SACRAMENTO, Calif. (AP) -- Bankrupt energy company Enron has agreed to pay $47.5 million in cash in a settlement that could reach more than $1.5 billion to resolve claims that it gouged California and other western states during the 2000-2001 energy crisis.
The settlement will end market manipulation and price gouging claims against the once high-flying Houston-based company, California Attorney General Bill Lockyer said. The agreement requires approval by the Federal Energy Regulatory Commission.
In addition to the cash payment, Enron will provide California with an unsecured claim for $875 million in the energy company's bankruptcy proceedings. Oregon and Washington will receive $22.5 million each from that unsecured settlement.
The settlement also calls for the company to pay a $600 million penalty to the three states.
All the payments except for the cash settlement represent unsecured claims, which often generate payments of only a fraction of the face value. The final payment amounts will depend on the resolution of Enron's bankruptcy proceedings.
The deal will allow California to "squeeze justice from this corporate turnip," Lockyer said. "All things considered, this is a good resolution for the state's ratepayers."
The settlement helps Enron move forward to resolve its bankruptcy "so that we can accelerate distributions to all other creditors," Enron's interim chief executive officer, Stephen Cooper, said in a statement Friday.
About $65 billion in claims are awaiting settlement in Enron's bankruptcy case, company officials said.
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