The United States Bankruptcy Court Monday granted preliminary approval to a settlement between the Enron Corporation, which filed for bankruptcy in December, and more than 4,000 of its former employees.
Under the provisions of the settlement, every Enron employee laid off before March 1 of this year will be entitled to his or her full severance package, up to a cap of $13,500. But according to Lowell Peterson, counsel for the Enron employee, the payments will not stop there.
"One of the things that really galled us, one of the reasons that we filed the motion, is that many high-ranking executives received about $105 million in bonuses shortly before Enron filed for bankruptcy," says Mr. Peterson. "We thought this was fundamentally unfair, and we complained about it. One of the nice features of this settlement is that a substantial amount of that money is now subject to lawsuits by the official employees committee, and the proceeds of those lawsuits will be used to pay additional severance."
Mr. Petersen says the workers will begin receiving money from the settlement in about two weeks. A remarkable feat, he says, in light of how complicated bankruptcy law is, and how lengthy bankruptcy cases usually are. He says the process was sped up in this case by public outrage over Enron's criminal wrongdoing.
"We did a lot of legal work and we had a lot of creative theories, but having the public behind us on this, and having the labor movement behind us, and having the obvious wrongdoing so present in the case, especially with respect to people who were lining their pockets with money, while our folks were not able to pay for medicine, losing their homes, not able to afford tuition for their kids, I think that enormous disparity was critical," says Mr. Peterson.
Mr. Peterson reports that there have been no serious objections to the settlement, from Enron or any other party.