Skip to comments.Five former Enron executives who reaped millions seek extra pay
Posted on 08/12/2002 5:14:43 PM PDT by RCW2001
BRAD FOSS, AP Business Writer
Monday, August 12, 2002
©2002 Associated Press
(08-12) 13:15 PDT NEW YORK (AP) --
Among a group of laid-off Enron workers who are asking a bankruptcy court for extra pay are five insiders who reaped $7 million in the year before the company's collapse. They include the wife of former chief executive Jeffrey Skilling.
The five insiders joined 49 other former colleagues in opting out of a tentative agreement negotiated earlier this summer that would give some 3,550 laid-off workers as much as $13,500 each in severance. Instead, they filed individual claims -- with several seeking hundreds of thousands of dollars more from the bankrupt energy company.
On Monday, bankruptcy judge Arthur Gonzalez said he would decide at the end of August whether those who opted out of the tentative agreement should receive anything, and how much.
The ruling is critical because if the total amount granted to those making individual claims exceeds the amount they would have received under the tentative agreement, Enron and its creditors are allowed to back out of the $29 million deal.
If that happened, thousands of former workers would likely seek severance payments exceeding the amount they would have received under the agreement, lawyers for the former workers said.
Among those who opted out of the tentative agreement was Rebecca Carter, a former senior vice president who married Skilling in March and received more than $477,500 in payments and stock in the year leading up to Enron's collapse.
In all, 144 insiders amassed more than $743 million in salary, bonuses, long-term incentives, loan advances, stock options and more between December 2000 and December 2001, when Enron filed for bankruptcy. For his part, Skilling received nearly $35 million over that period.
Now, Carter is asking for $875,000 more, according to bankruptcy court filings.
David Cox, a former executive at Enron's high-speed Internet subsidiary, is seeking $1.1 million from his former employer after receiving $1.1 million in the year before Enron's collapse.
Keith D. Dodson, a former executive in Enron's engineering and construction subsidiary, wants $210,000. Dodson received $319,941 in the 12 months before Enron's collapse.
Charles K. Garland, a former managing director, is asking for $892,000. He received $1.6 million before Enron's demise.
John Sherriff, the former president of Enron's European operations, asked for $1.65 million. He received $4.3 million in pay and stock before the collapse.
The former insiders claimed they're owed "administrative expenses" -- which can include wages and commissions -- for services they rendered that helped preserve the value of the company after it filed for bankruptcy. Bankruptcy experts said the burden of proof will be difficult since their employment contracts were terminated when the company made its Chapter 11 filing Dec. 2.
Even if Gonzalez rules in favor of the former employees on the administrative expense claims, he might withhold funds pending an investigation into the pay and stock these employees received in the year before Enron imploded.
Lawyers representing the official creditors committee argued in a court filing that Gonzalez should not provide any severance to these individuals until an ongoing investigation of the earlier payments is complete.
Gonzalez will rule on the administrative expense claims and the severance agreement in the last week of August.
But different then the day before?
Now I have that song going through my head, thank you very much!
The word "Gall" was invented to describe this bunch.
Wow! Apparently, paper shredding and lying are qualifications for bonuses. I wonder if they will add these to their resumes?
These people are amazing.