Author: jfortenberry@fortenberrylaw.com

CFO.com offers this article–“Expensing Options: Better Now Than Later: Study claims many companies will be hurt by waiting for FASB to act?“–by Lisa Yoon. The article refers to a study by Buck Consultants which you can read about here. The study reports on the negative impact of the “wait and see” approach to stock option expensing. According to this press release, the study has this finding:

“High technology companies forced to adopt stock option expensing guidelines in 2004 will experience a median decrease in fiscal year 2003 earnings per share (EPS) of approximately 20 times greater than companies that voluntarily adopt these guidelines before a December 2003 deadline.”

CFO.com’s article makes a good point though about the pending legislation which would put a three year moratorium on stock option expensing if the legislation ever makes its way through Congress. You can read about this legislation here.

More about stock option expensing here . . .

Note to Readers: For those who have not noticed, I maintain another blog called “ERISAblog” which focuses solely on ERISA (without the tax and benefits coverage contained in Benefitsblog). For those wanting to read about the ERISA litigation without wading through all of the other benefits and tax items, ERISAblog is the place to go. I am also categorizing the ERISA posts in a more detailed way at ERISAblog and have further plans for ERISAblog to be revealed later . . .

Today’s Federal Register is here and contains temporary and proposed regulations under Internal Revenue Code (the “Code”) section 382 and provide guidance on whether a loss corporation has an ownership change where a qualified trust described in Code section 401(a) (a qualified trust) distributes an ownership interest in an entity.

More on the Chao v. Enron Corporation et al. lawsuit filed yesterday . . .

Kirstin Downey for the WashingtonPost reports: “Restitution Sought From Enron Officials.” The article quotes Marc Machiz, a former Labor Department lawyer in charge of pension programs, as stating that “the lawsuit could have ramifications for the “30 to 40″ private lawsuits moving through the courts that allege that executives exhorted workers to buy stock that subsequently fell in value.” The article quotes Mr. Machiz as stating further that workers at many other companies were hurt as badly or almost as badly as at Enron, including those at WorldCom Inc., Global Crossing Ltd., Williams Cos. and Dynegy Inc.

The Associated Press for the Boston Globe reports in this article: “US sues Enron over pension losses: Ex-executives, directors also targeted in attempt to recover millions.”

I am reviewing the DOL Enron complaint filed yesterday and will report on it here shortly. In the meantime, you can read more on the lawsuit here . . .

The Associated Press has this article for Yahoo! News: “More Wealthy People Avoided Taxes.” The article refers to this report (which you can access here) recently released by the Internal Revenue Service.

The following articles report on the Chao v. Enron Corporation case filed today by the Department of Labor:

• Findlaw.com has this article by Leigh Strope for the Associated Press: “Labor Department Sues Enron Over Pensions.”
  
• Reuters has this article by Peter Szekely: “US Sues to Recoup Enron Workers’ Pension.”
  
• USAToday reports: “U.S. suing Enron, former execs over pension losses.”
  
• Bloomberg.com provides this account: “U.S. Sues Enron, Former Officers Over Pension Losses.”

In this article by the Houston Chronicle–“Enron facing pension lawsuit; Former executives called negligent”–Eric Berger reports that Rep. John Boehner, R-Ohio, chairman of the House Education and Workforce Committee, praised the lawsuit and stated:

“The Department’s action puts corporate executives and pension plan administrators on notice: Take your fiduciary duty to act in the best interests of your workers seriously or the Labor Department will hold you accountable.”