NU Online News Service, Dec. 3, 2:15 p.m. – Life insurers are starting to discuss their exposure to the Enron Corp. bankruptcy.
Enron, a Houston company that distributed natural gas and made a market in natural gas commodity contracts, filed for Chapter 11 bankruptcy protection in New York Monday, saying it had $50 billion in assets and $31 billion in liabilities.
Chapter 11 proceedings give troubled companies a chance to reorganize their operations. There is still a possibility that Enron could make good on some or all of its unsecured obligations.
But John Hancock Financial Services Corp., Boston, says it and its affiliates have a maximum possible exposure of about $320 million.
"The company currently expects that it will take a fourth quarter write down in the form of a capital loss of $100 to $125 million after tax as a result of the exposure," Hancock says in a statement.
The problems at Enron could also affect Hancock holdings in companies in which Enron has an ownership stake, such as natural gas pipeline companies.
"Hancock does not currently anticipate the need to take any write-downs on these investments," Hancock says.
Principal Financial Group Inc., Des Moines, Iowa, says it has about $92 million in secured Enron debt and faces about $79 million in additional Enron exposure.
