- The Washington Times - Wednesday, April 10, 2002

From combined dispatches
The web of transactions that led to Enron Corp.'s collapse and the accountants, law firms and banks that advised the energy-trading company will be investigated by an independent examiner, a bankruptcy judge ruled.
Meanwhile, a senior House Democrat proposed legislation yesterday that he said would put "real teeth" into President Bush's proposal to enforce companies' responsibilities.
The examiner, not yet named, will within 120 days issue a report on the Enron's special-purpose entities, off-balance-sheet partnerships, accounting irregularities and other transactions, U.S Bankruptcy Judge Arthur Gonzalez in Manhattan, N.Y., said in an order yesterday.
U.S. Trustee Carolyn Schwartz, a Justice Department official, will name the trustee, subject to Judge Gonzalez's approval.
The examiner will also determine "whether or not there is a legal mechanism for holders" of Enron shares, other than Enron affiliates, to share in creditors' recoveries when the bankruptcy case concludes. Enron owes creditors more than $40 billion.
Three Enron creditors the state of Florida, the University of California Board of Regents and Wilbur Ross's Absolute Recovery Hedge Fund had sought a Chapter 11 trustee to supplant Enron's top management and run the company.
Also yesterday, Democrats and a labor union official said at a hearing that a Republican-backed bill moving through Congress doesn't go far enough to tighten oversight of the accounting industry and corporate disclosure rules.
The new measure, written by Rep. John J. LaFalce of New York, senior Democrat on the House Financial Services Committee, would require company executives to reimburse bonuses in cases of misconduct and personally to certify accuracy of the company's financial statements.
Mr. Bush last month proposed a 10-point plan to encourage corporate responsibility and stricter control of auditors. Some of his proposals would require new laws; others could be put into effect by the Securities and Exchange Commission, the administration has said.


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