“As lawmakers expressed outrage over how the company could collapse so quickly with so little warning, Enron sought protection from some of its creditors in Europe yesterday and allowed traders to dissolve positions through its online unit,” writes Richard Oppel in today’s New York Times.

“With business a sliver of its level just weeks ago, Enron, once a giant energy trading company, was desperately looking for ways to restructure, most likely in a bankruptcy filing within days.”

“The ripples were felt from Houston, where edgy employees at the company’s headquarters ran a gantlet of photographers and braced themselves for anticipated layoffs, to Brazil and India, where jockeying began over control of Enron properties. Financial companies, trading partners and governments rushed to calculate how much they were owed by Enron and what their losses might be.”

“Tensions mounted between Enron and Dynegy, which withdrew its offer for the company on Wednesday. Litigation appeared increasingly likely over Dynegy’s decision to walk away as well as its plan to take one of Enron’s most prized assets, the Northern Natural Gas pipeline, under a previous agreement.”

“In Washington, lawmakers announced plans to investigate Enron’s collapse. Representative Billy Tauzin, the Louisiana Republican who is chairman of the House Energy and Commerce Committee, ordered hearings and an investigation. His Senate counterpart, Jeff Bingaman, Democrat of New Mexico, did the same.”

” ‘How a company can sink so far, so fast, is very troubling,’ Mr. Tauzin said though his spokesman, Ken Johnson. ‘We need to find out if the company’s accounting practices masked severe underlying financial problems.’ Mr. Johnson said hearings would probably be held by early next year.”

“Enron, which was the world’s largest trader of electricity, natural gas and other commodities, is widely expected to file for bankruptcy-court protection by next week — unless creditors force it into court before then. The company says options other than a reorganization under Chapter 11 are being considered, but it did not say what those were. Investors have factored in a bankruptcy filing, pushing Enron’s stock, which peaked at $90 last year, down 25 more cents yesterday, to 36 cents.”

“Moody’s Investors Service said that it was considering a downgrade of Dynegy’s credit rating because of potential liabilities from litigation with Enron. Shares of Dynegy closed at $33.65, down 8.4 percent, or $3.08.”

” ‘It remains uncertain whether or not the company will face legal challenges from Enron,’ Moody’s said, adding that it ‘will continue to monitor any potential consequences of the merger termination and any subsequent impact on Dynegy’s capital structure and liquidity ‘ “

“In London, the accounting firm PricewaterhouseCoopers was appointed the administrator in the reorganization of Enron’s energy trading operations in Europe. Led by banks and energy trading firms, American companies said they might lose more than $1 billion in the wake of Enron’s tumble.”