- The Washington Times - Friday, January 31, 2003

HOUSTON, Jan. 31 (UPI) — Texas Attorney General Greg Abbott plans to fight Enron's request that a bankruptcy judge approve $29 million more in bonuses for critical workers.

Abbott believes Enron needs to first explain how it has spent $140 million in previously approved bonuses and severance payments, the Houston Chronicle reported Friday.

Federal Bankruptcy Judge Arthur Gonzalez will hear arguments on the Enron request Thursday in New York City. Enron argues the bonuses are necessary to retain 900 workers critical to the company's plans to pay creditors.

Texas has a claim of about $75 million and total claims exceed $60 billion.

"Enron spent out a whole lot of money and there's been no demonstration of what taxpayers or investors got for it," Abbott said. "This seems to be more of the old Enron spirit of 'Just trust us, we know how to spend the money.' That was offensive when it was done initially, and it continues to be offensive."

The $29 million in bonuses would begin March 1 and bind workers to Enron for another year.

The previous $140 million package kept the workers through the end of February. It included $40 million to retain 1,285 employees, $90 million in incentive bonuses for critical employees, and $7 million in severance for about 842 employees.

"Our goal is to maximize value for our creditors. Our efforts to do that will be severely hindered if we have a mass exodus of employees after Feb. 28," said Karen Denne, an Enron spokeswoman.

Enron is liquidating contracts and auctioning off assets, such as pipelines and power plants, to raise funds. Last year the company said contracts, along with related assets, could yield as much as $6 billion to $9 billion by the year 2004.

Abbott wants Enron to justify the need for the new bonus money and explain why officials believe the workers will leave if they don't receive bonuses.

Enron argues some workers are critical because they have the knowledge needed to liquidate the company's trading books, respond to 20 investigations and resolve bankruptcy claims, according to court records.

Enron has set new records for spending on bankruptcy lawyers and accountants, racking up more than $300 million to date, according to the Chronicle.

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