Enron on Verge of Collapse

HOUSTON --Energy giant Enron Corp., a darling of Wall Street just a year ago, hovered on the bring of one of the largest corporate collapses in U.S. history Wednesday after Dynergy Inc. withdrew Interest in acquiring the beleaguered company.Three weeks after apparently coming to Enron's rescue, Dynergy's interest in the company waned as a result of Enron's confusing financial records, Reuters reported. "While it is regrettable to see a leading industry player in difficulties, this does not reflect a failure of the merchant energy business,"' Dynegy Chairman and CEO Chuck Watson said.Dynegy invoked an escape clause that let it pull out of the deal after accusing Enron of breaching representations it made when the takeover agreement was negotiated on Nov. 9.Ranked among Fortune 500's Top 10 only months ago, Enron's value had plummeted, its ratings reduced to mere junk status by three major credit rating agencies.Dynegy said it would exercise its option to buy Enron's Northern Natural Gas Pipeline with the $1.5 billion it and partner ChevronTexaco put into the deal.Dynergy's declining interest was underscored early Wednesday when Enron halted operations of its once lucrative online trading system, EnronOnline, Reuters reported. The unit accounted for as much as 90 percent of Enron's earnings and was considered to be the jewel coveted by Dynergy in its planned $9.3 billion all-stock takeover.
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