A proposed $168 million shareholder lawsuit settlement by 18 former Enron Corp. directors who oversaw the company ahead of its 2001 flameout received preliminary approval from a Texas judge Friday, along with two other settlements previously reached with banks.
The agreement with plaintiffs in the conglomerate of lawsuits in Houston — led by the University of California — involves $155 million in insurance proceeds and $13 million from the pockets of 10 of the former directors who sold stock inflated by hidden debt and accounting tricks.
The other settlements given preliminary approval by U.S. District Judge Melinda Harmon were $69 million with the Bank of America Corp. and $222.5 million with Lehman Brothers Inc. The judge will consider final approval in April.
The former directors paying unspecified portions of the $13 million are: Wendy Gramm, wife of former Sen. Phil Gramm, R-Texas, who chaired the Commodity Futures Trading Commission before joining Enron’s board in 1993; Robert Belfer; Norman Blake; Ronnie Chan; John Duncan; Joe Foy; Robert Jaedicke; Charles LeMaistre; Rebecca Mark-Jubasche, who once ran the Enron division overseeing money-losing international assets and then launched a failed water company before being pushed out in 2000; and Ken Harrison, former CEO of Portland General, Enron’s Pacific Northwest utility.
Other former directors who aren’t contributing personal funds to the settlement are: John Mendelsohn; Jerome Meyer; John Wakeham; Charls Walker; Herbert “Pug” Winoker; Frank Savage; Paulo Ferraz-Pereira; and John Urquhart.
None of the former directors are admitting to any wrongdoing.
The directors’ settlement is the fourth reached since the main lawsuit was filed in October 2001, a few weeks before Enron imploded amid revelations of hidden debt, inflated profits and fraudulent accounting. It is the first involving individuals.
Last year the university announced the settlements with the Bank of America and Lehman Brothers. Former Enron auditor Arthur Andersen LLP’s former international umbrella organization, Andersen Worldwide SC, struck a $40 million settlement in July 2002 — a month after Andersen was convicted of altering and shredding Enron-related documents as regulators began investigating the energy company’s finances.
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