Enron Workers File Suit Over ‘Staggering Losses’
Enron Corp. employees past and present who said they suffered “staggering losses” in their retirement funds filed a lawsuit Monday seeking reimbursement from top company executives.
The legal action came as the wife of ousted Chairman and Chief Executive Kenneth L. Lay was claiming in a television appearance that the couple are nearly broke.
The group of more than 400 Enron employees, whose 401(k) retirement plans are now virtually worthless, contends in the federal lawsuit filed in Houston that employees were urged to invest in Enron stock but were not told how fragile the company’s financial condition was. Enron filed for Chapter 11 bankruptcy protection Dec. 2.
The suit names as defendants Lay, former CEO Jeffrey K. Skilling and former Chief Financial Officer Andrew S. Fastow, among others. Those three executives sold more than $198 million in stock, the suit alleges. The suit also names Northern Trust Co., trustee for the retirement plan, and Andersen, Enron’s former accountant.
“Enron executives were profiting from an elaborate shell game, using the hard-earned retirement savings of their loyal employees,” Randy McClanahan, a lawyer representing the group, said in a statement.
This is the latest in dozens of lawsuits filed against current and former Enron executives, accusing them of misleading investors. The company and its officers have repeatedly denied any wrongdoing.
So did Linda Lay, who defended her husband, in a taped interview aired Monday on NBC’s “Today” show, as an “honest, decent, moral human being who would do absolutely nothing wrong.”
Lay, appearing bitter and emotional, told NBC News correspondent Lisa Myers that everything the family owns is for sale except the opulent Houston home where the interview took place over the weekend. Ken Lay, Myers noted, has been advised by his lawyers to avoid speaking to the media.
Lay acknowledged that her husband earned “a massive amount of money.” However, she added: “It’s all gone. There’s nothing left. Everything we had mostly was in Enron stock.”
The couple’s wealth has been further drained by cash calls on other long-term investments, and the Lays are nearly bankrupt, she said. Lay said that she understands the anger being focused on her husband but that he did not know all that occurred at Enron before the company crumbled into insolvency.
Public relations professionals, who asked not to be identified, saw the interview as a desperate move to humanize Ken Lay--but one that may not play well.
“I don’t know what ... they were thinking,” one said.
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