Consumer news briefs for June 3, 2004

Thursday, June 3, 2004 | 11:09 a.m.

Enron seeks judge's approval of reorganization plan

NEW YORK -- Enron Corp., the world's largest energy trader before an accounting fraud caused its collapse in 2001, asked a judge today to approve a plan that would allow it to exit the second-largest bankruptcy in U.S. history.

The reorganization plan allocates Enron's remaining assets to creditors owed more than $74 billion. Creditors, such as Citigroup Inc. and the University of California, would divide more than $7.4 billion in cash, stock in Enron's remaining businesses valued at $3.7 billion and whatever proceeds Enron receives from lawsuits filed against former banks, law firms and other business partners. Most creditors would get an estimated 20 cents of every dollar they are owed, court papers show.

"The recovery rate for Enron bondholders and other unsecured creditors is abysmal," said Praveen Varma, a Moody's Investors Service analyst who studies bankruptcies. "Typically bondholders of a diversified public utility get 80 cents on the dollar at the end of a reorganization, and Enron is paying a quarter of that."

The plan is likely to be approved by U.S. Bankruptcy Judge Arthur Gonzalez in New York, bankruptcy experts say.

Closed downtown property sold

A limited liability company run by the owner of the Timbers tavern chain has purchased the long-vacant Trolley Stop casino in downtown Las Vegas.

The $4 million purchase from former Binion's Horseshoe owner Becky Behnen and her husband Nick Behnen closed in April.

Timbers Hospitality Group President Andrew Donner declined to comment on his plans for the building, at 207 N. Third Street. Donner is a lender in the management company that operates the casino for the Lady Luck hotel-casino, which is across the street from the Trolley Stop.