HOUSTON - Embattled Enron Corp.'s board on Tuesday selected a reorganization expert to guide it through the largest bankruptcy in history.
The selection of Stephen Cooper came less than a week after the resignation of Kenneth Lay as chairman and chief executive.
Also Tuesday, the board announced the resignation of Enron's president and chief operating officer, Lawrence G. Whalley.
Stephen Cooper, managing principal of the New York-based reorganization adviser Zolfo Cooper, has been hired as chief executive and chief restructuring officer. He will lead Enron through its Chapter 11 bankruptcy case amid multiple investigations into the company's swift collapse last year.
Zolfo Cooper's long list of past clients include instant film maker Polaroid Corp., Hawaiian retailer Liberty House and Spokane, Wash.-based Pegasus Gold Corp.
Enron's board and the creditors' committee in the company's bankruptcy reviewed candidates last week.
The company also said Tuesday that Jeff McMahon has been elevated from chief financial officer to president and chief operating officer. Treasurer Ray Bowen was named vice president and chief financial officer. Both, as members of the Office of the Chief Executive, will fill out Enron's top management team.
Cooper said the team will immediately start working with Enron's current management and the creditors' committee on the company's efforts to emerge from bankruptcy.
``Our focus is on the future of Enron,'' Cooper said in a statement. ``We will work closely with the board of directors, management and the creditors committee to develop a reorganization plan to maximize value for the company's stockholders.''
Whalley has resigned as president and chief operating officer and will accept a position with UBS Warburg, the Swiss bank that acquired Enron's cornerstone trading operation earlier this month.
Lay resigned last week as chief executive and chairman under pressure from Enron's creditors and fellow directors, acknowledging he couldn't lead the company through bankruptcy while facing numerous investigations into the Enron's collapse.
Lay, 59, remains on the board. A search continues for a new chairman.
Enron filed for bankruptcy in New York on Dec. 2, and laid off thousands of workers at its Houston headquarters the next day.
The filing came after weeks of revelations that executives had concocted complicated partnerships that let Enron keep $500 million in debt off its books and eliminate millions of dollars in profits through restated earnings.
Shares spiraled to less than a dollar from nearly $80 a year ago, obliterating employees' retirement funds loaded with Enron stock.
Nearly a dozen congressional committees, the Justice Department, the Securities and Exchange Commission and others have launched investigations into how what was No. 7 on the Fortune 500 last year could implode with such force.
Upon Lay's resignation, the company said it would quickly search for a successor who could devote the necessary time to run Enron and handle its bankruptcy while Lay and other executives face the investigations and increasing lawsuits.
Wednesday
January 8th, 2025
3:19PM
