HOUSTON -- A federal appeals court Tuesday upheld former Enron Corp. CEO Jeff Skilling's convictions for his role in the once-mighty energy giant's collapse but vacated his 24-year prison term and ordered that he be resentenced.

A three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans denied Skilling's request to overturn his convictions. Skilling argued his conviction was invalid because of what his lawyers argued was incorrect legal theory, faulty jury instructions, a biased jury and prosecutorial misconduct, including accusations of witness intimidation and withholding evidence.

While denying those arguments, the judges agreed that U.S. District Judge Sim Lake erred by applying guidelines that resulted in a prison term of 24 years and four months and ordered that Skilling be resentenced.

Skilling is serving his time, the harshest punishment doled out in Enron's scandalous collapse, in a federal prison in Minnesota.

Skilling was convicted in May 2006 on 19 counts of fraud, conspiracy, insider trading and lying to auditors for his role in the collapse of Houston-based Enron, once the nation's seventh-largest company.

One of the witnesses in his trial was former Enron employee Sherron Watkins.

"I'm relieved, as I think others are also, that the convictions were upheld. This appellant court has overturned some of the Enron convictions in the past and the concern was that they might do the same with Jeff Skillings' conviction," she said.

Skilling is the highest-ranking executive to be punished for the accounting tricks and shady business deals that led to the loss of thousands of jobs, more than $60 billion in Enron stock value and more than $2 billion in employee pension plans after the company imploded in 2001.

Company founder Kenneth Lay also was convicted of conspiracy, fraud and other charges, but he died less than two months later of heart disease and his convictions were vacated.

Prosecutors won their convictions of the top two men at Enron by arguing that Enron employees were bound to serve honestly and not put their interests ahead of the company's. If they failed to do so, they deprived the company of "honest services" and committed a crime.

Prosecutors argued Skilling's actions were dishonest and contrary to the needs of the company's shareholders and its financial stability.

But when Skilling attorney Daniel Petrocelli argued his appeal before the 5th Circuit in April, he characterized his client as a loyal employee who at times might have bent the rules, but only for the company's benefit.

Petrocelli argued that while Skilling might not have done his job appropriately, he did not commit a crime.

The 5th Circuit has overturned several Enron-related convictions that were based on the honest services theory, ruling that executives did only what Enron wanted them to do and did not profit at its expense.

Some legal experts had thought that the honest services argument was Skilling's best chance at overturning some or possibly all of his convictions.

"I would expect Judge Lake to resentence Jeff Skilling to somewhere in the area of 15 years as opposed to the 24 years plus he received the first go-round," said Brian Wice, KPRC Local 2's legal analyst.

Enron wiped out many employee retirements, such as Tom Padgett.

"Well, we're surviving. That's all I can say," he said.

Padgett lost over 30 years of savings in the Enron meltdown. He does not think he and thousands of others should be forgotten when Skilling gets a new sentence.

"He and a lot of other people he worked with destroyed the lives of a lot of people and you know he could sit in jail for the rest of his life and to me it wouldn’t be enough," Padgett said.