November 26, 2001 — Enron employees are suing the beleaguered company for the loss of much of their retirement account value after Enron stock plummeted.
The lawsuit, filed in U.S. District Court in Houston by Seattle-based law firm Hagens Berman, alleges that Enron encouraging its employees to invest heavily in Enron stock without warning them of the risks involved.
Enron’s stock was down from a high of $90 per share in August 2000 to $4.74 on Friday, following a series of damaging financial disclosures.
An employee mentioned in the lawsuit against Enron reported his 401(k) account, which was heavily weighted toward Enron stock, fell in value from $470,000 a year ago to about $40,000 today, seriously damaging his plans for retirement in the next few years, Reuters News Service reported.
Enron now is in merger talks with Dynegy. The company said Wednesday it has closed on the remaining $450 million of a previously announced $1 billion in secured credit lines in preparation for the merger.
Another lawsuit against Enron, filed by another Seattle-based law firm, alleges that another Enron employee lost $140,000 on Enron stock held in her retirement account.
According to that suit, the Enron retirement savings plan had assets worth $2.1 billion at the end of last year, including $1.3 billion, or 62 percent of the total, in Enron stock..