Resin maker Formosa Plastics Corp. USA is seeking almost $15 million in damages from a fuel-supplying division of bankrupt energy trader Enron Corp.
The $14.7 million that Livingston, N.J.-based Formosa is attempting to recoup is for Enron Liquid Fuels' failure to meet obligations under a multiyear contract, said Formosa spokeswoman Jennifer Biancaniello.
Biancaniello declined to provide details of the contract, but said Formosa's ability to supply customers with material now or in the future will not be affected by its business with Enron. Formosa produces PVC, high density polyethylene and polypropylene, primarily at a massive complex in Point Comfort, Texas.
The fate of forward-pricing contracts Enron had with plastics suppliers and processors also is undetermined. The contracts were intended to help customers control their costs for resin and other raw materials.
Enron and other companies in the forward-pricing - or risk management - market were estimated to have at least 3 million pounds of plastics and petrochemicals under contract each month, according to the most recent annual estimate.
Enron representatives did not return telephone calls. Enron, which posted sales of more than $100 billion in 2000, filed for bankruptcy Dec. 2 after the discovery of massive accounting fraud at the Houston-based firm.