In the incendiary case that taught all of America the importance of 401(k) diversification, it seems that some
The estate of co-founder Kenneth Lay, who died in July just before sentencing, is expected to settle a lawsuit brought by thousands of the energy company's former employees claiming that Lay and former Chief Executive Jeffrey Skilling failed to adequately diversify the company's 401(k) selection, and relied too much on Enron's own stock.
As a result, when the company imploded in 2001, the retirement accounts of thousands of employees were wiped out with losses totally hundreds of millions of dollars.
If Lay's estate settles as expected, Skilling will be the only remaining defendant. Enron is in bankruptcy proceedings.
How much Lay's estate will contribute is still unknown, but many speculate that the settlement is an attempt for Lay's family to put the case behind them. Before his death, Lay claimed that the criminal case left him $250,000 in debt, although he still had a home valued at $5 million and a $6 million investment account at
"It basically says that the Lay family is ready to resolve their differences and pay a fair percentage of their responsibility," said Joel Androphy, a defense attorney in Houston.
The estate is still embroiled in a shareholder lawsuit and another from the
Skilling's sentencing is scheduled for Oct. 23. Prosecutors are expected to demand he had over $183 million he allegedly profited through fraudulent bookkeeping.
Now left as the lynchpin in the employee suit, Skilling is not expected to settle soon, if at all, Androphy said.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.