Enron Turns to Chapter 11 Bankruptcy; Filing Is Largest in U.S. History.

Byline: Laura Goldberg

Dec. 3--Enron Corp. ran out of time and options Sunday as a growing financial crisis drove the Houston energy company to make the biggest bankruptcy filing in U.S. history.

The move came at the end of a dramatic corporate tailspin that began less than two months ago and will cost thousands of Enron's 7,500 Houston employees their jobs.

Enron and 13 of its affiliates made the filing Sunday in New York under Chapter 11 of federal bankruptcy laws, which gives a company protection from creditors' claims while it seeks to reorganize its business.

Enron listed assets of $49.8 billion and liabilities of $31.2 billion, topping the previous bankruptcy record of $35.9 billion in assets held by Texaco.

As part of its filing, Enron also sued Dynegy for $10 billion in damages for breaking off the companies' proposed merger. Until it was called off by Dynegy last week, that merger was seen as Enron's best hope for salvation.

Enron was still in negotiations Sunday night for financing that would allow it to keep running during the bankruptcy proceedings and for a separate deal it hopes would provide a means of resuscitating its energy trading and marketing business.

Enron, which was Houston's largest company and the world's largest energy trader, warned that conserving cash would mean "substantial work force reductions." Those cuts will be made primarily in Houston and could begin in the next few days.

Enron will ask the bankruptcy judge to allow it to make severance payments to employees in a…