SEEC Finds Place at Bankruptcy Table

February 15, 2002 ( - In yet another unprecedented event in the Enron case, it now seems that a group of Enron workers will get a voice at the bankruptcy table.

According to the Severed Enron Employees Coalition (SEEC), US Trustee Carolyn Schwartz has informed the group’s attorneys that she has decided to appoint an “official committee to focus on the issues relating to (Enron) employees”. 

That decision comes just 16 days after SEEC formally requested the appointment of such a committee.

Different Approach

One former Enron employee, Michael Moran, currently sits on a 15-member Official Committee of Unsecured Creditors – a committee comprised of five banks, three indenture trustees, two investment management companies, three trade creditors and one insurance company.

However, Moran was an in-house attorney for Enron, and is representing a group of some 100 former Enron workers in pursuit of their deferred compensation benefits.

The US trustee of the bankruptcy court formed the committee to negotiate with Enron during its bankruptcy.

That representation was itself unique, and highlighted the potential risks of unsecured deferred compensation programs embraced by employers as an alternative to retirement savings programs such as 401(k)s. The offer to SEEC would appear to be yet another extension of protection for worker benefits that are not generally addressed in bankruptcy determinations.

Peculiar Issues

In a letter to SEEC attorneys, Trustee Schwartz, citing “?issues peculiar to these cases, including the facts that there are more than 20,000 participants in the Debtors’ employee benefits plans and many suits brought relating to the Debtors’ 401(k) plan,” wrote that separate representation is appropriate.

Ms Schwartz has invited SEEC attorneys to make recommendations on the specific composition of the new Employees Committee, according to the group.