Enron workers seek $100 mn from bankrupt trader
A group of former Enron Corp employees, backed by the AFL-CIO labour union and activist Rev Jesse Jackson, appealed to a US bankruptcy court on Thursday to approve payments of some $100 million to laid-off workers.
The motion, filed with Judge Arthur Gonzalez of the Southern District of New York, cited "desperate human need and fundamental fairness" on behalf of some 4,500 employees who were laid-off immediately after the former energy trading giant filed for bankruptcy on Decemebr 2, 2001.
"We are here because many laid-off Enron employees simply cannot make ends meet," said Debra Johnson, a former Enron employee, in a statement released at a news conference in lower Manhattan. "While a few executives got midnight wire transfers of more than a million dollars, thousands of us cannot afford healthcare and face eviction from our apartments."
Separately, US trustee Carolyn Schwartz said she would appoint an official committee to deal with issues related to former Enron employees, lawyers for the Severed Enron Employees Coalition said.
Schwartz, who was appointed by the US bankruptcy court, will likely name the members of the employee committee sometime next week, bankruptcy attorney Scott Baena told Reuters.
The AFL-CIO and Jackson-backed motion calls for the court to approve raising an employee severance cap of $15,000 to $30,000 and asks that payments for former employees be paid for unused vacation and other claims, court documents show. Most employees were entitled to a $4,500 severance payment each, the documents say.
All told, the bill would likely run up to around $100 million, said Damon Silvers, an AFL-CIO lawyer who filed a motion in support of the workers' brief. He said the court set a hearing of February 27 to hear the motion.
One lawyer who represents creditors said he thought it unlikely workers would get all they seek.
"Enron ought to pay everyone in full, but they can't," said Rhett Campbell of Houston law firm Thompson & Knight. "It's probably right that they (the former workers) are being treated unfairly, but everyone is being treated unfairly. Bankruptcy is unfair."
Enron filed for bankruptcy on December 2 in the largest filing ever, listing some $40 billion in debt. The move left creditors including banks, bondholders, former employees and trade vendors to fight for a share of the assets in the collapsed firm.
Enron continues to operate under bankruptcy protection as a collection of pipelines and utilities, but minus the key energy contract trading operations, which provided the bulk of its revenue of $101 billion in 2000.
Some experts say they expect the company to be liquidated and the assets sold to pay creditors, but Enron officials say they aim to have the firm eventually emerge from bankruptcy protection.
Campbell, who represents Dunhill Resources and other Enron creditors, said the court-appointed committee would have a strong say in whether any additional payments would be made to the workers. But he said it was unlikely any special dispensation would be granted.
Thursday's filing came a day after Jackson, the prominent civil rights activist, won a commitment from interim Enron chief executive Stephen Cooper to pay $4,500 each in severance pay owed to about 300 laid-off employees.
The claim today is one of a number by former Enron employees. Another group of as many as 400 senior executives are seeking payments of some $400 million in deferred compensation from Enron, said Michael Moran, a former Enron lawyer who is pressing the claim and has a seat on the creditors committee.
"All these workers deserve their severance. They are not asking for a bailout or a handout," said Jackson, speaking before a clutch of shivering reporters outside the Manhattan courthouse.
"We want Gonzalez and the creditors committee to be merciful enough and sensitive to these workers plights. They need their money now."