Month: June 2003

Perkins & Coie provides more great information: “Practical Guidance on Section 302 and Section 906 Certifications From the SEC’s Final Rules Release.” The article provides a sample Form 11-K Section 906 certification which has been modified to reflect that the “fairly presents” language relates to only the “net assets available for benefits and changes in net assets available for benefits of the plan.” Perkins & Coie reminds readers that, in other contexts, “the SEC has specifically stated that altering the text of a required certificate invalidates the certification.” The article also remarks that many companies are going ahead and having the CEO and CFO make the certification, instead of the chair of the employee benefits committee or other committee which oversees the plan(s).

Read more about this here . . .

“Delaware Court Warns Directors and Officers on Oversight of Executive Compensation: In re The Walt Disney Company Derivative Litigation”: Perkins & Coie has posted this regarding the decision, In re The Walt Disney Company Derivative Litigation, which was discussed in a previous post here. The article provides practical steps for boards of directors to take to avoid a Disney-like result.

Reish, Luftman McDaniel & Reicher has published this article by Nick White, Bruce Ashton and Fred Reish: “IRS Issues Update On EPCRS Rev. Proc. 2003-44.”

The Houston Chronicle has this article by Eric Berger: “Former Enron employees welcome Labor suit.” The article discusses the separate class action lawsuit filed some time ago by former Enron employees which you can read about here. The article reports that lawyers for the former employees in the class action suit said “having a government agency endorse many of the same legal theories will only bolster their case.” The article also reports that “[t}he biggest pot of money available is probably $85 million in liability insurance Enron had purchased for those responsible for Enron’s retirement plans.”

More on Enron ERISA litigation here . . .

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 . . .