Enron Examiner: Lay, Accountants Liable

HOUSTON -- Enron Corp.'s former chief Ken Lay, its lawyers and accountants should all be held liable for claims against the bankrupt energy giant, a bankruptcy court examiner said in a report filed last Monday, Reuters reported.

Lay, Enron's former chairman and chief executive, could be liable for $94 million related to a loan from the company he paid back illegally with Enron shares, according to the examiner, Neal Batson. The report, the fourth and final publication by Batson, was submitted to the bankruptcy court hearing claims against Enron.

Lay and Jeff Skilling, Enron's former president and chief operating officer, both breached their legal duty to properly supervise several "special purpose entities," according to the report. Enron used dozens of such entities to hide billions of dollars in debt while fraudulently boosting its income.

Skilling could also be liable for a $2 million loan he paid off with Enron stock, it said.

Andersen, the now-defunct accounting firm brought down because of its role in advising Enron in manipulating its books, committed "professional negligence," Batson said in the report.

-- NYSSCPA.org News Staff

Posted on 12/1/03

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