back
|
 |
Enron Pension Decision Expected
-Settlement Ruling Set For Tuesday-
By Tom Becker, Bloomberg News
August 2, 2004
A federal judge said he will rule Tuesday on whether Enron Corp.'s insurance companies can release $85 million to partially settle more than $3 billion in pension-fund claims stemming from the energy trader's 2001 collapse.
U.S. Bankruptcy Judge Arthur Gonzalez in New York said he will make his ruling before U.S. District Judge Melinda Harmon in Houston considers the settlement on Aug. 19. The insurers are asking Gonzalez to authorize release of the funds so the employees can be paid if Harmon approves the settlement.
The settlement could be jeopardized if Gonzalez doesn't authorize the insurance companies to release the money, Britt L. Tinglum, a lawyer representing the employees, said at a hearing in New York. Enron opposed the request, arguing it will deplete its insurance policies and leave the company uninsured.
"I realize there is a time element here, with the Aug. 19 hearing looming," Gonzalez said. "I will do my best to rule by Tuesday." The bankruptcy court has jurisdiction over insurance policy proceeds until Enron exits bankruptcy.
In order to release the funds, Gonzalez will have to lift a provision called "the automatic stay," which prevents creditors from trying to seize a bankrupt company's assets.
If Enron gets its way, the employees may not receive any payment until Enron exits bankruptcy next year. The company recently won approval of a plan to exit bankruptcy.
"$85 million is a valuable piece of Enron's estate," said Brian Rosen, the company's bankruptcy lawyer. "This court should deny lifting the automatic stay to allow the proceeds to be sent to Texas."
Following Enron's collapse, employees filed lawsuits accusing the company's managers of encouraging them to add Enron shares to their 401(k) retirement accounts while senior executives were selling their shares.
Enron filed for bankruptcy in December 2001 after disclosures that billions of dollars in debt was hidden in off-the-books partnerships.
Copyright
© 2002 Global Action on Aging
Terms of Use | Privacy
Policy | Contact Us
|
