Lawyers representing more than 400 current and previous Enron employees have filed a class action lawsuit in Houston, naming several Enron executives, Enron's auditor Big Five firm Andersen, and the Northern Trust Company as defendants. The Northern Trust Company is the trustee for Enron's retirement plan.
The plaintiffs are asking to be compensated for losses incurred in their 401(k) retirement plans due to the rapid decline in value of Enron stock as a result of actions of Enron executives. "Enron executives were profiting from an elaborate shell game, using the hard-earned retirement savings of their loyal employees," stated Randy McClanahan, one of the lawyers representing Enron employees in the suit. "We plan to show that the people running Enron's 401(l) retirement plan disregarded the very employees that federal law requires they protect."
Enron employees have filed several lawsuits against officials of the beleaguered energy company and its auditors. Enron itself is not named as a defendant. The company filed for Chapter 11 bankruptcy in December and is protected from legal action while the bankruptcy is proceeding.
Andersen CEO Expresses Concern, Confidence
Meanwhile, in a published statement on Monday, Andersen Chief Executive Officer Joseph Berardino stressed the point that the 85,000 members of the Andersen worldwide firm are "appalled by what happened" regarding the Enron situation. He referred to the 85,000 "honest, hard-working people of Andersen" as victims "who are still being hurt by (Enron's) fallout."
Mr. Berardino stated that the Chicago-based firm is taking steps to find out what its auditors knew about Enron's situation, when they knew it, and what the auditors believed they were accomplishing when they destroyed documents.
Mr. Berardino met with the press on Monday, forecasting that Andersen will survive the Enron situation, in spite of a recent loss of clients. "People who know us well continue to hire us and stand by us. People who don't know us as well are less anxious, frankly, to hire us. Yes, we've lost business," Mr. Berardino said. But, he added, "We feel very confident that we can get through this."