Friday, August 3, 2007

University of California to distribute $7.2 Billion from Enron Lawsuit

Not much to do with our industry, but interesting nonetheless. Read the last line about the interest being collected...

Money to reach plaintiffs in late 2008

The University of California, lead plaintiff in the class-action lawsuit against executives and accounting firms responsible for the Enron fraud, announced on Friday a proposed plan to distribute $7.2 billion to defrauded Enron investors."The $7.2 billion recovery for the victimized shareholders is the largest settlement in the history of securities law," said Dan Newman, spokesman for Lerach Coughlin, lead counsel in the Enron case.


It is estimated that 1.5 million stock and bond purchasers lost more than $40 billion in the Enron fraud, according to a press release issued by the UC Office of the President. Among the public institutes, the UC system suffered a loss of $145 million from its purchase of 2.2 million Enron shares during the class period between Sept. 9, 1997 and Dec. 2, 2001."The university had a substantial loss in its pension plan in late 2001 because we had a large investment in Enron," said Chris Patti, attorney in the University General Counsel Office. "


As a result, the regents decided to actively take a role in recovering as much money as possible for the investors."Since being named lead plaintiff in the lawsuit by the U.S. District Court in February 2002, the University of California has collected $7.2 billion on behalf of the class of Enron investors. The settlements include $69 million from Bank of America, $2 billion from Citigroup, and $2.2 billion from JPMorgan Chase.


The UC Board of Regents is currently seeking public input about the details of the proposed Plan of Allocation. The complete plan can be found on and comments must be submitted no later than Aug. 20 by mail or online.After reviewing public comments, the university will seek input from the investors before seeking judicial approval. The plan will then go through another series of reviews before actually being dispersed. The earliest time of distribution is late 2008. Until then, the $7.2 billion is accruing an interest of $500,000 per day.