[JURIST] The sudden death of former Enron CEO Kenneth Lay [JURIST report] on Wednesday presents the legal system, Lay's family and Lay's own legacy with major challenges, according to a University of Houston law professor who closely followed the trial that led to Lay's conviction this spring. In a Thursday op-ed on JURIST, Professor Nancy Rapoport [faculty profile] says that the criminal case against Lay is now void, and because federal agents had not yet seized Lay's assets under a forfeiture order [motion text, PDF] filed Friday [Washington Post report], the victims of fraud will have to seek compensation through civil remedies. In anticipation of plaintiff victories, she suggests that Lay's wife Linda consider filing Chapter 11 bankruptcy to "avoid any piecemeal attachment of assets." Under 2005 amendments to the Bankruptcy Code [text], Linda Lay could probably protect up to $125,000 of the value of her house from creditors if "reasonably necessary for the support of the debtor and any dependent of the debtor."

The greatest consequence of Lay's death, according to Rapoport, may nonetheless be the lost opportunity to redeem himself:

Lay never had a chance to progress through his appeal, and from there, either to vindication or to possible rehabilitation while serving his time. His death freezes his iconic image as corporate villain, even though other similarly vilified corporate miscreants have overcome (at least, to some degree) their sullied reputations.

Citing the examples of Mike Milken [Business Week report] and, to a lesser extent, Martha Stewart, Rapoport suggests that Lay could have written books, educated other inmates and, most importantly, accepted his culpability in the Enron collapse and the resulting damage to stockholders. In the end, though, we will never know what might have become of him after conviction. Read the full op-ed.