Enron to emerge from bankruptcy

Former Enron Chairman and CEO Kenneth Lay pleaded "not guilty"

Enron, the failed energy group, has received court approval to emerge from one of the most expensive bankruptcies in American corporate history.

Enron estimates that creditors will receive 19% of the $63bn (£34bn) they are seeking - around $16bn in total.

Approval by US Bankruptcy Judge Arthur Gonzalez had been expected as most of Enron's creditors have agreed with the plans to return some of their money.

The Houston-based company collapsed more than two and a half years ago.

The debt reorganisation plan that will enable Enron to come out of US bankruptcy protection should become effective by the end of the year, possibly sooner.

Under the agreed deal the $19bn will be 92% cash and 8% equity.

Shortfall

Enron declared bankruptcy on 2 December 2001, after it emerged that the company had hidden millions of dollars of debt, leaving around 24,000 creditors out of pocket.

Some $130bn in claims are still pending, which the company said will be chopped down to around $63m after negotiations.

Total claims filed reached $1 trillion.

It has been a costly episode with an estimated $665m spent in lawyers' fees, accountants and consultants.

Enron executives including founder and former chairman, Kenneth Lay; former CEO Jeffrey Skilling; and former finance chief Andrew Fastow; have been charged with crimes in the Justice Department's investigation into the firm's collapse.

Andrew Fastow will serve ten years in jail, others are still facing trial.