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19

Enron Workers Found What They Lost

Houston judge Melinda Harmon approved the settlement between Enron's insurers and about...

Thousands of former Enron workers have been awarded $85m to replace lost pensions, overcoming the objections of the former chief executives Kenneth Lay and
Jeffrey Skilling, The Guardian reported. They argued the cash should have been used for their legal defence.

Houston judge Melinda Harmon approved the settlement between Enron's insurers and about 20,000 former employees of the energy firm, which went bankrupt in late 2001.

Workers at Enron who held their pensions in shares of the company were prevented from selling in the weeks ahead of the bankruptcy, and many were left with nothing.

Enron, once listed as the seventh biggest company in the United States, was found to have been routinely creating false revenues and hiding debts through a series of off-balance sheet entities.

Mr Lay and Mr Skilling face criminal trial next January on charges including conspiracy and fraud. Both have denied any wrongdoing and argued that the funds used in the workers' settlement came from Enron's corporate insurance policies that were to be used to help pay their legal costs. Mr Lay was famously a friend of the president, George Bush.

Lawyers for the workers had expressed concerns that a long court battle with the insurers would have used up the available cash. They had argued that the workers were owed as much as $1.5bn.
"The settlement at this point would save great expense and would give the plaintiffs hard cash, a bird in the hand," Judge Harmon wrote in her ruling.

Lynn Sarko, a lawyer for the former Enron workers, said the settlement money would be paid in proportion to the losses suffered from holding Enron stock in their pensions. "There will be people who get tens of thousands of dollars," he said.
About $69m will reach the employees. Lawyers fees had reached $17m.