NEW YORK (CNN/Money) -
The Enron Corp. creditors committee will meet Friday to consider a business plan from the energy trader which calls for it to reorganize itself as a leaner company, a creditors' attorney told CNNfn Thursday.
Creditors, who have yet to receive the plan, have the authority to approve the creation of a smaller company or they can force Enron to liquidate all of its assets.
"We'll have to look at it," said attorney Luc Despins of law firm Milbank Tweed Hadley & McCloy. "It's too early to have an opinion."
The new firm, tentatively called OpCO Energy Co., will own power plants, electric utilities, natural-gas pipelines and liquefied-gas facilities, the Wall Street Journal said Thursday. It would have assets of about $10 billion, but without the energy trading operations that fueled Enron's expansion until its collapse into bankruptcy in December.
Enron's reorganization is led by Stephen Cooper, who will have to convince creditors Friday that they will recover more of their money by taking a stake in the new company, rather than selling it, the paper said. Enron's financial obligation to the creditors gives them power to change the company's plan as they see fit.
In April, CNN/Money reported that Enron would emerge as a smaller company with a focus on high-growth areas, such as Florida and California, and own pipelines and plants. Cooper, a turnaround specialist hired by Enron, said at the time that further job cuts could be coming.
The plans calls for the number of employees to drop to 12,000 at Enron from the current 23,000, the Journal said Thursday. An Enron spokeswoman declined comment.
Cooper said in the report that the company could be in bankruptcy for years while Enron has been telling creditors that bankruptcy would last for only one year, according to David Bennett, another attorney on the committee.
"How much of our money will be used in the hope and the attempt to establish a smaller company whose reputation is tainted," Bennett said. "We're anxious to see the plan."
Based on units the new company hopes to retain, pro forma income is expected to be $243 million this year, $353 million in 2003, $450 million in 2004, and $503 million in 2005, according to the newspaper.
In 2000, the last full year Enron reported results, the company posted net income of $979 million, which eventually was retracted after it came under scrutiny for its off-balance-sheet transactions.