Trusts Keeping Enron Off Balance

Enron stock plunged 20% last week after the energy giant revealed that a complex financing deal caused a $1.2 billion hit to its equity. But other¿big deals that have yet to receive much public scrutiny could further damage the company's balance sheet.

In the spotlight last week were transactions done with investment partnerships called LJM2 and LJM Cayman. An examination of the LJM2-related equity writedown can be found here.

However, the LJM¿deals make up only part of Enron's sophisticated financing arrangements. Also at issue are two large trusts that contain assets Enron shifted from its balance sheet. These are the $1 billion Marlin Water Trust II and the $2.4 billion Osprey Trust, usually known as Whitewing. ...