As a former Enron shareholder, I'm not expecting a huge windfall from a pending class-action suit against the company.
But I intend to claim every last cent of the paltry sum that may be awaiting me.
More than six years have passed since Enron, the former energy-trading giant, filed for bankruptcy, costing its investors as much as $60 billion in market value. The debacle is a historical milestone for American business that's now synonymous with corporate corruption and fraud.
My husband, Ben, and I owned just a tiny fraction of the overall pot -- 50 shares, once valued at about $3,000 -- but we're filling in every line of a claim form that arrived this month in a continuing class-action suit arising from Enron's collapse.
Maybe, somewhere at the end of this tunnel, we'll find a check totaling about $350 -- a figure based on the average $6.79 per share distribution that shareholders who owned common stock are likely to receive.
Last week, the U.S. Supreme Court refused to hear a $30 billion case filed by Enron shareholders against
Credit Suisse First Boston
, which, they allege, schemed with Enron by entering partnerships and transactions that helped the energy giant show revenues while it was actually incurring debt.
The Supreme Court's refusal to hear the case means more empty pockets -- and fewer deep ones -- for shareholders. It's also motivation to grab whatever we can right now.
Sure, it would be a lot easier to toss the packet of legal papers in our recycling bin and walk away from the hassle. But that would only lower the percentage of investors who are enforcing their rights under the settlement.
A low percentage of claims, I think, sends a message that righting the wrongs committed by Enron executives, Arthur Andersen (the company's former auditor), and a slew of financial services firms (including
JP Morgan Chase
) who had a hand in peddling the securities, just doesn't matter anymore.
Michael Donnelly, a principal in Donnelly Steen & Co. Wealth Advisors in Marlton, N.J., says several of his clients and friends have also received the lengthy Enron class-action paperwork.
"We all have a responsibility to participate solely based on the message that a united front might indicate to other companies in the future who have a moral and ethical dilemma and hope that they make a wiser decision," he says.
Donnelly and I share the same views about participating in most other class-action suits -- they're typically a waste of time with few meaningful benefits to the so-called "injured class" they purport to protect.
I've received class action notices over the years -- and I couldn't even understand the basis for filing the action. A suit against
Toys "R" Us
many years ago labeled the rebate program tied to a Toys "R" Us credit card as "deceptive."
How odd, considering I received my rebates without any trouble for all the years I was a cardholder. The amount awarded to "injured" parties? A $25 Toys "R" Us coupon. I'm sure the plaintiffs' lawyers raked in infinitely more cash.
A few years ago, I received notice of my award (if you will), in a class-action suit against
. The suit alleged that the mail-in DVD rental service didn't really offer unlimited DVD rental -- and that the company engaged in tactics to limit the number of movies it sent to subscribers, such as logging in returned DVDs a day or two later than when they arrived.
I always recall my DVDs arriving two days after I mailed in the ones I viewed. My award? It was a free one-month upgrade to the next level of service -- a rental plan for four DVDs instead of three.
Something tells me the lawyers didn't get paid in flicks.
But Enron is far different from these types of claims, which are seemingly devised by plaintiffs' attorneys for their own benefit. The chain of fraud that soaked investors and had a catastrophic impact on thousands of jobs and employee retirement plans permeated the company's C-level, including the office of Kenneth Lay, Enron's now deceased former CEO.
As Donnelly, the financial adviser says, "Each and every shareholder must participate, and complete the paperwork in order to try to recapture a small piece of what so-called 'trusted business executives' and Wall Street banks bilked them out of."
At worst, my family can fund about one-and-half weeks of groceries with my $350 distribution from the $7.2 billion Enron settlement fund. At best, we can buy groceries
have a small voice in the aftermath of an historical event that continues to transform corporate governance standards in America.
The average distribution per share of common stock is likely to increase from $6.79, based on the percentage of shareholders that don't file, according to Patrick Coughlin, the San Diego-based lawyer who represents the Regents of the University of California, lead plaintiff and an institutional investor who claims to have lost $145 million in the Enron disaster.
Lawyers stand to walk away with the most cash in the Enron aftermath -- and just about every other class action suit. Coughlin's firm has requested just less than 10% of the $7.2 billion settlement fund (which has been accruing additional interest for several years). That would be more than $700 million dollars, off the top of the fund, if the court approves.
Our approximate $350 check may pale in comparison.
But it's still our cash and we want it back.
Suzanne Barlyn is a writer in Washington Crossing, Pa.