Office of the Attorney General News Release Archive
Wednesday, February 27, 2002
BANKRUPTCY COURT ACTIONS TODAY BENEFIT FORMER ENRON EMPLOYEES
AUSTIN - Texas Deputy Attorney General Jeff Boyd today appeared in a Manhattan federal bankruptcy court opposing a motion by Enron Corp. to allow its liability insurance companies to begin paying legal defense costs on behalf of Enron's corporate directors and officers. The federal bankruptcy judge rejected Enron's motion.
To ensure that Texas' position would be heard and received by the court, the Texas Attorney General's Office elected to attend today's hearing in person rather than join other states in an objection filed by the State of Oregon. As it turned out, the bankruptcy judge refused to accept the other states' support because they had not formally appeared in the bankruptcy proceeding.
The State of Texas appeared last December and promptly moved to transfer venue of the case from New York to Houston. When that motion was denied, Texas successfully sought and obtained the appointment of an official committee to represent the interests of Enron's former employees in bankruptcy suit.
Continuing its efforts on behalf of former employees, Boyd also argued today in support of a motion to increase the amount of severance payments to former Enron employees. The judge did not rule on that motion today.
However, in response to that motion, Enron today agreed to create a $5 million emergency fund to help former employees who are under significant hardship as a result of losing their jobs. The OAG will be coordinating with Enron and the former employees who filed the motion to assist in the creation of that fund.
"Today was a banner day. The court's refusal to approve the spending of insurance proceeds and Enron's proposal to provide $5 million for a former employee emergency fund will both help ensure that the limited available assets will go to those employees who need them the most." Boyd said.
- 30 -
Go to Top