Beleaguered energy company Enron has filed for Chapter 11 bankruptcy protection in the United States, the firm said.
Enron also filed a lawsuit against would-be suitor Dynegy Inc for alleged wrongful termination of its $8.4 billion proposed merger. Enron said it was seeking at least $10 billion in damages.
Both actions were filed in US Bankruptcy Court for the Southern District of New York.
In the statement, Houston-based Enron said it was in "active discussions" with several financial institutions to secure credit for the continued operation of its wholesale energy trading business, as well as funding to keep the rest of the company operating.
Enron's loss of credibility in the market stemmed from revelations its chief financial officer was running partnerships that allowed the company to keep half a billion dollars in debt off its books.
In early November, Enron restated its earnings back to 1997, eliminating over $580 million in reported income.
Dynegy swooped in to rescue its neighbour with an $8.4 billion buyout, but officials at the smaller rival were surprised when Enron later disclosed it had a $690 million debt within a week.
Amid talks to reduce the purchase price, the Dynegy-Enron deal fell apart after Enron's credit was reduced to junk status.
AP