Ex-Enron Execs Seek Extra Severance
Several former Enron Corp. insiders who earned a combined $25 million in the year before the company crashed are asking for millions more in severance pay, a question a bankruptcy judge Monday said he will answer later this month.
The list of executives includes the wife of former Chief Executive Jeffrey K. Skilling, Rebecca Carter, and former Vice Chairman Mark Frevert, who has asked for more than $6 million in severance pay. Carter, who was Enron’s corporate secretary before marrying Skilling in March, wants $875,000.
The executives are among 46 laid-off employees who opted not to participate in a settlement that would provide up to $13,500 in severance to each of the workers laid off as a result of Enron’s Dec. 2 bankruptcy filing. The Houston-based energy merchant said in a court filing that it has paid $32 million in severance thus far.
U.S. Bankruptcy Judge Arthur Gonzalez said he would decide by the end of the month whether those who opted out of the severance deal are entitled to anything, and if so, how much.
If Gonzalez rules the insiders are entitled to more than they would have been paid under the deal, those who have agreed to it can back out and send the process back to the drawing board.
Frevert, who was made vice chairman after Skilling’s departure last August, was paid $17.3 million in the year before Enron collapsed. He claims that he is owed $6.6 million in severance, a calculation that was based in part on his performance bonus, court records show.
The bankruptcy creditor’s committee and Enron both said they needed more time to investigate Frevert’s claim.
Frevert’s “employment and termination package was substantially increased shortly before the filing and whose duties remained unclear,” until after his firing in December, the creditor’s committee said in a court filing made Friday.
Carter earned $477,500 in the year before the collapse. John Sherriff, the former head of Enron Europe, earned $4.3 million in the same period and has asked for $1.6 million more.
Kenneth Dodson, a former executive in Enron’s engineering division, has asked for $210,000 on top of the $319,000 he earned last year. Charles Garland earned $1.6 million last year as a managing director at Enron and wants $892,000 in severance.
Certain employees are entitled to ask for “administrative expenses” to reimburse them for work they did that helped preserve the value of the company after it went into bankruptcy. The creditors committee argued that most of them did no work after the filing.
Complicating the executives’ claims is the fact their employment contracts were nullified on the day Enron filed for Chapter 11 bankruptcy.
Further, that was a Sunday, and most employees were told to stay home pending their formal layoff notices. Most received theirs by Wednesday of that week.
