Enron Announces Settlement of Claims with Nevada Companies
Involved in Western Energy Market
HOUSTON, Nov. 16 /PRNewswire/ -- Enron Corp. announced today that it has reached an agreement to settle all civil and contractual claims between the company (and certain of its subsidiaries) and other parties related to electricity and natural gas transactions in the Western United States from 1997-2003, including claims filed in proceedings with the Federal Energy Regulatory Commission (FERC) and the Bankruptcy Court for the Southern District of New York. The parties entering into the settlement agreement with Enron are Nevada Power Company, Sierra Pacific Power Company, and Sierra Pacific Resources (Nevada Companies).
"This settlement represents the latest in a series of significant claims that have been resolved in Enron's bankruptcy proceedings," said John Ray, Enron's Board Chairman. "We are pleased that this settlement enables us to collect additional value for the creditors, and, at the same time, resolve claims against the estate so that we can accelerate distributions to all creditors."
In the settlement, as consideration of their mutual dismissal and release of claims against each other, (i) Enron will receive a $129 million termination payment to be made by the Nevada Companies arising under contracts for the sale of electricity that were terminated in 2002 and (ii) the Nevada Companies will receive a shared allowed unsecured bankruptcy claim of $126.5 million against Enron Power Marketing, Inc. (EPMI), an Enron subsidiary, which will entitle the Nevada Companies to receive distributions on such claim pursuant to Enron's confirmed Chapter 11 Plan of Reorganization (Plan). According to the claim recovery rate for EPMI under the Plan, the settlement produces a net value to Enron's creditors of $100.03 million.
The settlement remains subject to the approval of the FERC and the Bankruptcy Court for the Southern District of New York.
Enron's Internet address is http://www.enron.com.
CAUTIONARY STATEMENT: Certain statements contained in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and other statements that are other than statements of historical facts. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include, but are not limited to, political developments affecting federal and state regulatory agencies, and developments with respect to the bankruptcy of Enron. Except as required by law, Enron does not undertake any obligation to update any forward-looking statements.
SOURCE Enron Corp.
CONTACT: Torie Pennington for Enron Corp., +1-212-850-5629 -0- Nov/16/2005 12:30 GMT