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Friday, 4 January, 2002, 06:19 GMT
Dynegy wins Enron pipeline
Enron offices
The hearing is one of several into the collapse
Dynegy, the former suitor of failed energy giant Enron, has managed to extract a prized gas pipeline running up the spine of the US from the massive bankruptcy case enveloping the company.

But despite the deal, the two firms still appear dead set on suing each other for billions of dollars over the breakdown of their $8.4bn merger talks.

The Northern Natural Gas pipeline, which runs more than 25,000km and joins the Texas gas fields to the Mid-West of the US, was one of the main reasons for Dynegy's attempts to buy out Enron.

Dynegy had put $1.5bn into Enron in return for which, it claimed, Enron had signed away its rights over the pipeline.

But Dynegy walked away from the merger talks just days before Enron was forced to petition the courts for bankruptcy protection as the scale of its troubles became clearer.

That, said Enron, rendered its rights over the pipeline void.

Now, though, the two have agreed that Dynegy will pay $23m to exercise its option over the pipeline - although the date before which Enron is allowed to buy it back has been extended to 30 June from 23 May.

That leaves the way clear for the two to get on with suing one another.

Under the spotlight

Enron still stands accused of questionable accounting practices contributing to the company's downfall, which saw its share price implode from $90 to under a dollar in less than a year.

Kenneth Lay, Enron
Kenneth Lay: close to the White House
As well as facing the bankruptcy courts, Enron executives are being investigated by Congressional committees, the Department of Justice and the Labor Department, to discover whether regulatory failures contributed to the collapse which robbed employees of their life savings.

Also under the spotlight are the links between Enron and the White House.

The company gave millions of dollars to the Republican party in the 2000 election campaign, and its executives are known to have very close relations with senior Bush administration officials.

Its chairman and chief executive Kenneth Lay was formerly an energy policy adviser to President George W Bush himself.

See also:

13 Dec 01 | Business
Enron chiefs under fire
12 Dec 01 | Business
Enron to start $6bn sell-off
08 Dec 01 | Business
Enron chiefs sued for $25bn
03 Dec 01 | Business
Enron files for bankruptcy
09 Nov 01 | Business
Enron admits inflating profits
05 Dec 01 | Business
Enron debacle forces audit rethink
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