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April 23, 2002 -- Bankrupt energy company Enron warned investors Monday that the value of its assets detailed in a November filing may actually be inflated by as much as $14 billion.
In a filing with the Securities and Exchange Commission, the company said the value of its assets may need to be reduced by $14 billion and maybe another $8 to $10 billion as well, because of the bankruptcy proceedings, the reduced sales value of some assets, possible accounting errors that overstated the value of assets, and financial techniques used in its trading unit to hedge exposure to losses, USA TODAY reported.
Enron also reported that its Nov. 19 SEC filing should not be relied upon, but that the effort needed for the company to restate its financial results for 2001 would not be possible right now. Enron has fired its auditing firm Arthur Andersen and is grappling with the bankruptcy reorganization, lawsuits and investigations.
The company, which is now being led by corporate turnaround expert Stephen Cooper, said it was disclosing the information to restore credibility and will cooperate with the court-appointed examiner who will look into its accounting practices.
U.S. Bankruptcy Judge Arthur Gonzalez has given Enron another six months to reorganize under court protection.
The former energy giant is being investigated by the SEC, Justice Department, Congress, Labor Department, IRS and Federal Energy Regulatory Commission (FERC) and others.
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