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Enron Says Assets Off by Billions

April 23, 2002|From Bloomberg News

HOUSTON — Enron Corp. may have overstated the value of its assets and financial contracts by as much as $24 billion late last year, the company said in a regulatory filing Monday.

At least part of the overstatement relates to transactions Enron made with a network of private partnerships that hid debt and assets from shareholders by keeping them off the company's books. Enron said its earlier financial results, which it restated Nov. 19, aren't reliable.

"This is the first attempt to quantify the amount of the off-balance-sheet financing," said Richard Miller, general counsel for Dallas-based Exco Resources Inc., an Enron creditor.

Enron, which filed the biggest U.S. bankruptcy ever in December, is the target of more than a dozen investigations by the Securities and Exchange Commission, the Justice Department and congressional committees.

The energy company's collapse cost 5,600 people their jobs. About $78 billion in Enron's market value has been eliminated since August 2000.

Houston-based Enron, which has no auditor since firing Arthur Andersen, doesn't plan to provide 2001 financial statements because it may not be "the best use of the company's resources," it said in a report to the Securities and Exchange Commission.

Enron had intended to file corrected financial statements for last year. Since the arrival of interim Chief Executive Stephen F. Cooper, managers determined it was more important to work on the bankruptcy proceedings, developing a reorganization plan and cooperating with government probes and civil litigation.

If Enron were to file financial statements, the company said it would have to write down assets by about $14 billion.

Enron said it might require an additional $8-billion-to-$10-billion write-down relating to financial instruments used in its trading business, which has since been sold.

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