It was another week of change for those involved with the current and the former Enron Corp. last week, with ex-employees scoring victories in court, more top executives joining the ranks of the unemployed, and almost all new and old members of the board of directors announcing plans to resign.

The victory for laid-off employees came late Thursday, when U.S. Trustee Carolyn Schwartz informed attorneys for the Severed Enron Employees Coalition (SEEC) that she will appoint an “official committee” to focus on their issues. The committee would have basically the same standing as the 15-member Official Committee of Unsecured Creditors set up to oversee Enron’s assets and debts, which could give the former workers a better chance of recovering benefits.

The SEEC formally had requested the committee appointment in January.

“What can I say? We’re thrilled,” said attorney Scott Baena, of the ruling by Schwartz to appoint an employees committee. Baena had filed the first motion calling for the appointment. “These Chapter 11 cases have the potential to tear the fabric of the nation’s employee retirement system. Undoubtedly, and by no choice of their own, the severed employees are at the forefront of a battle likely to rage in the courts and in Congress for a long time. The Severed Employees are entitled to full and complete representation in every forum where their fate is being decided.”

Currently, there is only one former employee on the unsecured creditors’ committee; the remainder of the committee is comprised of five banks, three indenture trustees, two investment management companies, three trade creditors and one insurance company. The former Enron employee had been an in-house attorney.

In a letter to Baena, Schwartz wrote, “because of issues peculiar to these cases, including the facts that there are more than 20,000 participants in the Debtors’ employee benefits plans and many suits brought relating to the Debtors’ 401(k) plan, I have determined that separate representation is appropriate.” Schwartz has invited SEEC attorneys to make recommendations concerning the specific composition of the new Employees Committee. A similar invitation has been made to Texas Attorney General John Cornyn. Attorneys on behalf of SEEC said they “intend to immediately respond to her request.”

The motion to set up an Employee Committee followed protests last week by a group who had petitioning the U.S. Bankruptcy Court for the Southern District of New York, where Enron’s case is being heard. The group was joined by the Reverend Jesse Jackson and attorneys for the AFL-CIO last week.

“We are here because many laid off Enron employees simply cannot make ends meet,” said Debra Johnson, a former Enron employee. “While a few executives got midnight wire transfers of more than a million dollars, thousands of us cannot afford health care and face eviction from our apartments.”

The Enron personnel manual includes a severance formula for workers laid off due to business reorganization. Enron has paid $4,500 to some employees and nothing to several hundred others, and is not paying any more severance to its laid off employees. The motion filed by the former employees requests the court to order Enron to immediately pay each individual’s severance up to $30,000 — according to the personnel manual formula. Any employees owed more than $30,000 under the severance formula can pursue the remaining severance in court.

A Feb. 27 hearing has been set for the motion. With the new Employee Committee, ex-employee claims will carry as much weight as that of the Creditors Committee, which is worked on unsecured claims also.

Former employees also claimed a significant victory Wednesday when Enron’s new management responded to an appeal from former employees and acknowledged it had the authority to pay $4,500 to the more than 200 laid-off employees who had not yet received any severance. Enron promised that those employees would receive $4,500, minus taxes, by the end of February. Enron also vowed that the company would not oppose today’s motion by former Enron employees.

This decision followed a campaign by the AFL-CIO and Rainbow/PUSH that resulted in thousands of union members faxing Enron to urge the company to pay severance to all its laid off employees. On the eve of filing for bankruptcy, Enron made two sets of bonus payments totaling $105 million. The timing of those payments ensured they would not be reviewed by the bankruptcy court, while the timing of Enron’s mass layoff the day after the bankruptcy ensured that thousands of loyal employees’ would not receive their promised severance money without bankruptcy court intervention, the employees said.

Also last week, two of Enron’s top financial officers, who had already indicated they wanted to resign, were shown the door on Thursday. The two executives, Richard A. Causey, formerly executive vice president and chief accounting officer, and Richard B. Buy, formerly executive vice president and chief risk officer, were terminated effective Thursday as part of the review by the company’s new management of the special investigative report prepared for the board of directors.

Causey and Buy both pleaded the Fifth Amendment when they were called to testify before a House of Representatives committee two weeks ago. The two apparently had wanted to resign, but needed approval from the board of directors because of contracts they had signed promising to remain with the bankrupt company. An internal investigative report, released Feb. 3, indicated the two executives had failed to provide enough oversight on the off-balance sheet partnership transactions.

Meanwhile, in the first board of directors meeting of Enron since bankruptcy was declared, six of the bankrupt corporation’s members, including four serving on the company’s audit committee, announced on Tuesday they would take their planned resignation and will be joined by two more members in March. Also as expected on Thursday, special board member William Powers, who had been appointed to handle the internal investigation, announced he would resign and return to his duties as dean of the University of Texas Law School. Powers completed his report and released it Feb. 3.

Leaving as planned in mid-March will be audit committee members Robert K. Jaedicke, chair of the committee, and Enron’s three foreign-based directors: Hong Kong-based Ronnie C. Chan; Brazil-based Paulo V. Ferraz Pereira; and Lord John Wakeham, a member of Britain’s House of Lords. Enron also disclosed in an SEC filing last week that other directors who plan to leave in March will be John H. Duncan, former chair of Gulf & Western Industries’ executive committee and Charles A. LeMaistre, past president of M.D. Anderson Cancer Center in Houston.

With the resignations, Enron’s board will have eight members. Enron indicated in the SEC filing that it has not selected new board members to replace those leaving, but apparently has asked incumbent members for suggestions.

Still remaining on Enron’s audit committee are board members Wendy Gramm, former chair of the Commodity Futures Trading Commission and John Mendelsohn, current president of M.D. Anderson — but they may be replaced within a few months as well.

Board members Norman Blake, Comdisco CEO, and Herbert Winokur, Capricorn Holdings CEO, are expected to be part of the new restructuring committee, which will be led by board member Raymond Troubh, a financial consultant based in New York who was appointed to the board in November.

In expected news, Enron last week also indicated in a Securities and Exchange Commission filing that anyone holding shares in the bankrupt company may not redeem them for stock in any newly reorganized company, which makes the shares almost worthless except as collectibles. Enron reported that it believed “the existing equity of the company has and will have no value.”

Finally, in a bit of news for those on the Enron watch: a group of ex-employees have formed Mobius Risk Group, geared toward commercial and industrial customers for energy outsourcing services. The company will be headed by Eric Melvin, the new CEO, former vice president in the Value Enhancement Group at Enron Energy Services. Mobius plans to offer energy risk assessment, portfolio and procurement management, utility representation and services and efficiency projects among other things.

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