Enron settlement: $7.2 billion to shareholders, $688 million to lawyers

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Enron settlement: $7.2 billion to shareholders, $688 million to lawyers

By KRISTEN HAYS Houston Chronicle Copyright 2008
Sept. 9, 2008, 2:25PM

Eligible shareholders whose Enron holdings became worthless when the company crumbled in scandal will receive $7.2 billion in settlements under a distribution plan approved in federal court. And the California-based law firm that ran massive Enron shareholder litigation for more than six years will get $688 million — plus interest — for its work, U.S. District Judge Melinda Harmon ruled late Monday.

"We're pleased that the court recognizes the tremendous amount of work, skill and determination required to overcome significant obstacles in this complicated case and recover over $7 billion for defrauded investors," said Patrick Coughlin, chief trial counsel for the firm that ran the litigation, Coughlin Stoia Geller Rudman & Robbins.

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

Shareholders eligible for a payout must have purchased Enron stock between Sept. 9, 1997 and Dec. 2, 2001, the day the company went bankrupt. Shareholders who bought stock before that time or after bankruptcy are not eligible.

Firm spokesman Dan Newman said today that attorneys hope they can make a distribution by the end of the year, "and the order approving the plan of allocation is a big step toward that goal."