The Northern Trust news release said the settlement in Tittle versus Enron Corp., still has to be approved by US District Judge Melinda Harmon. Northern Trust said it expects its entire liability to be covered by its insurance carriers.
Northern Trust served as administrator for Enron’s 401(k) and employee stock ownership plans. Participants in plans that held Enron shares as an asset sued Northern Trust over its involvement in the case that saw millions of dollars from employees’ retirement savings wiped out in the collapse (See Not Just an Order-Taker ).
“Northern Trust performed its duties prudently and carefully,” said Kelly Welsh, Northern Trust Executive Vice President and General Counsel. “But given the unpredictable nature of litigation in general and the risks associated with Enron-related litigation in particular, we have chosen to put this issue behind us for less than our insurance policy limits.”
As part of the proposed settlement, Northern Trust has agreed to give up any claim it might have against Enron arising out of or relating to the Enron employee benefit plans.
The Tittle case ended up raising a series of significant legal issues concerning the relative responsibility of the various parties involved in a workplace retirement plan (See Divining Line ).