Enron Creditors Seek $12 Million
Enron Corp.’s creditors filed a lawsuit in U.S. Bankruptcy Court seeking $12 million that former executive Michael J. Kopper has agreed to turn over to the government.
Kopper pleaded guilty last week to fraud and money-laundering charges and agreed to surrender $12 million he admitted to obtaining illegally. Enron’s LJM2 Capital unit, which Kopper managed, controls about $4 million of the total.
Enron’s creditors’ committee Monday sued Kopper and LJM2 to recover the money and help repay some of the more than $50 billion they say they’re owed. The creditors want to force the government to relinquish control over Kopper’s illegal gains. U.S. Bankruptcy Judge Arthur J. Gonzalez in Manhattan froze the funds pending a hearing on the lawsuit scheduled for Wednesday.
“The $12 million that Kopper and LJM2 hold that he now seeks to turn over to the government should be possessed by Enron,” the creditors’ committee said in court papers. “Kopper would be unjustly enriched if he were permitted to turn over Enron’s property” to anyone else, the panel said.
The creditors’ panel said the judge must act quickly, before Kopper turns the money over to government officials.
Kopper, who managed partnerships allegedly used to hide $1 billion in Enron losses, agreed to cooperate with U.S. investigators and implicated former Chief Financial Officer Andrew S. Fastow in an alleged scheme to defraud the energy company’s investors.
Prosecutors want to seize $23 million from bank accounts of Fastow and other former Enron employees, along with a house Fastow is building.
Fastow made more than $30 million from investments in the partnerships and Kopper and his domestic partner, William Dodson, made more than $10 million, according to a report in February by a special committee of Enron’s board.
Court papers disclosed that the government is seeking to seize two Fastow family bank accounts with $9.1 million and one in the name of a family foundation with $4.6 million. The government wants to seize a home Fastow is building in the affluent River Oaks section of Houston.
The government also is seeking bank accounts with more than $1.6 million from former Enron lawyer Kristina Mordaunt, who shared in some of the partnership proceeds, and her home, and $916,137 from former Enron Treasurer Ben F. Glisan Jr. The government also wants to seize a Lexus owned by Mordaunt’s husband, court papers said.
