Some action from one of the many class action lawsuits filed in the wake of the Enron collapse. This one seeks to benefit the retirement fund of current and former Enron employees.
The settlement is at the level of the expected insurance payout from several insurance policies at Enron. But lawyers say it is a victory to get an agreement that the lump sum be given to victims rather than wait and see some or potentially all of $85 million used for defense lawyers for the outside Enron directors and officers who are part of this settlement.
Lynn Sarko, a Seattle-based lawyer for the employees, said this morning that a good piece of the lawsuit will still proceed against ex-Chairman Ken Lay, ex-CEO Jeff Skilling, Enron itself in the bankruptcy court and Northern Trust Co., a bank that worked specifically on the plan and could still be seen as a deep pocket in the case.
"This will be a small piece of the ultimate recovery," Sarko said.
Houston-based lawyer Robin Harrison said the benefit for employees even from this partial settlement "should be something significantly better than the coupons" that plaintiffs sometimes receive in class action style lawsuits like this one.
Also announced today is a Department of Labor $1.5 million settlement with outside directors. About 20 percent of that sum will go to the U.S. Treasury and the rest will also be put in retirement fund of the employees.
The lawsuit is by no means over. Remaining as defendants in the lawsuit are ex-Chairman Ken Lay, ex-CEO Jeff Skilling, former auditor Arthur Andersen, Enron itself in the bankruptcy court, and Northern Trust Co. The plaintiffs complain the defendants breached their fiduciary duty owed to employees under pension laws.
The Labor Department action, filed in June 2003, mirrors the employee lawsuit filed in late 2001. The department charged 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 employee lawsuit goes under the name of ex-Enron employee Pamela Tittle, who was in one of the first groups to sue.