PG&E; Sued Over Unpaid Bonuses
PG&E; Corp., whose power-generation unit spanning 14 U.S. states is facing bankruptcy, improperly denied its energy traders their bonuses for last year, four of the traders allege in a $16-million lawsuit.
The suit was filed late last month in a circuit court in Maryland, said Lynne Bernabei, a Washington lawyer who is representing the traders. It seeks $4 million each for two former and two current employees of PG&E;’s energy trading and electricity production unit, National Energy Group, which is based in Bethesda, Md.
Managers at the unit of San Francisco-based PG&E; repeatedly assured traders until early this year that they would receive their 2002 bonuses, as an incentive to stay and help close trading contracts after a collapse in power prices led to a cash shortfall, according to the lawsuit. Then in March, the company said the bonuses wouldn’t be paid, citing lenders’ objections.
“All these people gave up potential jobs when the market was better,” Bernabei said in an interview. “Now they get to March when there are very few jobs, and the company says, ‘You’re not getting your bonuses.’ ”
National Energy Group spokeswoman Natalie Wymer didn’t return phone calls seeking comment. PG&E; said in May that it planned to restructure the unit through a Chapter 11 bankruptcy proceeding. The unit had a first-quarter net loss of $261 million.
The traders who filed the suit were: Judith Tanselle, 49, former managing director of coal and oil trading; Matthew Schwieder, 26, an analyst in coal and oil trading; Matthew Vincent, 28, a former senior trader in coal and oil trading; and Robert Wanless, 31, a power trader.
The suit accuses PG&E; and PG&E; Energy Trading Holdings Corp. of a range of offenses, including fraudulent inducement and breach of contract.
From September through December of last year, as PG&E; searched for a buyer for National Energy Group’s trading unit, managers repeatedly told employees that a new owner would still be liable for $50 million in promised bonuses and retention payments, according to the suit.
Tanselle calculated her bonus for 2002 at $1 million, up from $754,550 in 2001 and $323,100 in 2000, according to the suit. Vincent’s was $296,393, Schwieder’s was $70,744 and Wanless’ was $262,686.
