According to a DoL news release, $124.6 million of the cash represents proceeds of the sale of the Enron Corp. bankruptcy claim to Bear Stearns Investment Products Inc., and $9.33 million was paid separately by Enron earlier this month as a distribution for part of the bankruptcy claim.
The bankruptcy claim is the result of a September 2005 settlement between Enron, the DoL, the retirement plans and private plaintiffs in the bankruptcy case. The sale of the bankruptcy claim increases the cash available for distribution to participants in Enron’s retirement plans.
Federal officials had previously announced an $86.85 million settlement with Enron officers and fiduciaries who served on the plans’ administrative committee. Appeals are still pending in connection with that settlement. According to Thursday’s announcement, subject to resolution of the appeals, the sale of the bankruptcy claim increases the total amount paid in this case for the Enron retirement plans to more than $220.8 million.
The agreement resolves the Labor Department’s lawsuit and a private class action suit brought on behalf of the plans’ participants.
The DoL action started in June 2003 with a lawsuit against Enron, its board and corporate officers Kenneth Lay and Jeffrey Skilling. DoL charged that the defendants did not consider the prudence of Enron stock as an appropriate investment for the retirement plans and did nothing to protect the workers and retirees from the company’s eventual financial meltdown.