The most promising front for Andersen appears to be settlement talks with plaintiffs in lawsuits brought by Enron creditors and shareholders.

In their capacity as representing Enron creditors, these firms should be initiating lawsuits against those who injured creditors and shareholders.

It beat out Citigroup, the largest American banking group and a large Enron creditor, in the auction.

At the end of last week, Andersen was negotiating with Enron creditors to head off lawsuits by Enron itself.

That was the sticking point for the banks that, as Enron creditors, are potential plaintiffs in the litigation.

"The waivers became the issue," said one person close to the committee representing Enron creditors in Bankruptcy Court.

Under state law a city purchase only works if Enron creditors agree to the purchase.

Texas Pacific is paying Enron creditors about $2.3 billion, with $935 million being debt.

The former shareholders will receive 83 percent, or $155 million; the Enron creditors will receive the $32 million balance.

The two banks thus had superior knowledge over other Enron creditors because they knew Enron's financial picture was not as good as it appeared.