US Bankruptcy Judge Arthur Gonzalez made the announcement after a contentious three-hour hearing that dealt with paying the bill of State Street, brought in by the US Department of Labor (DoL) to handle Enron’s plans, according to a Houston Chronicle report.
Gonzalez is considering a request from both DoL and Enron to reconsider an earlier ruling that retirement plan members have to pay the charges.
If Gonzalez won’t reverse course, Labor Department and Enron lawyers have proposed that the company simply pay current workers enough to cover the estimated annual $160 per person fees.
One problem in resolving the issue is that about 50% of the retirement plan members have left Enron and can yank their money out if they opt not to pay State Street’s fees. Current employees generally cannot pull out. Should all former employees withdraw, the fees would increase to $320 per member, the Houston Chronicle story said.
Gonzalez did not appear to agree that employee retention was a valid justification.
“The $160, or $320, may add insult to injury already suffered,” he told the lawyers, according to the Chronicle. “But from a purely economic standpoint, it is difficult to imagine that someone would be so frustrated by having to pay $160 they would leave.”
Since Gonzalez has already ruled Enron cannot pay the fees itself, creditors committee lawyer Thomas Arena accused the company of playing a “shell game” by proposing to increase employees’ pay to absorb the cost.
Although the retirement plans sustained substantial losses when Enron’s stock plummeted, they still hold about $800 million in assets, according to the Chronicle.