Ken Lay's wallet gets lighter every day

The ongoing legal battle isn't the only fallout of the Enron collapse for ex-Chairman Ken Lay: According to The New York Times, Lay may have to file for bankruptcy protection because his net worth has plummeted to less than $650,000, down from a high of $400 million when Enron was still flying high.

Lay's fortune has been eaten away, sometimes piece by piece and sometimes in large chunks, by a variety of things: the company's stock troubles, the failure of his retirement fund, legal bills and potential liability from lawsuits. His primary assets now are a $1.9 million trust expected to be drained by legal fees, $4.2 million in real estate and $220,000 in other liquid assets. His retirement benefits are estimated at $3.5 million, down from a high of $68 million. All that goes to show that Lay didn't benefit from Enron's collapse, his lawyer said:

"Ken Lay put his money where his mouth was," Mr. Ramsey said. "He held as many shares of Enron stock as he possibly could. He never sold, other than by forced sale, which led to his financial ruin. Ken was a company man to the end. And he suffered all the financial consequences of that decision, along with all the other employees, who he has deep sympathy for because he shared their fate."

Hmm. Well, he didn't exactly share their fate: He still has lots of money, even if he might lose it. But we'll go with that.

Lay has already spent $25 million on his legal defense and will probably spend $30 million by the time it's all over, the Times reports. Almost half his total assets — $4.2 million — is tied up in real estate, mostly his full-floor penthouse at The Huntingdon, which he could be forced to forfeit if he's convicted. In total, Lay has $10.6 million in assets and $9.9 million in liabilities. Should we feel sorry for him? Probably not, one expert said:

In the end, legal analysts said that the collapse of Mr. Lay's personal finances seemed a natural result of the way his wealth was formed: through the growth of a company that proved to be a management debacle.
"We shouldn't feel guilty for enjoying the fact that these people are no longer wealthy," said Stephen Meagher, a former federal prosecutor who is now a lawyer in private practice in San Francisco. "I find it hard to feel bad for Ken Lay. Many, many other people lost their wealth and were put into poverty by the Enron collapse. But whether he is guilty is a question for a jury."