said the outside partnerships were good for the company, and blamed criticism about them on a rival's efforts to get his job at the now bankrupt energy trader, the Wall Street Journal reported Wednesday. Details
Enron's new CEO, Stephen Cooper, told ABC's "Good Morning America" Wednesday that one or more people could end up in jail on charges stemming from the government's investigation of Enron and its partnerships.
Cooper, who took the helm of Enron after Kenneth Lay resigned as chairman and chief executive last month, said it would be difficult not to hold one or more people accountable.
Separately, Enron agreed Wednesday to sell its wind turbine manufacturing assets to General Electric Co. (GE: Research, Estimates) Terms were not disclosed, but Enron said that proceeds would be used to repay creditors. Details 
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