Former Enron shareholders got a little payback last month when a federal judge approved the distribution of $7.2 billion in settlements. Like so much else about Enron, the case is historic, representing the largest settlement ever in U.S. securities litigation, according to the Securities Class Action Clearinghouse at Stanford University.
"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," Patrick Coughlin, chief trial counsel for Coughlin Stoia, told The Houston Chronicle.
Who landed in the money? Shareholders who purchased Enron stock between September 9, 1997, and December 2, 2001, the day the company went bankrupt. But "in the money" is a relative term: the average per-share payout is $6.79 ($168.50 for preferred shares).
About $6.6 billion of the $7.2 billion came from JPMorgan Chase, Citigroup, and the Canadian Imperial Bank of Commerce, which the suit claimed participated in the accounting fraud that led to Enron's downfall. Also kicking into the kitty was, among others, LJM2, a former partnership once run by former Enron CFO Andrew Fastow to do deals with Enron.
In the Money
$7.2 billion: Distribution amount approved by federal judge
$6.6 billion: Amount absorbed by JPMorgan Chase, Citigroup, and Canadian Imperial Bank of Commerce