DoL Hewitt Contempt Request Dropped After Enron Settlement Reached

March 14, 2008 ( - The US. Department of Labor (DoL) has settled a dispute with Hewitt Associates with an agreement for Hewitt and the Enron Creditors Recovery Corp. to pump $11.2 million into the court-supervised fund to reimburse Enron participants.

A DoL news release said the agreement resolves the agency’s February request for a federal judge to hold Hewitt in civil contempt for having misallocated court-supervised settlement funds owed to Enron employees (See DoL Seeks Hewitt Contempt Order over Enron Fund Disbursement) .The agreement will restore enough money to the funds to permit full payment to the plan participants in keeping with the allocation formula originally approved by the court.  

The fund holds recoveries obtained by the DoL and class action plaintiffs in related lawsuits regarding Enron’s pension plans.  

Early in July 2007 the news broke that Enron employees might have to give back a portion of the initial payment they were awarded as part of a settlement agreement over losses to their employee stock ownership and 401(k) plans that were brought on by the company’s collapse (See Former Enron Workers’ First Settlement Payments Miscalculated ).According to news reports, Hewitt had miscalculated nearly $22 million of the $89 million initial amount – overpaying about 7,700 employees and short-changing about 12,800.

Enron attorney John Strasburger told U.S. District Judge Melinda Harmon in July that Hewitt had used faulty computer software to make the calculations, but the company has been slow in correcting its mistake. Hewitt lawyer Bill Boies told the Houston Chronicle at the time that his client realized its mistake and planned to fix it.