According to the Houston Chronicle, Former Enron chief operating officer Greg Whalley allowed dozens of Enron executives to cash out of their plan in October and November 2001.
A group of about 180 former Enron employees is considering suing Whalley in state court over the denied deferred compensation plan distributions.
When Enron filed for bankruptcy on December 2, about $435 million left in the accounts was frozen.
Whalley’s lawyer, Michael Levy, told the Chronicle that as the deferred-compensation plan’s administrator, Whalley was performing his fiduciary duty to Enron by differentiating between plan members who remained and those who had left.
Enron’s deferred compensation plan allowed members to defer up to 30% of their income and all of their bonuses to save on taxes, much like a 401(k) plan, although the company held the money in a trust.
Enron changed the plan’s rules in 1997 to let members of some of the plans cash in early by taking a 10% penalty.
But many of the retirees say they were not aware of the change and the former workers who asked to cash out only happened to learn of it from friends still at the company who had been alerted by Enron’s human resources department.