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Enron Workers File Lawsuit - 2002-02-15

Former Enron employees filed a legal motion in a New York court in an effort to obtain severance pay from the energy company, which filed for bankruptcy in December. A hearing on the motion will be held in two weeks.

Former employees are asking the court to demand that Enron pay each worker immediately up to $30,000. The new chief executive officer of Enron, who is now in charge of restructuring the company, says he would not oppose the motion.

The laid-off employees who were at the courthouse in Manhattan said they are pleased by the company's response. But the reality is less gratifying.

Enron is expected to pay some money promptly, but not the bulk. Since the bankruptcy, Enron's financial situation is being managed by a creditors' committee, comprised of some of the world's leading banking institutions.

Dennis Vegas, who worked for Enron three years before being laid off, anticipates resistance from the high-powered group.

We need to make an appeal to Citigroup, as well as J.P. Morgan Chase, two major institutions that sit on the creditors' committee, that they look at what has happened to the 6,000 displaced workers due to Enron's demise, and find a way to release the severance money that are owed to these individuals, he said.

Former Enron employees say the company did them wrong. Their lives are chaotic, their savings gone.

My name is Katherine Benedict. I worked for Enron for seven years. The last job I held was as a marketing specialist, she said. I like the other ex-Enron employees here, we loved the company. We loved Enron. We were blind-sided by this event. We lost our jobs, we lost our income streams, most of us have lost our entire retirement. Trying to live on unemployment is very difficult and not being given a severance package made things very difficult for our lives.

The AFL-CIO, the largest U.S. labor organization, has rallied to the side of the Enron workers. Lowell Peterson, one of the attorneys assigned to the case, estimates the total severance package for all former employees would probably amount to about $100 million.

Mr. Peterson says he believes Enron has the cash to pay. In any case, he argues it is an investment Enron would be well advised to make if it hopes to survive beyond bankruptcy.

The amount of money involved is frankly trivial in relationship to the larger picture here, but not trivial in terms of the firm's prospect for re-organization, he said. They cannot retain people as long as people think that if they do happen to get laid off, they are completely out of luck. So $100 million is not just an investment in justice for these folks, it is an investment in the survival of a multi-billion dollar enterprise.

One fact the former employees keep emphasizing is that not all of Enron is bankrupt. Enron, they insist, is still making money.