A US court has declared Enron chief executive Kenneth Lay innocent on charges of fraud and conspiracy – three months after his death. Lay died on July 6, after his conviction on 10 charges of conspiracy, fraud and making false statements, but before he could be sentenced by the court in Houston. According to the judge in the case, it is standard practice to wipe out convictions if the criminal dies before he has a chance to appeal.

The move is going to make life difficult for Enron creditors and the SEC, who will not now be able to cite Lay's conviction in May in their attempts to recover assets from his estate through the civil courts. Effectively, they will now have to convict him again – although US civil courts require only a "balance of probabilities" standard, rather than the "beyond reasonable doubt" proof necessary in a criminal case.

It could also harm his (still alive and therefore still guilty) colleague Jeffrey Skilling – prosecutors had been going after $43.5 million of Lay's assets when the conviction was vacated, and will now seek to extract the money from Skilling instead, who is already being pursued for another $139.4 million. Skilling was convicted in May and will be sentenced on Monday, October 23.