Linda Lay, the widow of Enron Corp. founder Kenneth Lay, who died in 2006, has agreed to split two annuity accounts with Enron Creditors Recovery Corp. (ECRC) to settle all remaining litigation between Enron and the Lays. The Lays were sued by ECRC over allegedly fraudulent transfers that preceded Enron's bankruptcy in late 2001. According to the lawsuit, Enron loaned Kenneth Lay money that he repaid with company stock; Enron also agreed to buy some of the Lays' annuities for $10 million, which today are considered worthless. The settlement, which was completed through mediation, was "fair," said ECRC, because Kenneth Lay's estate is insolvent and Linda Lay has "extremely limited" assets. The settlement, which requires court approval, is to be heard July 7 before U.S. Bankruptcy Judge Arthur Gonzalez in New York City (The Official Committee of Unsecured Creditors of Enron Corp et al v. Lay et al, U.S. Bankruptcy Court, Southern District of New York, No. 03-ap-02075).
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