Mirant ( MIR) is fighting desperately to avoid the fate of Enron. The Atlanta-based energy merchant is racing the clock to snag a key financing deal like those that have spared several of its peers already. But some experts still worry that Mirant could become the first big energy merchant after Enron to file for bankruptcy protection. "I'm very cautious about their talk of bankruptcy," said Chris Ellinghaus, an analyst at Williams Capital who rates the stock a hold and owns no shares himself. "Things are a little messier with Mirant than with the other companies." In recent days, Mirant has cranked up talk of possible bankruptcy as a solution to its financial woes. In fact, the company mentioned Chapter 11 bankruptcy more than 100 times in its latest regulatory document, filed Friday. Shortly after, the New York Stock Exchange temporarily halted trading in Mirant's shares as it reviewed the new disclosures. When trading resumed an hour later, the stock tumbled to $2.60 -- down 16% from the open -- before clawing back to $2.77 later in the day. Despite mounting fears, however, Mirant continued to stress as late as Friday morning that bankruptcy remains a last resort. "Our strong preference is to achieve a financial restructuring out of court," Mirant CEO Marce Fuller said in a prepared statement early Friday. "And we remain hopeful we can do so." The company is currently in a fierce battle with its lenders to refinance billions of dollars worth of debt. But the company has now asked both bondholders and bankers to approve a prepackaged bankruptcy plan in case its efforts -- involving a hotly contested debt swap -- fall through. Earlier this week, Mirant scored a court victory that may give the company some breathing room. On Wednesday, a judge ruled against bondholders seeking a quick hearing to block the controversial debt exchange offer. The court instead scheduled the case for trial later this year. But another pressing deadline looms.
Also this week, Mirant defaulted on a commercial paper deal with Lehman Brothers. Under the agreement with Lehman, Mirant was required to deliver and certify first-quarter financial statements that it has yet to produce. The company, which has been delinquent with its financial reports in the past, now has 30 days to remedy the situation. Mirant expects to satisfy its requirements to Lehman. But the company has warned that it could seek bankruptcy protection if it is unable to work things out. Most experts view unsecured bondholders -- who are actually suing Mirant -- as the bigger threat, however. The bondholders have accused Mirant of violating their rights by attempting to push them to share collateral with other parties. "There is some very aggressive, behind-the-scenes negotiations about the collateral," said Karl Miller, an industry veteran who leads an energy-related acquisition firm. "The threat of a prepackaged bankruptcy is still there." Ellinghaus predicted that Mirant will probably hammer out a last-minute deal like the one that saved AES ( AES). But he stopped well short of guaranteeing that success. He pointed out that Mirant -- unlike other merchants -- faces serious litigation from its debtors. In the meantime, he admitted that he has no way to even value the stock. "I have no financials, no model -- virtually no thoughts -- on the company," Ellinghaus said. "I'm basically stuck in neutral."