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June 25, 2002
Enron Workers Ruled Eligible for Increased Severance
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The 4,200 workers stand gain an additional $29 million because of the ruling, according to the Associated Press.
The ruling, made in New York City on Monday by Judge Arthur J. Gonzalez, comes after several months of negotiations between Enron's lawyers and those representing the laid-off workers.
The former employees originally had been seeking an additional $68 million, or a maximum of $30,000 per employee, while lawyers for Enron claimed the company's severance policy legally terminated on the day it filed for bankruptcy, the AP reports.
Had the severance policy been paid in full to the 4,200 workers, lawyers estimate it would have amounted to nearly $150 million.
A final hearing is scheduled for Aug. 12.
The severance agreement is voluntary and give former employees the option of opting out and suing the company on their own.
A lawyer for the former employees discouraged them from opting out. "There's a substantial amount of money here," said Lowell Peterson, who was involved in the negotiations.
The former workers have already received severance payments totaling $29 million, or $5,678 each. Under the terms of Monday's agreement, they will be paid up to $13,500 each, depending on their salary, years of employment and other factors.
But the former workers stand to share potentially millions more as the official committee of Enron's creditors tries to recover payments Enron made to key employees in the months leading up to its collapse, including the tens of millions of dollars that were paid out as retention bonuses.
Federal law prohibits "preferential payments" in the 90 days leading up to a bankruptcy filing.
To read an Associated Press article, via Yahoo!, click here.