Enron Drops Bid to Hire Law Firm
HOUSTON (AP) _ Enron Corp. has dropped a bid to hire its main law firm, Houston’s Vinson & Elkins, as special counsel in bankruptcy proceedings.
Several key creditors had objected to expanding the role of Vinson & Elkins, which was criticized in an internal investigation into Enron’s collapse.
In a filing late Tuesday in federal bankruptcy court in New York, Enron withdrew its application to expand Vinson & Elkins’ role. Enron needed court approval for such a change.
Enron did not explain why it abandoned its effort to give the law firm more work.
A spokesman for Vinson & Elkins said Enron had asked the firm to finish work it had begun before the bankruptcy filing Dec. 2, including the sale of some assets.
``We understand that some have raised objections ... therefore, we are in agreement with the decision to withdraw Enron’s application on our behalf,″ said the spokesman, Joe Householder.
The firm has defended its work for Enron while suggesting that the company didn’t give it full information or access to executives to carry out its legal duties.
Last year, Vinson & Elkins performed $35 million in work for Enron, making Enron the firm’s largest client at 8 percent of billings.
Enron has hired Weil, Gotshal & Manges to represent it in the Chapter 11 bankruptcy case.
Lawyers for New York and Florida pension funds and a Dallas energy company raised objections last week to giving Vinson & Elkins a role in Enron’s bankruptcy proceedings.
The pension fund lawyers noted that a committee of Enron’s board reported this month that Vinson & Elkins played a role in setting up partnerships at the center of Enron’s collapse.
The board committee said the partnerships hid Enron’s financial condition, and it faulted Vinson & Elkins for not pushing Enron to disclose details of the transactions.