According to MarketWatch, Lynn Sarko, a lawyer for the humbled energy giant, a tentative agreement has been reached that would allow a $356.2 million claim to be made against the bankrupt company to resolve employee suits over stock losses in their retirement plans. Because unsecured creditors – a group that includes workers suing over pension fund losses – will receive 18% of the claim when the company sells its assets, this will likely result in a $64 million payout to workers who lost much of their retirement savings when the company stock plummeted after the 2001 accounting scandal.
This agreement would bring the total amount recovered by former company employees to $150 million. A similar settlement was reached last year with former and current employees of the company regarding their pension losses (See Settlements Reached in Enron Suits ). At the time, Sarko had warned that “this will be a small piece of the ultimate recovery.”
It is estimated that as whole, employees lost $3 billion in retirement funds when the company stock fell, according to MarketWatch.
The settlement will resolve a Labor Department suit over the losses, according to Sarko. The agreement must be approved by both a federal judge in Houston, where the company was based, and in New York, where the company filed for bankruptcy.
The settlement does not prohibit workers from continuing their claims against Enron executives Kenneth Lay and Jeffrey Skilling, who will both be put on trial in January 2005 for criminal conduct in relation to the company’s collapse.