HOUSTON, Jan. 28 (UPI) -- Attorneys for a group of more than 400 present and former Enron employees said Monday they have filed a federal class action lawsuit to regain lost savings.
The Severed Enron Employees Coalition wants a jury to "make good" the losses suffered by those employees who contributed to Enron's 401(k) Corporate Savings Plan, the lawyers said.
"Enron executives were profiting from an elaborate shell game, using the hard-earned retirement savings of their loyal employees," said attorney Randy McClanahan, a member of the legal team. "We plan to show that the people running Enron's 401(k) retirement plan disregarded the very employees that federal law requires they protect."
The coalition is said to be the largest independent, volunteer organization representing the more than 4,500 laid-off Enron employees. The lawsuit was filed Friday in U.S. District Court in Houston.
The defendants include former Chief Executive Officer Kenneth Lay, who may have received $101 million from the sale of Enron stock; former CEO Jeffrey K. Skilling, who is believed to have received $67 million from the sale of company stock, and former Chief Financial Officer Andrew Fastow, who may have received $30.4 million from the sale of Enron stock, according to the lawsuit. Northern Trust Co., the retirement plan's trustee, and Arthur Andersen, L.L.P., the Enron accounting firm, also were named as defendants.
The defendants strongly encouraged Enron employees to invest in company stock but failed to warn them of the company's shaky financial condition, the lawsuit alleges. The defendants placed restrictions on the employees' ability to sell the stock in their 401(k) plans and as a result many of the workers suffered heavy losses when financial irregularities were discovered at Enron.
"It's well known that Enron executives 'hid the ball,'" said coalition co-chairman Rod Jordan. "They structured financial dealings in such a complicated and impenetrable manner that even the most veteran Enron employees had no way of discerning the company's true financial status. Believe me, if we had any idea, we would have directed our life savings elsewhere."
In addition to representing the rights of those who lost money in the Enron's retirement plan, the coalition also is working to win Enron employees a greater voice in the Enron bankruptcy, which is filed in New York federal court. Currently, there is only one employee representative assigned to a committee of general, unsecured creditors, the attorneys said.
