Filing seeks to transfer Enron case to Houston

Filing seeks to transfer Enron case to Houston

Copyright 2001 Houston Chronicle
Dec. 4, 2001, 9:58PM

Enron's bankruptcy case should be moved to Houston from New York so its many employees and former employees living here can take part in the proceedings, attorneys representing participants in Enron's 401(k) plan argued in a court filing Tuesday.

"It is important to note that these are not people who have an interest in the bankruptcy because of the usual employee claims for pay and routine benefits," the attorneys, including Lynn Sarko of Seattle and Robin Harrison of Houston, wrote in the motion.

"Because of Enron's encouragement of employees to invest their retirement savings in company stock, these class members are more directly and humanely affected by this bankruptcy than anyone else."

The attorneys, who have also brought suit against Enron Corp. on behalf of 401(k) participants, noted that few employees and former employees live in the Northeast. In Enron's bankruptcy case, retirement fund members are among the list of creditors.

Bankruptcy experts have said it is likely Enron chose New York for its Chapter 11 filing because the bankrutpcy judges and lawyers there are used to handling complex cases and because it allows the company to avoid masses of current and laid-off employees showing up at hearings.

But the chance of getting the case moved is "very, very remote," said Jack Williams, a professor at the Georgia State University College of Law and scholar-in-residence at the American Bankruptcy Institute.

Practically speaking, the debtor gets the right, though not set in stone, to choose its forum, he said, adding that it would take compelling evidence to overturn it.

An Enron spokesman said the company has business operations and about 250 employees in New York.

Meanwhile, a committee to represent Enron's creditors is being created.

An alternative to moving the bankruptcy case is for the judge to set up a separate committee or committees to represent the interests of current and former Enron employees, said Nancy Rapoport, dean of the University of Houston Law Center and a bankruptcy specialist.

That could happen if the judge finds that those creditors have significantly different interests from others.

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