[Am-info] Ex-Enron Execs Seek Millions in Severance

[Fred A. Miller]

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Ex-Enron Execs Seek Millions in Severance
Mon Aug 12, 8:25 PM ET

By C. Bryson Hull=20

HOUSTON (Reuters) - Several former Enron Corp. insiders who earned a=20
combined $25 million in the year before the company crashed are asking=20
for millions more in severance pay, a question a bankruptcy judge on=20
Monday said he will answer later this month.=20

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The list of executives includes the wife of former chief executive Jeff=20
Skilling, Rebecca Carter, and former vice chairman Mark Frevert, who=20
has asked for more than $6 million in severance pay. Carter, who was=20
Enron's corporate secretary before marrying Skilling in March, wants=20
another $875,000.=20

The executives are among 46 laid-off employees who opted not to=20
participate in a settlement that would provide up to $13,500 in=20
severance to each of the workers laid off as a result of Enron's Dec. 2=20
bankruptcy. The Houston-based energy merchant said in a court filing=20
that it has paid $32 million in severance thus far.=20

U.S. Bankruptcy Judge Arthur Gonzalez said he would decide by the end of=20
the month whether those who opted out of the severance deal are=20
entitled to anything, and if so, how much.=20

If Gonzalez rules the insiders are entitled to more than they would have=20
been paid under the deal, those who have agreed to it can back out and=20
send the process back to the drawing board.=20

Frevert, who was made vice chairman after Skilling's shock departure on=20
Aug. 14, 2001, was paid $17.3 million in the year before Enron crashed.=20
He claims that he is owed $6.6 million in severance, a calculation that=20
was based in part on his performance bonus, court records show.=20

The bankruptcy creditor's committee and Enron both said they needed more=20
time to investigate Frevert's claim. Frevert's "employment and=20
termination package was substantially increased shortly before the=20
filing and whose duties remained unclear," until after his firing in=20
December, the creditor's committee said in a court filing made on=20
Friday.=20

Carter earned $477,500 in the year before the crash. John Sherriff, the=20
former head of Enron Europe, earned $4.3 million in the same period and=20
has asked for $1.6 million more.=20

Kenneth Dodson, a former executive in Enron's engineering division, has=20
asked for $210,000 on top of the $319,000 he earned last year. Charles=20
Garland earned $1.6 million last year as a managing director at Enron,=20
and wants $892,000 in severance.=20

Certain employees are entitled to ask for "administrative expenses" to=20
reimburse them for work they did that helped preserve the value of the=20
company after it went into bankruptcy. The creditors committee argued=20
that most of them did no work after the filing.=20

Complicating the executives' claims is the fact their employment=20
contracts were nullified on the day Enron filed for Chapter 11=20
bankruptcy on Dec. 2, 2001, Further, that was a Sunday, and most=20
employees were told to stay home pending their formal layoff notices.=20
Most received theirs by Wednesday of that week.

- --=20
Fred A. Miller
Systems Administrator
Cornell Univ. Press Services
fm@cupserv.org, www.cupserv.org
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