Former Enron Workers Seek $53 MillionAug 25, 2003 | AP Former employees of Enron Corp. have won the company's support in their quest to recover $53 million paid to a select group of executives a month before the energy giant filed for bankruptcy.
Enron filed a request Friday in support of talks to recover from 40 percent to 90 percent of the withdrawals that 114 current and former Enron employees were allowed to make from their deferred-compensation accounts.
Any money recovered would normally go to creditors. In this case, the committee representing employees is negotiating with Enron and its creditors for part of the money to be distributed directly to former employees, the Houston Chronicle reported in its Saturday editions.
Federal bankruptcy rules allow for the return of funds improperly paid out by a company in the 90 days before it files for bankruptcy.
Under a proposed settlement, those who received payments and are still working at Enron must return 40 percent of the money they received.
Employees who were laid off by Enron in the last 20 months must repay between 40 percent and 85 percent of the money, based on how long they remained with the company after bankruptcy.
People who left Enron voluntarily or were fired for performance reasons must repay 90 percent.
Deferred compensation allows executives to put off salaries and bonuses until retirement, when they are in lower tax brackets. At Enron, the money was held in unfunded trusts, whose growth matched hypothetical investments in mutual funds. For its part, Enron essentially used the funds as a loan.