Enron Settlement Includes $13M from Directors' Pockets

January 14, 2005 (PLANSPONSOR.com) - Eighteen former Enron directors earlier this month agreed to a $168-million settlement of shareholder litigation over the firm's stunning collapse including having to shell out $13 million out of their own pockets.

The personal payments by 10 of the former directors represented profits they received before unloading company stock ahead of the Enron’s announcement that it had been grossly puffing up its sales and profits, according to an Associated Press report.

The latest deal represents the fourth major settlement negotiated by attorneys who filed a class-action lawsuit on behalf of Enron’s shareholders nearly three years ago. Including the latest settlement, the lawsuit so far has retrieved just under $500 million for shareholders, the news report said.

The AP report said that the 10 directors personally paying into the settlement are: Robert Belfer, Norman Blake, Ronnie Chan, John Duncan, Joe Foy, Wendy Gramm, Robert Jaedicke, Charles LeMaistre, Rebecca Mark-Jubasche and Ken Harrison, according to attorneys involved in the case.

Other directors who aren’t personally paying money but were still covered by the settlement are: Paulo Ferraz-Pererira, John Mendelsohn, Jerome Meyer, Frank Savage, John Urquhart, John Wakeham, Charls Walker and Herbert Winokur.

The latest settlement doesn’t include two of Enron’s former chief executives, Ken Lay and Jeff Skilling, both of whom face criminal charges for their alleged misconduct leading up to the company’s late 2001 collapse. Insurance companies will contribute $155 million toward the latest settlement, exhausting the coverage for the company’s directors and officers.