The City of Houston, Harris County, Houston Independent SchoolDistrict and the Downtown Management District have their liens inplace for the outstanding taxes owed on the bankrupt energy giant'sheadquarters. But, their money won't be coming at closing as theywanted. Instead, they must pursue a course to collect from Enronwhen it starts doling out funds. The closing is to be completedbefore the year ends.

Judge Arthur J. Gonzales yesterday rejected a motion for paymentat closing and recommended filing a separate motion that would putthe taxing bodies at the top of the payment list after Enroncollects its check from the building sale, says John Dillman of theHouston law firm of Linebarger, Goggan, Blair, Pena & Sampson.He tells GlobeSt.com that Enron owes close to $6 million on itsproperties, but only half of the bill is for Enron CenterSouth.

By law, the taxing bodies must now notify each creditor of theirintent. Those notices will be going out, Dillman stressed. "Statelaws give taxing authorities priority over consensual lienholders," he says, adding he fully expects the court will upholdthe priority ranking.