Two lawsuits filed against some of Enron Corp.’s former management team and outside directors were partially settled this week. One will give ex-employees $85 million from an insurance policy, while another brought $1.5 million for fines and the ex-employees’ fund. Both lawsuits still require court approval, but they are only partial settlements; claims against former Chairman Kenneth Lay and ex-CEO Jeffrey Skilling remain unresolved.

In the class action lawsuit, former Enron employees will receive $85 million to resolve claims against Enron’s human resources department and company directors, but not Lay and Skilling. The ex-employees allege that Enron and its officers failed to execute their duties in administering the company’s pension plan, and the partial settlement requires Enron to relinquish an insurance policy.

The lawsuit alleges that the former workers lost more than $1 billion when the company went bankrupt in Dec. 2001. It also claims that they were not informed about the company’s worsening financial situation in late 2001 and were blocked from pulling out of the retirement fund for a period of time as the stock spiraled downward.

In partial settlement of the Department of Labor lawsuit, which was filed in June 2003, former outside Enron directors agreed to pay $1.5 million to recover a portion of the lost retirement fund. The lawsuit, which also is ongoing with Lay and Skilling, alleges that Enron and its management team mismanaged retirement plans that were funded with overpriced company stock.

The Labor Department specifically alleges that outside directors failed to appoint a trustee to manage the company’s stock held by the employee stock ownership plan, which was separate from Enron’s 401(k). Under the settlement with the Labor Department, up to $300,000 of the $1.5 million would be paid as a penalty by the former directors and the remainder, $1.2 million, would go to the ex-employees.

If approved by the court, the settlement with outside directors would be one of the largest ever, according to attorneys for the ex-Enron employees. More than 20,700 of the employees participating in Enron’s 401(k) plan had invested two-thirds of their plan in company stock.

Neil Eggleston, who represents the outside directors, said Wednesday that the former outside directors “are pleased that this part of the Enron tragedy is being resolved and that funds can now flow to the plan participants.”

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