Office of the Attorney General News Release Archive

Tuesday, December 11, 2001


Motion Filed Today Seeks Transfer of Venue from New York to Houston, Attorney General Cornyn Files with Court to List State Agencies as Creditors

AUSTIN - Texas Attorney General John Cornyn today added the State of Texas to the list of organizations urging a federal court to move the Enron bankruptcy hearings to Houston from New York, where the energy corporation filed its bankruptcy claim on December 2, 2001.

"The interests of . . . Texas taxpayers are best served by having these cases based in the Debtors' home state of Texas," Attorney General Cornyn said in the response supporting legal arguments to move the hearings. "Multiple Texas state government agencies have claims or interests in the Enron bankruptcy cases."

Today's action follows the State's filing in the federal court on Friday that the State of Texas and at least four state agencies - the Office of the State Comptroller; the General Land Office; the Texas Workforce Commission and the Texas Natural Resource Conservation Committee - have claims against Enron. More are likely to be added to the list.

The two actions stem from work underway by the Attorney General's intra-agency "Enron Task Force," charged with identifying legal actions that will be necessary to protect the State's interests as a result of the financial collapse of Houston-based Enron.

The Office of the Attorney General has identified a $1.2 million claim stemming from an Enron North America Corp. natural gas contract sold to the General Land Office in November, and 75 noncustodial parents employed by Enron or one of its subsidiaries whose monthly child support payments are withheld by the corporation for distribution to the custodial parent. Other estimates are available in today's motion to transfer venue (attached).

Deputy Attorney General for Litigation Jeff Boyd is supervising the in-house legal team consisting of chief attorneys from numerous divisions and sections including Financial Litigation; Bankruptcy and Collections; Taxation; Transportation; Natural Resources; General Litigation; Consumer Protection and the Solicitor General. "My legal team is conducting a thorough examination of all legal avenues available to the State under Texas law. We will continue to work with our client agencies to discern whether Enron owes any taxes or other obligations to the State, or if the State has any other claim we need to protect. Any action taken on behalf of the State may occur within the statutory, 180-day period of time federal bankruptcy courts allow," Attorney General Cornyn said.

"My goal is to soundly examine and identify state and federal laws applicable to the issue. Related to that effort will be an analysis of lawsuits filed in response to Enron's December 2 bankruptcy protection claim."

Attorneys from the Office of the Attorney General (OAG) have already begun and will expand communications with appropriate staff members from State agencies to determine any and all claims that are held against Enron. This would include, but not be limited to, areas concerning State investments, taxes, contracts, environmental regulatory compliance, and child support payments.

Even before Enron filed the December 2 bankruptcy claim, Boyd and others met with private counsel representing Enron shareholders to begin evaluating what role the State's Employees Retirement System, Teacher Retirement System and Permanent School Fund should play in pending shareholder derivative suits. The evaluations are ongoing.

"Texans have a lot of unanswered questions about how this corporate collapse will affect the State of Texas. I intend to do everything within the power of this office to make sure that the State's legal options are properly identified and performed," Attorney General Cornyn said.

"Our actions will be concerted and coordinated, and will not duplicate efforts that would result in the unnecessary expenditure of State resources."

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