NEW YORK -- Enron Corp., the energy trader that filed the second-biggest bankruptcy in U.S. history, won court approval to pay as much as $45 million in bonuses to employees who are responsible for winding down the company's operations.
Enron, which is selling its assets to raise $12 billion to repay creditors, estimates that employees will ultimately receive about $16.8 million in bonuses. The Houston company will cease to exist once the asset sales are finished.
U.S. Bankruptcy Judge Arthur J. Gonzalez authorized the payments after the company said it needs to give employees an incentive to stay with Enron until the liquidation is complete.
"They are effectively working themselves out of a job," Brian Rosen, Enron's lead bankruptcy lawyer, said at a hearing in New York. "Once all of the assets are sold, their employment ends and they are not entitled to any severance payments."
Under the terms of the plan, the employees will receive 1.5 percent of the liquidation proceeds. Enron estimates proceeds from the remaining asset sales will total approximately $1.1 billion, which would mean employees receive $16.8 million, Rosen said.
Gonzalez authorized bonuses of as much as $45 million if the proceeds reach $3 billion or more.
Enron, once the world's largest energy trader, filed for bankruptcy protection after improper accounting forced the company to restate $586 million in earnings. Its shares lost $68 billion in value from their peak in 2000 to its December 2001 bankruptcy filing. A judge ended the company's bankruptcy protection in November 2004.
Former chief executive Jeffrey K. Skilling and former chairman Kenneth L. Lay were charged by federal prosecutors with conspiracy and fraud last year for allegedly concealing debt in off-the-books partnerships that allowed Enron to boost revenue artificially. Skilling and Lay have pleaded not guilty to all charges.