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EBSA News Release: [09/07/2006]
Contact Name: David James or Gloria Della
Phone Number: (202) 693-4676 or x8664
Release
Number: 06-1514-NAT
U.S. Department of Labor Announces $12 Million Settlement
With the Estate of Kenneth L. Lay
WASHINGTON — The U.S. Department of Labor today announced an agreement with the estate of Kenneth L. Lay granting a $12 million claim against his estate on behalf of participants covered by Enron's pension plans. Lay died on July 5, 2006. This proposed settlement must be formally documented and submitted for approval to the U.S. District Court for the Southern District of Texas.
Although the proposed settlement provides a $12 million claim against the estate, the final recovery will depend upon the total amount of assets available for distribution from Lay's estate. The agreement does not settle the Labor Department's claims against Jeffrey K. Skilling.
On June 26, 2003, the Labor Department sued Lay and others for mismanagement of the plans in violation of the Employee Retirement Income Security Act. The department alleged that Lay failed to properly oversee the fiduciaries he appointed to run Enron's plans, misrepresented Enron's financial condition to employees and plan officials and encouraged them to buy Enron stock when he knew that it was imprudent to do so. Lay was also 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.
In previous settlements obtained by the Labor Department and private plaintiffs, 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. The recoveries are subject to the resolution of certain appeals as well as attorneys' fees and expenses, and do not include any recovery obtained from Lay or Skilling.
The department's suit resulted from a comprehensive investigation conducted by the Dallas regional office of the department's Employee Benefits Security Administration and the Office of the Solicitor of Labor.
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