According to the DoL announcement, under the agreement, Skilling will drop his opposition to a previous $85 million settlement, waive his right to benefits from Enron’s pension plans and be permanently barred from serving in a fiduciary capacity to any employee benefit plan governed by ERISA in the future. Skilling is already subject to an order of forfeiture obtained by the Department of Justice’s Enron Task Force on October 23 requiring the establishment of a $45 million restitution fund for victims of Enron-related fraud, including plan participants and securities investors.
The DoL’s settlement also provides that, if Skilling’s convictions are overturned or vacated and the restitution fund is dissolved, he will still pay $2.5 million to the participants and beneficiaries in the company’s savings and employee stock ownership plans plus $500,000 in penalties to the department, the announcement said.
On June 26, 2003, the DoL sued Skilling and others for mismanagement of the plans, alleging that Skilling failed to properly oversee the fiduciaries appointed to run Enron’s plans and failed to correct misstatements about Enron’s financial condition made by former Enron chief Kenneth Lay to plan participants. Skilling also was sued as a member of Enron’s board of directors for failing to properly appoint and monitor a trustee to oversee the employee stock ownership plan.
More than $220.8 million has been recovered for the pension plans from Enron, its directors, officers and fiduciaries who served on the plans’ administrative committee. In September, the DoL and private plaintiffs obtained a $12 million claim against Lay’s estate (See DoL Works out $12M Enron Settlement with Lay Estate). Lay died on July 5. The final recovery will depend on the total amount of assets available for distribution from the estate.