Legal News

At Long Last, Enron Shareholders Set to Cash Out

By Dan Slater

While the current financial crisis may be delivering a blow to some investors, it looks like some shareholders from the last crisis may finally see a payout. Over the weekend the Houston Chron reported that, nearly seven years after Enron shareholders watched their investments go poof, lawyers at plaintiffs firm Coughlin Stoia are scrambling to begin distributing a $7.2 billion civil settlement before year’s end.

“People here are working tirelessly to get this money back in the hands of the defrauded investors before the end of the year,” said Dan Newman, a Coughlin Stoia spokesman. He said details were still being worked out, but the firm aims to distribute 80 per cent of the money in multiple disbursements by the end of December.

Under the plan, which was approved in September, eligible shareholders must have purchased Enron stock between Sept. 9, 1997, and Dec. 2, 2001, the day the company went bankrupt. The plan outlines procedures to distribute the money to about 1.5 million individuals and entities, such as pension funds. Investors who bought common stock during the eligibility period stand to receive an average of $6.79 per share, while those who purchased preferred stock can receive an average $168.50 per share.

The $7.2 billion settlement is the largest ever amassed in U.S. securities litigation, according to the Securities Class Action Clearinghouse at Stanford University. The second-largest was $6.1 billion in WorldCom litigation.

Full post as published by Law Blog - WSJ.com on November 18, 2008 (boomark / email).