The Daily Sandwich

"We have to learn the lesson that intellectual honesty is fundamental for everything we cherish." -Sir Karl Popper

Location: Boston, Massachusetts, United States


Thursday, July 06, 2006

Lay's survivors may keep his millions

Lovely. The top dogs at Enron wiped out employees' livelihoods in an instant, turning middle-class workers into the working poor with no hope of retirement. But his untimely demise might net his survivors at least $8 million in cash and real estate.

In yet another bizarre twist to the Enron saga, the sudden death of Kenneth L. Lay on Wednesday may have spared his survivors financial ruin. Mr. Lay's death effectively voids the guilty verdict against him, temporarily thwarting the federal government's efforts to seize his remaining real estate and financial assets, legal experts say.

"The death of Mr. Lay in all likelihood will render the government's hard-fought victory null," said Christopher Bebel, a former federal prosecutor based here who specializes in securities fraud. (. . .)

The government's forfeiture effort ahead of the planned sentencing of Mr. Lay and Mr. Skilling this fall, however, has been thrown into doubt, at least in relation to Mr. Lay's assets since the death of a criminal defendant before his sentencing and the appeal process may void the criminal case against him.

"Technically, he was found guilty, but that's extinguished as of today," said Joel M. Androphy, a prominent defense lawyer in Houston.

The article notes that although civil suits against Lay's estate will follow, the timing of his death will make them very difficult to pursue.