WASHINGTON Former Enron employees who lost millions of dollars in retirement money in the companys stunning collapse would get $85 million in a partial settlement of their lawsuit, attorneys said yesterday.
In a related development, former company directors have agreed to pay a total $1.5 million to resolve a suit by the Labor Department, attorneys said.
The employees alleged in a class-action suit that the nowbankrupt energy company and its ofﬁcers failed to execute their duties in administering Enrons pension plan. The partial settlement calls for the company employees who were trustees of the plan to hand over an $85 million insurance policy that covered them against liability. It resolves the claims against Enrons human resources staff and directors, but not those against the company itself and Kenneth Lay, who had been Enrons chairman, and former chief executive Jeffrey Skilling.
The Labor Departments civil suit, ﬁled last June, also named Lay and Skilling. The government sought to recover hundreds of millions of dollars in lost employees retirement money, alleging that Enron and its top executives mismanaged retirement plans full of overpriced company stock.
Both suits were ﬁled in federal court in Houston, where Enron had its headquarters, and the settlements must be approved by the court.
Attorneys for the Enron employees said their deal would be the largest settlement ever of a case involving company stock in retirement plans.
This is an excellent result for the class, said Clyde Platt, an attorney with Hagens Berman in Seattle. I look forward to continuing to litigate the case.
Labor Department spokesman Ed Frank had no immediate comment.
More than 20,700 participants in Enrons 401(k) plan had nearly two-thirds of their assets invested in company stock. The suit ﬁled on the employees behalf alleged that they lost more than $1 billion.
The employees attorneys will later propose to the court a plan for distributing money recovered in the settlements to individual employees.