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The committee representing Enron Corp.’s former employees in its bankruptcy case is attempting to recover $72 million in bonuses paid to 286 employees, officers and executives of the company in the final hours before Enron filed for bankruptcy. “We intend to hold 11th-hour bonus recipients accountable for their self-dealing as Enron fell into bankruptcy,” said Richard D. Rathvon, co-chair of the employees’ committee. Four lawsuits, filed by the group earlier this year in federal bankruptcy court in Houston and recently consolidated, say the individual bonuses ranged from $200,000 to $5 million. The bonuses infuriated laid-off employees, who received relatively small severances, Rathvon said. “Even as thousands of regular Enron employees and retirees were facing the loss of life savings, health benefits, their jobs or pensions, these favored few were scheming to get millions more for themselves.” The employees’ committee says the checks paid to the employees did not clear Enron’s account until after the bankruptcy was filed, so the payments were not authorized by the New York bankruptcy court handling Enron’s case and should be returned. Employees who lost most of the value of 401(k) accounts packed with now-worthless Enron stock are suing dozens of individual former Enron executives in a class action lawsuit in federal court in Houston. But the retention bonus lawsuits are unique in that they seek those funds handed out as Enron was failing — and they go further down the food chain. Houston-based Enron collapsed into bankruptcy in December 2001. Company executives have said the bonuses were paid on the eve of bankruptcy to retain some workers. Enron spokesman Mark Palmer did not immediately return a call Wednesday to The Associated Press seeking comment. After a lengthy investigation, the four lawsuits were filed by the employees’ committee in March, April and May, McClain said, but had not been reported. One lawsuit names Jeffrey McMahon, who became chief financial officer after Andrew Fastow stepped down in October 2001. According to the employee committee and papers filed in the lawsuit, McMahon signed a contract Oct. 25, 2001 and received a $300,000 payment in exchange for a commitment to stay at Enron for six months. On Nov. 29, the last day of business before the bankruptcy filing, McMahon amended his employment agreement. The following day, he received $1.5 million to remain 90 days with Enron, through February. Another lawsuit names James Fallon, former president and CEO of Enron Broadband Services, who also received a $1.5 million payment Nov. 30. Enron’s broadband unit was never profitable, and Enron laid off broadband employees when downsizing the unit months before the bankruptcy. A third lawsuit names 56 commodity traders and the final legal action names 228 traders and other employees. Copyright 2003 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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