DEPARTMENT OF LABOR ANNOUNCES $356 MILLION SETTLEMENT WITH ENRON OVER RETIREMENT LAW VIOLATIONSJul 12, 2005 | www.newsinferno.com
The collapse of Enron Corp. in 2001 had a devastating effect on company retirees and their families. It was not long after Enron’s fall that charges emerged concerning mismanagement of the company’s 401(k), employee stock ownership, and cash balance plans. These claims involved alleged violations of federal retirement law provisions by company directors, officers, and administrators.
In announcing the agreement between the Labor Department, Enron retirement plan participants, and the remnants of the Houston-based company, an unidentified official of the department was quick to point out that the true amount of the settlement will be substantially less than the face-value of $356.25 million.
Since the amount of the claims pending against Enron in federal bankruptcy court far exceed the company’s remaining assets, the payout will likely be in the “tens of millions” instead of anywhere near $356 million. In addition, the settlement must be approved by the bankruptcy court in New York. Presently, Enron is a private entity which is liquidating its remaining assets under bankruptcy court supervision.
The settlement does not dispose of claims against Enron’s former Chairman (Kenneth Lay) and CEO (Jeffrey Skilling). The two also face a criminal trial in January 2006. Last year, other officers, directors, and administrative committee members agreed to pay $86.85 million in settlement of similar claims.