Ex-Enron Workers Sue Bosses for $72m

Former Enron workers are seeking to recover $72m (£45m) in bonuses paid to senior executives in the hours before the energy firm went bankrupt.

The committee representing employees of the company said the bonuses were awarded to 286 staff in amounts ranging from $20,000 to $5m. The average severance payout for ordinary workers was just $15,000.

"We intend to hold 11th hour bonus recipients accountable for their self-dealing as Enron fell into bankruptcy," said Richard Rathvon, co-chair of the employee committee.

"Even as thousands of regular Enron employees and retirees were facing the loss of life savings, health benefits, their jobs or pensions, these favoured few were scheming to get millions more for themselves."

According to the filing, on the day before Enron filed for bankruptcy, finance director Jeffrey McMahon received $1.5m to stay with the firm for 90 days.

James Fallon, former president and chief executive of Enron Broadband Services received $1.5m, even though the division was never profitable. A further 56 commodity traders and another 228 employees are also named.

The suit argues that because the cheques paid to staff did not clear until after the bankruptcy was filed, they needed approval by the bankruptcy court.

Enron maintained the bonuses were a legitimate means of retaining key staff and keeping the business going after it filed for bankruptcy.

Four lawsuits, which related to the bonuses but had not previously been made public, were filed in a Houston court earlier this year and were recently consolidated into one.

Enron fell into bankruptcy after it emerged the firm had been shifting debt off its books and inflating revenues through dubious accounting.