U.S. says Enron agrees to 356 million for pension claims

WASHINGTON, D.C. - Enron Corp agreed to put a $356.25 million price tag on government and employee claims against the fallen energy giant's retirement plans, the U.S. Labor Department said recently.

But the department stressed that since pending bankruptcy court claims against the Houston-based company exceed its assets, payouts to retirement plan participants will be in the "tens of millions of dollars," rather than the full value of the $356.25 million settlement.

"This agreement makes possible a significant recovery for Enron retirees and their families," Labor Secretary Elaine Chao said in a statement.

The agreement settles claims by the department and Enron retirement plan participants that charged Enron, its directors, officers and administrators with violating federal retirement law in the way they managed the company's 401(k), employee stock ownership and cash balance plans.

"How much we get depends on how much is in the estate," said a department official who asked not to be identified. "It won't be 100 cents on the dollar because the amount of claims against Enron exceeds the assets."

The settlement must be approved by a U.S. bankruptcy court in New York, where Enron filed for protection after its stock collapsed in 2001, and by a U.S. District court in Houston, where the department and plan participants filed claims two years ago, the department said.

Enron emerged from Chapter 11 bankruptcy proceedings last year as a private entity that is liquidating its remaining assets to pay its debts under court oversight.

Also signing onto the settlement were a committee of Enron creditors and State Street Bank and Trust of Boston, which was hired to oversee Enron's retirement plans after the company's collapse, the department official said.

Of the settlement's total value, $305.36 million was assigned to claims involving the 401(k) and employee stock ownership plans and $50.89 was assigned to claims involving Enron's cash balance retirement plan.

The department said the agreement does not settle its claims against former Enron Chairman Kenneth Lay and Chief Executive Officer Jeffrey Skilling, which were part the suit.

Lay and Skilling also face a criminal trial in January 2006 for their role in the company's demise. Both have pleaded not guilty.

Other Enron officers, directors and administrative committee members who were sued for mismanagement of the employee benefit plans already paid $86.85 million under settlements with the department and private plaintiffs that were reached last year.

A key victory for retirement plan participants in the settlement was to avoid being placed behind other Enron creditors who are seeking to recover their claims in bankruptcy court proceedings, the department official said.

"The Enron participants are going to be treated the same as other unsecured creditors who were wronged by Enron," the official said.