Asset Seizure Halted By Lay's Death

by Glen Shapiro, LawAndTax-News.com, New York

10 July 2006

The death of former Enron chairman Kenneth Lay last week is likely to halt the federal seizure of his assets, and may give an unexpected boost to co-conspirator, Jeffrey Skilling's appeal.

Mr Lay was earlier this year found guilty of conspiracy and fraud in connection with the firm's spectacular collapse, and died of a heart attack last week at his holiday home in Colorado.

The jury in the four-month trial of Lay and former chief executive Jeffrey Skilling in May found the two men guilty.

Lay was convicted on six counts of conspiracy and fraud, and US District Judge Sim Lake added another four counts of bank fraud and making false statements to banks to his convictions.

Skilling, meanwhile, was found guilty on 19 of 28 counts of conspiracy, fraud, insider trading and misleading the firm's auditors.

Sentencing in the case was expected to take place in September, with both men slated to receive lengthy prison sentences.

However, according to reports, a Fifth Circuit appeals court recently ruled that if a defendant dies before the appeals process has been exhausted, everything associated with the case is extinguished, "leaving the defendant as if he had never been indicted or convicted".

Observers have suggested that as a result of this ruling, Mr Skilling's legal team may argue that his conviction is based on evidence from a case which no longer exists.

Regarding the seizure of Mr Lay's assets (the value of which is disputed), although federal prosecutors may find their efforts thwarted, several civil cases are still pending against the Lay estate.

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