UC Begins Distributing Enron Settlement to Victimized Investors
On Friday (Dec. 19), the University of California begins distributing the largest settlement in the history of securities class actions. This initial stage of the distribution process will distribute almost $5 billion of the $7 billion recovered to approximately 200,000 victims of the Enron fraud, including large institutions such as pension funds.
"We are extremely pleased to be returning these funds to the members of the class," said Charles Robinson, the university's general counsel. "Getting here has required a long, challenging effort, but the results for Enron investors are unprecedented."
The University of California serves as lead plaintiff for Enron investors in their class action against the bankrupt company's various accountants, lawyers and senior executives as well as several banks whose alleged active and knowing participation resulted in the Enron fraud. UC is represented by the law firm Coughlin Stoia Geller Rudman & Robbins LLP.
"We're proud of our role in securing the largest recovery ever obtained for investors victimized by corporate fraud," said Patrick J. Coughlin, the law firm's chief trial counsel. "The distribution of these funds is what it's all about -- getting billions of dollars back in the hands of defrauded investors."
The settlement covers numerous distinct securities types affected by the underlying alleged fraud. This distribution has been calculated in accordance with the allocation plan that the U.S. District Court for the Southern District of Texas approved in September 2008. Before the court approved the plan, investors and the public were invited to comment on its provisions and were able to submit any objections to the court. The court-appointed claims administrator, Gilardi & Co., has calculated distribution amounts in accordance with the approved plan.
Under the allocation plan, eligible investors must have purchased an Enron or Enron-related security between Sept. 9, 1997, and Dec. 2, 2001, and must have submitted a timely claim form. The actual recovery received by class members depends on which Enron securities they purchased and the timing of their purchases and sales, as well as other factors.
This initial distribution is a partial payment to most eligible claimants. The distribution is being conducted in stages because some claims remain in process due to the tremendous number of claims filed and their unique and complex nature. While additional distributions are anticipated, their timing and amount remain to be determined. Additional information for investors about the distribution is available at www.Gilardi.com/Enron/Securities.
UC's "allowed loss" under the allocation plan was approximately $109.4 million. Enron common-stock purchasers will receive reimbursement of approximately 20 percent of their allowed loss -- in UC's case $22 million -- in this distribution. The money will be returned to UC's pension and endowment funds in which the losses occurred.
Investors with questions about the distribution should email email@example.com or write to Enron Corporation Securities Litigation, c/o Gilardi & Co. LLC, P.O. Box 808003, Petaluma, CA 94975-8003.
Continuing litigation: While recovered funds are beginning to be distributed, that does not mark the end of litigation in the case. Claims remain pending against several other defendants in the federal class action lawsuit.
The remaining defendants in the case which was set for trial include Barclays Bank, Credit Suisse First Boston and Merrill Lynch, as well as three former Enron officers -- Jeff Skilling, CEO; Richard Causey, chief accounting officer; and Mark Koenig, executive vice president of investor relations. The cases against Royal Bank of Canada, Royal Bank of Scotland and Toronto Dominion Bank have not been set for trial.