Current and former employees of Enron Corp. and their retirement plan will share $68 million from a partial settlement in a class action lawsuit, according to the Houston Chronicle.
The money will be added to the retirement plans of 12,000 to 20,000 current and former Enron employees, added the paper, but this is not expected until late summer or fall. Plaintiffs’ lawyers will get their cut as well, of course. The full amount of the proposed settlement, which must be approved by U.S. District Judge Melinda Harmon, is $85 million; attorneys are reportedly requesting about $17 million, or 20 percent.
The Chronicle noted that the settlement rivals the expected insurance payout from several Enron insurance policies.
Even so, said 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 Labor announced a $1.5 million settlement with Enron’s outside directors. About 20 percent of that amount will go to the U.S. Treasury; the balance will be added to the employees’ retirement fund.
The Labor 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, explained the paper.