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Partial settlement reached in Enron case

HOUSTON, MAY 13. The employees of Enron Corp. who lost money in their retirement plans when the energy giant collapsed in late 2001 will receive some reimbursement as per a $85 million settlement of a class-action lawsuit.

The money will be added to the retirement plans of 12,000-20,000 current and former Enron employees, according to the Houston Chronicle, but this is not expected until late summer or early next year. The full amount of proposed settlement reached yesterday, which must be approved by the U.S. District Judge, Melinda Harmon, is $85 million.

It noted that the settlement rivals expected insurance payout from several Enron insurance policies.

According to Lynn Sarko, a lawyer for the employees, the remainder of the lawsuit will still proceed against former chairman, Kenneth Lay, former chief executive officer, Jeffrey Skilling, Enron itself (in bankruptcy court), and Northern Trust Co., a bank that worked on the plan and seen by many as having deep pockets.

"This will be a small piece of the ultimate recovery," Sarko told the Chronicle.

Meanwhile, the Department of Labour announced a $1.5 million settlement with Enron's outside directors. About 20 per cent of that amount will go to the U.S. Treasury; the balance will be added to the employees' retirement fund.

The Labour Department action, which is similar to the employee lawsuit, asserted that Lay, Skilling, and others misled employees about the value of Enron's stock and did not properly monitor the committee appointed to manage Enron's retirement plans, the paper said.

PTI

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