The sudden death of Enron founder Kenneth L Lay may have spared his family members from financial ruin, a media report said on Thursday.
Lay's death effectively voids the guilty verdict against him, temporarily thwarting the US government's efforts to seize his remaining real estate and financial assets, the New York Times quoted legal experts as saying.
"The death of Lay in all likelihood will render the government's hard-fought victory null," Christopher Bebel, a former federal prosecutor based in Houston, told the paper.
But while the death of Lay may have limited government efforts in his criminal case, he remains the subject of civil lawsuits by the Securities and Exchange Commission and former investors and Enron employees.
Those lawsuits could still proceed with the aim of taking control of some of Lay's remaining assets, the report said.
Lay and Jeffrey K Skilling, the two chief executives who guided Enron through its rise and fall, were found guilty in May of fraud and conspiracy, and were freed on bail pending their sentencing.
Just last Friday, the paper said the Justice Department had moved to seize a total of $183 million in assets belonging to the two men. The bulk of those assets belong to Skilling.
Five years ago, Lay's personal fortune was valued as high as $400 million. But a large part of that was tied to the value of Enron's stock, which is now virtually worthless, the daily said.
Ex-Enron chairman Kenneth Lay is dead
Lay testified at his trial that his net worth had declined to liabilities of $250,000, hampered by mounting legal bills and poor-performing investments. But his finances were apparently not so dire, the report said.
According to legal documents filed at the federal courthouse Friday, Lay had holdings in an investment account at Goldman Sachs valued at $6.3 million. In addition, prosecutors said that Lay's full-floor luxury apartment in this city's River Oaks district valued at $1.5 million could be forfeited to the US, the report said.
The government's forfeiture effort ahead of the planned sentencing of Lay and Skilling this fall has been thrown into doubt, at least in relation to 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," the paper quoted Joel M Androphy, a prominent defence lawyer in Houston, as saying.
A person involved in the government's action told the paper that Lay's death did not necessarily rule out proceeding with forfeiture actions, explaining, "The family at the end of the day cannot sit on the fruits of the fraud."
"Even if the verdict is nullified, he paid for his actions with his life. That is more tragic," he said.
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