Former Enron workers to get pension settlement

HOUSTON - - Former employees of bankrupt energy trader Enron Corp. reached a tentative $85 million settlement to cover lost retirement packages, the Enron employees' lawyer said recently.

The settlement, which would be the largest ever recovered for stock losses in retirement plans, was negotiated with Enron's human resources committee and outside directors who acted as fiduciaries for the employees' stock plans, the lawyer for the former workers, Lynn Sarko, told Reuters.

The settlement represents a fraction of the value of the employees' retirement packages that was lost when Enron imploded in 2001 amid charges of bogus accounting practices.

Under the terms of the settlement, the committee and outside directors will call on the company's insurers Associated Electric & Gas Insurances Services (AEGIS) and Chubb Corp.'s Federal Insurance Co. to pay out on the $85 million policy that Enron had taken out to cover employees that acted as fiduciaries, Sarko said.

The settlement does not include outstanding suits filed against Enron, former Chairman Ken Lay, former Chief Executive Jeff Skilling, Northern Trust and accountants Arthur Andersen, Sarko said.

"This settlement is the tip of the iceberg of what is to come," he said.

Enron was not immediately able to comment on the settlement.

The settlement will go before a U.S. District Court judge in Houston on May 20.

Prior to the recent settlement, the largest payout had been Global Crossing's $79 million settlement with employees, said Sarko, who acted as lead attorney in that case.