Employees and retirees of Enron Corp. will receive $133.95 million in cash to be distributed through the company's retirement plans, Labor Secretary Elaine Chao announced this afternoon.
According to a Labor Department news release, $124.6 million will come from the proceeds of the sale of the Enron bankruptcy claim to Bear Stearns Investment Products, and $9.33 million was paid separately by Enron earlier this month as a distribution for part of the bankruptcy claim. The sale of the claim increases the amount of cash available for distribution and converts an illiquid claim in the bankruptcy court to cash assets, according to the release. David James, Labor Department spokesman, did not return calls requesting comment or further details.
The agreement, which resolves the Labor Department's lawsuit and a private class-action suit brought on behalf of the plans' participants, was approved by the U.S. Bankruptcy Court for the Southern District of New York.
In June 2003, the department sued Enron, its board of directors, Kenneth Lay, Jeffrey Skilling, Enron officers and the plans' administrative committees for mismanagement of the retirement plans, in violation of ERISA. The lawsuit claimed the defendants failed to consider the use of Enron stock as an appropriate investment for the retirement plans and did nothing to protect the workers and retirees from significant losses. The agreement does not resolve the department's claims against Messrs. Lay and Skilling, according to the release.