Enron reaches settlement with Marlin Water Trust, noteholders to receive $127.5 million

By Carlise Newman

Chicago, July 21 - Enron announced it has reached a settlement resolving certain claims and disputes relating to notes issued by the Marlin Water Trust, a special purpose vehicle established by Enron.

Under the proposed settlement, holders of Marlin notes will receive $127.5 million in cash. The cash portion of the settlement includes the proceeds of collateral held by the Bank of New York, as indenture trustee and the payment of amounts owed by Azurix Corp., a non-debtor affiliate of Enron.

Azurix Corp. will pay the indenture trustee, on behalf of the noteholders, $18.6 million under a promissory note from Azurix to Atlantic Water Trust.

In addition, the Bank of New York, at the direction of holders of 69% of the Marlin notes, has agreed to reduce its $1.1 billion claim to a $507.5 million general unsecured claim.

Enron and the creditors committee will withdraw their objections to the payment of $109 million held by the indenture trustee to the noteholders.

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