Traders' £24m to unwind Enron contracts

About 100 traders at Enron Europe are to share an incentive pool of around £24m to help the company's administrators recover cash from unwinding the company's trading books.

"You have to appreciate that with this business, a lot of the information is in the business and a hell of a lot of information is in people's heads as well," said Neville Kahn, one of the company's administrators at PricewaterhouseCoopers.

Tony Lomas, another of the PwC partners, said it was not "unusual" to make such arrangements and had judged that the overall impact would be "to increase the realisations" for creditors.

The pay-off was unveiled in a series of meetings between PwC and Enron Europe's creditors and came just days after it emerged that 15 senior employees at the group's energy trading arm shared in a £6m pay-out for helping with the sale of Enron Direct to Centrica.

The administrators also confirmed yesterday that they hoped to recover between $750m and $1bn, before costs, of cash although they admitted that the figure could be "substantially" more.

So far, they said, the bulk of that, around $670m, had been raised already from selling off various assets, including Enron Direct and Enron Metals, and from settling trade contracts. Mr Kahn said about £100m had been recovered so far from traded contracts but he was expecting another £25m to come through in the near future.

He said he believed that realisations from those contracts would have been "minimal" were it not for the £24m incentive pool granted to the 100 Enron traders.

PwC said, however, that because of the complexity, it was not possible "at this point in time" to give creditors an accurate estimate of the likely outcome. "The creditors don't yet know how much they feel they're owed either," Mr Lomas said.

The next asset sale on the chopping block, they said, was Henry Bath, a metals warehousing unit with operations in the US, UK, Italy, the Netherlands and Singapore.

While they expected to have resolved "a large part" of the process in another six months, they warned the affair could take "many months or years" to resolve in full.

PWC said it plans to meet committees representing the creditors every two to three months and would officially report back in writing to creditors every six months.

The administrators said there were no "secured" creditors but there were a "small" number of "preferential" creditors, comprising mainly employees and directors.