U.S. congressional panels launched probes into Enron Corp.'s financial disaster on Thursday, as the energy trader's European arm sought creditor protection and the aftershocks of history's biggest corporate collapse ripped through world markets.

Creditors, traders and banks faced the loss of billions after a rescue takeover of the Western world's dominant power and gas trader, thrown into crisis by a cash crunch and investor doubts about its viability, evaporated Wednesday and left bankruptcy as the most likely option for the Houston firm. 

Legislators from both major U.S. parties called for inquiries into the finances of Enron, which had billed itself as "The World's Leading Company," and as recently as February had been a bulletproof Wall Street favorite. 

Republican House Energy and Commerce Committee Chairman Billy Tauzin launched a congressional probe and instructed his staff to begin preparing for hearings on Enron's financial collapse early next year. Democrat Senate Energy Committee Chairman Jeff Bingaman said he is planning a hearing on Enron's impact on the energy markets, and what might need to be changed. 

"I believe that our committee is keenly aware of the need for enhanced oversight and market monitoring," Bingaman said. 

Enron found few partners to trade with in exchanges the world over, its credit ruined and financial heart barely pumping. The New York Mercantile Exchange restricted all trades with Enron, and the effects of that order helped drive the price of oil lower there. 

The company's once-lucrative Internet trading platform, EnronOnline, reopened Thursday for the sole purpose of allowing traders to unwind their positions with Enron and manage their credit, a spokesman said. 

A message posted on the site seemed to say it all: 

"While transactions may be available, customers entering into transactions should carefully evaluate their positions and Enron's current credit status before transacting." 

In London, accountant PricewaterhouseCoopers was appointed administrator for Enron Europe and a number of its operating companies -- a legal move similar to U.S. Chapter 11 bankruptcy protection. 

The appointment follows the downgrading of Enron's debt on Wednesday and the impact on its ability to trade, the accounting firm said in a statement. The administrator said buyers were already circling viable parts of the European business, including its metals trading operation. 

Enron said it may not be able to pay declared dividends on some preferred stock. 

Biggest U.S. Bankruptcy 

If Enron files for bankruptcy as expected, it would be the largest in U.S. history. Enron said its assets as of Sept. 30 were $61.8 billion, easily dwarfing the $35.9 billion in assets Texaco had when it filed for bankruptcy in April 1987. 

Analyst John Olson of Sanders Morris Harris said the expectation is that Enron will file for Chapter 11 bankruptcy protection, but worsened problems could change that, too, if it can't get enough collateral or something more goes wrong. 

"Then they might be going into liquidation, Chapter 7. And that's where you just drive your pickup truck to the front of the building and buy the desks off the trading floor," Olson said. 

Enron shares resumed their relentless plunge, closing down 41 percent at 36 cents on the New York Stock Exchange, a far cry from their peak of $90.56 in August 2000. Enron executives had told investors that it was undervalued even at that price, for a company that had revolutionized the energy industry and ranked No. 7 on the Fortune 500 list of large companies. 

In little more than a year, Enron's market capitalization has dropped to about $268 million from almost $80 billion at its peak. 

Companies worldwide released information on their exposure to Enron, and the early tally was already into the billions. 

French bank Credit Lyonnais said on Thursday it was exposed by $250 million, half of it unsecured, and utility holding company Duke Energy Corp. reported about $100 million of unsecured exposure. Utility Reliant Resources Inc. said it has about $80 million of exposure and energy trader and pipeline operator Williams Cos. pegged its exposure at less than $100 million. 

J.P. Morgan Chase & Co. said Wednesday it had $500 million of unsecured exposure, and Citigroup Inc. had between $700 million and $800 million, about half unsecured. In addition, Dutch bank ABN AMRO is part of an international syndicate that has loaned up to $3 billion to Enron's Dabhol Power Co. project in India, all of it secured. 

Enron Rocks Markets 

Enron's fall sent shrapnel throughout world financial markets. Besides crude oil's fall on NYMEX, other markets suffered from Enron-related jitters. 

In London, British day-ahead electricity prices slumped more than 40 percent as traders dumped power onto the market after cutting ties with Enron. German electricity prices jumped widely due to uncertainty over the value of long-term contracts with Enron. 

Enron pioneered power trading in Europe. It had been dealing with about 300 trading partners, from multinationals to local utilities, in the region's fledgling gas and electricity markets. 

In California, where its plans to pioneer deregulated energy went afoul, an old nemesis took a swipe at Enron. 

"If you live by the sword, you die by the sword," said Loretta Lynch, the state's top energy regulator as chair of the Public Utilities Commission. Lynch had joined Calif. Gov. Gray Davis in accusing Enron of price gouging during the state's power emergency. 

Watson Talks 

Chairman and Chief Executive Chuck Watson of Dynegy Inc., the energy trading rival that had planned to take over Enron, on Thursday said disclosures of further deterioration in Enron's operations led Dynegy to pull out of a deal. 

"It was going to be very difficult for me to go to my board and tell them there was light at the end of this tunnel," Watson said of his decision to drop the deal after hearing that Standard & Poor's and Moody's Investor's Service had junked Enron's credit Wednesday morning. 

A Nov. 19 filing with regulators showed that Enron faced insurmountable problems both in the long and short terms, causing Dynegy to invoke "material adverse change" clauses allowing it to pull out of its takeover agreement, Watson told reporters. 

"We never really recovered after [the report] was filed," he said. "It doesn't take a college graduate to figure out there was a material adverse change in their business."