|  | | 2007 News and Press Releases | | |
SETTLEMENT NEWS:
Never-ending Story: Enron Botches Payout, Reportedly, retirement reimbursement calculations were based on the wrong stock price—but a discrepancy remains regarding where blame should be placed.
Stephen Taub
CFO.com. July 5, 2007
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EXCERPT: Talk about adding insult to injury. More than 20,000 former Enron employees who received a partial payment for retirement funds they lost due to the scandal were told that they were either overpaid or underpaid because of a software snafu, according to the Associated Press. As a result, some of the former workers may have to give back a portion of the money if they were overpaid. Last year, ex-Enron employees received about $89 million in the first payment that is part of a lawsuit settlement related to losses suffered by workers who participated in the company's employee stock ownership and 401(k) plans, said the AP. The payment pool was set up after the company collapsed in 2001 to remunerate affected employees. However, nearly $22 million of the payment was miscalculated, according to Harlan Loeb, spokesman for what is now known as Enron Creditors Recovery Corp. About 7,700 former workers were overpaid while about 12,800 were underpaid, according to the wire service. The final tally will be announced after a recalculation is completed. Loeb blamed the problem on a software program provided by Hewitt Associates, a compensation consultancy hired to distribute the settlement proceeds. He said the wrong stock price was used, according to the report. Enron officials said Hewitt had acknowledged that "virtually none" of the plaintiffs received the right amount in the distribution, noted the Houston Chronicle. Maurissa Kanter, a spokeswoman for Hewitt, told the AP that the company is focused on "working diligently with Enron to ensure that this matter is resolved as soon as possible for the plan's participants and beneficiaries." |
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