U.S. court orders Enron's Skilling resentenced

By Anna Driver

HOUSTON (Reuters) - A U.S. court upheld the 19 felony convictions of former Enron Corp President and Chief Executive Jeffrey Skilling stemming from his role in the collapse of the energy trading company, but said he must be resentenced.

The ruling, handed down by the U.S. Court of Appeals for the Fifth Circuit in New Orleans on Tuesday, said the lower court erred when applying federal sentencing guidelines, so the former executive could now receive a shorter sentence.

Skilling, who was convicted along with former Chairman Kenneth Lay in May 2006 on conspiracy and fraud changes, is serving a 24-year term at a minimum security prison in Colorado. His lawyers could not immediately be reached for comment.

The court ruled Skilling must be resentenced but that is a largely a technicality, said Jacob Frenkel, a former federal prosecutor now in private practice at Shulman Rogers in Rockville, Maryland.

"The bedrock of the case is intact. This guy is staying in jail - the court upheld the conviction," Frenkel said.

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Skilling's lawyers had argued in lengthy appeals that all 19 of the counts against the executive should have been tossed out because government prosecutors had used a flawed legal theory to win the case.

Skilling's attorney also said that the Houston jury was biased and the prosecutors in the case acted improperly.