According to a news release from the US Department of Labor, though the settlement calls for $12 million, the final recovery will depend upon the total amount of assets in the estate available for distribution. Lay, a central figure in the scandal that plagued Enron, died July 5.
On June 26, 2003, the Labor Department sued Lay and others for mismanagement of the plans in violation of the Employee Retirement Income Security Act (ERISA). The department alleged that Lay:
- failed to properly oversee the fiduciaries he appointed to run Enron’s plans,
- misrepresented Enron’s financial condition to employees and plan officials, and
- encouraged the purchase of Enron stock when he knew it was imprudent to do so.
More than $220.8 million has been recovered for the pension plans in previous settlements obtained by the Labor Department and private plaintiffs from Enron, its directors, officers and fiduciaries who served on the plans’ administrative committee.