The turnaround ace in charge of rebuilding shattered Enron Corp met with laid-off employees for the first time yesterday, and faced hard questions about what he could do to get them more severance pay.
Interim Chief Executive Officer Steve Cooper spoke at a meeting called by members of Houston's US Congressional delegation, and later briefed reporters on the progress in his planned reorganization of the collapsed energy firm.
Cooper, managing principal of Los Angeles and New York-based turnaround firm Zolfo Cooper, said Enron would likely target its former auditors Andersen, former lawyers Vinson & Elkins and former executives with lawsuits designed to recover damages that would be poured into the reconstituted company.
"Some of the logical targets are our former accountants, possibly [Vinson & Elkins]," Cooper told reporters after the meeting.
"I'm sure there are individuals that will be pursued, and I am sure that there will be some pursued whether it's by the employees committee, the unsecured creditors committee, the company or all of the above."
Cooper said he planned to have a reorganization plan in front of the bankruptcy creditor's committee before the end of the second quarter.
During the meeting, Cooper took nearly all of the employees' questions, and nearly all focused on how much more severance money he could get for them.
Many said they were a month away from losing their homes because they had not found new work yet.
Cooper replied that bankruptcy law precludes him, as head of Enron, from paying out more severance than the US$4,500 maximum allowed.
"It's built into the code what is and is not permissible to pay," Cooper said. "Our hands are tied, just like your hands may be tied at the moment."
One former employee, who has a pregnant wife, said only half-jokingly that Enron's old culture of flouting the rules could be used for good, for once.
"I'm wondering if you could break the law one more time and pay us our severances," former worker Yevgeny Frolov asked, drawing roars of laughter and applause from the crowd.
Cooper laughed, and replied that he would not break the law.
"But as a practical matter, your point is well-taken," he said, and promised support of any efforts to increase worker severance.
However, he said Enron and its lawyers had a fiduciary duty to oppose a motion made in bankruptcy court by a committee of former Enron employees that asks US Bankruptcy Judge Arthur Gonzalez to increase the money that can be paid to laid-off employees.
"The response is, by way of legalese, relatively mild," Cooper said.
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