Compromise reached on Enron figures' assets

Prosecutors had sought the freezing of $64 million pending fraud trial in Oct.

December 25, 2003|By BLOOMBERG NEWS

HOUSTON - Former Enron Corp. broadband division executives have reached a compromise with prosecutors who sought to freeze about $64 million of their assets pending a fraud trial scheduled to begin in October.

Under the agreement, one former executive agreed not to sell or mortgage his house, and restrictions weren't placed on three other defendants' homes, defense lawyer Lee L. Hamel said yesterday.

"It was an interim matter that had to be addressed because the government was seeking pre-trial restraints in disposition of assets," Hamel said.

A copy of the agreement hasn't been released by U.S. District Judge Vanessa Gilmore in Houston.

Enron sought bankruptcy court protection in December 2001 after restating $586 million in revenue because of improper accounting tied to off-book partnerships. It was the largest U.S. bankruptcy by debt, with creditors seeking $67 billion.

The government sought to freeze the assets of former Enron Broadband Services Inc. Chief Operating Officer Kevin Hannon, former Vice President Scott Yeager and former executives Kenneth Rice and Joseph Hirko, said Hamel.

The agreement "varies by defendants," with "restrictions on certain assets in return for concessions by the government on use of those assets," said Hamel, who represents Yeager and didn't have a copy of the agreement, which was being changed to reflect modifications made at hearings in federal court in Houston.

U.S. attorneys in Washington and Houston didn't immediately return calls seeking additional details on the settlement.

Hannon, Yeager, Rice and Hirko were charged in April with insider trading and criminal conspiracy to commit securities fraud, according to court electronic records.

Shares of Enron were unchanged at 3 cents in over-the-counter trading in New York yesterday.

The shares traded as high as $90 in August 2000, before Enron's troubles became public.

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