New bankruptcy hits US energy market

Atlanta-based electricity firm Mirant has filed for protection from its creditors, the latest casualty of the US energy market crisis.

The bankruptcy was partially provoked by the continuing aftermath of the Enron scandal which undermined investor confidence in the sector, forcing firms to restructure their debt.

The bankruptcy is the tenth largest in the US by assets, according to BankruptcyData.com.

Mirant leaves behind it $11.4bn (£6.8bn) in debt and has $20.6bn of listed assets.

Talks to reschedule Mirant's debt were taking place right up to the last moment, before it finally admitted it was unable to meet a $1.1bn repayment.

And investors had been optimistic that a deal could be reached, with Mirant shares rising 29% during the day's trading.

As well as the Enron debacle, US energy firms have suffered from a collapse in electricity prices and sharply higher natural gas prices.

Mirant is also one of the firm's accused of manipulating prices in the Californian power crisis, but has denied the allegations.

It employs 7,000 people and has reassured its clients that existing contracts will be honoured.