Enron Employees Reveal the Depth of Financial Losses.Business Editors, Legal Writers
WASHINGTON--(BUSINESS WIRE)--Dec. 18, 2001
Attorney underscores the damage of the 401(k) lockdown Lockdown
A specified period when an employee of a public company is barred from selling - and occasionally buying - their company's stock.
These types of equity transaction restrictions can be imposed by securities regulators or underwriting firms if a company has
In a Senate hearing today, employees of Enron (NYSE NYSE
See: New York Stock Exchange : ENE) provided details of the personal toll the company's downfall has taken, outlining the financial devastation they claim was caused by illegal mismanagement mis·man·age
tr.v. mis·man·aged, mis·man·ag·ing, mis·man·ag·es
To manage badly or carelessly.
mis·manage·ment n. and lockdown of Enron retirement plans.
Steve Berman This article is about the writer. For the lawyer, see Steve Berman (lawyer); for the Mayor of Gilbert, Arizona see Steven M. Berman.
Steve Berman is an American writer, born in Philadelphia, Pennsylvania, and now living in New Jersey. , an attorney representing Enron workers, including some who testified at the Senate hearings, said "we are just beginning to understand the impact of the company's collapse on thousands of Enron workers across the country."
"In two short months, Enron snuffed out the future that thousands of workers built over a lifetime," Berman said. "Millions of dollars in retirement funds were erased in what we believe was an illegal and unconscionable Unusually harsh and shocking to the conscience; that which is so grossly unfair that a court will proscribe it.
When a court uses the word unconscionable to describe conduct, it means that the conduct does not conform to the dictates of conscience. lockdown of employee 401(k) accounts."
Berman noted that the stories from his clients are among the most heartbreaking he has heard. He provided several examples of Enron employees' plight in his written testimony to the committee.
"These people are not venture capitalists, or high-rolling investors. These were lunch-pail people who worked hard, day-in and day-out for their entire lives," Berman said.
The testimonies brought tearful examples of Enron employees left out in the cold since the bankruptcy. One retired oil and gas worker in California lost more than a million dollars from his Enron savings plan. Unable to return to work in the oil and gas industry, he now makes garbage bags 12 hours a day to support himself.
For some Enron employees, the situation is literally life-and-death. A Wisconsin woman battling stage IV breast cancer may not be able to afford future cancer treatments, which were funded by her savings, now largely wiped out by the stock collapse.
The lawsuits filed by Hagens Berman also contend that Enron repeatedly issued false information about the company's financial condition, which employees relied upon to their financial detriment. In an attempt to inflate Enron revenue, earnings and assets, the company failed to disclose hundreds of millions of dollars in debt while touting the financial strength of the company, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. the complaint.
The suit also cites Northern Trust, (Nasdaq: NTRS NTRS NASA Technical Report Server
NTRS National Therapeutic Recreation Society
NTRS National Technology Roadmap for Semiconductors
NTRS National Technology Readiness Survey ), the 401(k) plan trustee, along with Enron, claiming both companies illegally barred Enron employees from selling stock. On Oct. 17, Enron and Northern Trust locked down employee retirement funds, rendering participants powerless in selling shares of Enron stock.
At the Senate hearing, employees recounted how Enron management encouraged them to invest in the company, despite SEC records that show management selling off their investments in Enron. Charles Prestwood, a 63-year-old retired Enron employee who had $1.3 million of savings invested in Enron stock, described internal memos touting the company stock, and a breakfast where CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Kenneth Lay Kenneth Lee "Ken" Lay (April 15, 1942 – July 5, 2006) was an American businessman, best known for his role in the widely-reported corruption scandal that led to the downfall of Enron Corporation. "told us not to sell our Enron stock."
It is estimated that as many as 21,000 Enron employees may have lost a significant portion of their retirement funds as a result of Enron's breaching of fiduciary duty Noun 1. fiduciary duty - the legal duty of a fiduciary to act in the best interests of the beneficiary
legal duty - acts which the law requires be done or forborne and lockdown of 401(k) accounts, according to complaints filed in U.S. District Court, Southern District of Texas.
Hagens Berman has filed two lawsuits on behalf of Enron employees, one for participants in the Enron Savings Plan, and another for participants in the Enron Employee Stock Ownership Plan. Enron employees who are interested in joining these class-action lawsuits can receive more information by calling 206-623-7292, or going to www.hagens-berman.com.
About Hagens Berman
Steve Berman is managing partner of Hagens Berman in Seattle. Recently cited as one of the nation's top 100 influential attorneys by The National Law Journal, Berman is a nationally recognized expert in class-action litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. . Berman represented Washington State, 12 other states and Puerto Rico in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. Berman also served as counsel in several other high-profile cases including the Washington Public Power Supply litigation, which resulted in a settlement exceeding $850 million, and the proposed $92.5 million settlement of The Boeing Company litigation. Other cases include litigation involving the Exxon Valdez oil spill The Exxon Valdez Oil Spill is considered one of the most devastating man-made environmental disasters ever to occur at sea. Prince William Sound's remote location (accessible only by helicopter and boat) made government and industry response efforts difficult and severely taxed ; Louisiana Pacific Siding; Morrison Knudsen; Piper Jaffray; Nordstrom; Boston Chicken; and Noah's Bagels.
EDITOR'S NOTE: Copies of written testimony from the Senate hearings are available by contacting Mark Firmani at (206) 443-9357 or firstname.lastname@example.org