£36m windfall for 'key' Enron staff

AILING US energy trader Enron reportedly gave key staff bonuses totalling $55m (£36m) just days before it filed for bankruptcy and sacked thousands of workers, many of them without severance pay.

The group, which collapsed with debts of around £22bn, confirmed it had paid 'retentive incentives' to crucial employees. It declined however to confirm the $55m figure nor reveal who received the cash. The New York Times said 500 employees had benefited.

Bankruptcy lawyer James Feder, said the payments 'are substantially high', and would probably become an issue in the bankruptcy case. 'The question might come up as to whether there was fair consideration given for the amount of these bonuses and whether they were reasonable under the circumstances.'

Enron applied to a New York court over the weekend for Chapter 11 bankruptcy, which will allow it continue operating while its creditors try to sort out its finances. It secured a $1.5bn lifeline from banks JP Morgan Chase and Citigroup earlier this week.

The firm's fall from grace was sparked six weeks ago when a discrepancy in its accounts prompted an investigation by US financial watchdogs and a slump in the firm's share price. Enron later admitted its profits between 1997 and 2001 were $600m lower than had been claimed. Job cuts included 1,100 staff who were sacked in London last week, without redundancy money or notice payment.