Enron gets $1.5b in financing

Energy trader lays off 4,000

By Associated Press, 12/4/2001

OUSTON - Enron Corp. has arranged up to $1.5 billion in financing to keep operating as it reorganizes under Chapter 11 bankruptcy protection, the company told a judge yesterday.

Enron announced the financing in a Bankruptcy Court hearing in New York City, hours after the troubled energy marketing company laid off 4,000 workers - or 20 percent of its work force.

Enron, which sued rival Dynegy Inc. for $10 billion on Sunday, was hit with a countersuit yesterday from Dynegy.

Enron, once the world's biggest buyer and seller of energy, imploded in recent weeks after acknowledging it engaged in questionable accounting practices and overstated its profits by more than half a billion dollars over the past four years. The practices are under investigation by the Securities and Exchange Commission.

Most of yesterday's 4,000 job cuts were at Enron's Houston headquarters. The remaining 3,500 employees in the 50-story tower were sent home, said spokeswoman Karen Denne. She said later that the 3,500 would return to work today.

The cuts amounted to nearly 3 percent of downtown Houston's work force of about 150,000.

''The whole thing, it's a nightmare,'' said Joann Matson, a laid-off human resources coordinator, as she carted her belongings to a car.

Enron shares were up 14 cents to close 40 cents a share in trading on the New York Stock Exchange. A year ago, Enron traded near $85.

Enron's Houston rival Dynegy had agreed to buy the company last month, but the $8.4 billion takeover deal fell through as Wall Street lowered Enron's credit rating. Enron filed for bankruptcy Sunday and sued Dynegy for breach of contract.

Dynegy is countersuing to protect an Enron pipeline; Dynegy claims the pipeline belongs to it because the takeover deal fell through.

This story ran on page C2 of the Boston Globe on 12/4/2001.
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