Legal News

Court Revives Suit Against Ken Lay Estate; Enron Lawyers Cash Out Big

By Dan Slater

Ken Lay heads to the federal courthouse, April 19, 2006. (AP Photo/Jessica Kourkounis)

Yesterday brought a host of good news for Enron complainants and their lawyers.

First, the Fifth Circuit revived Texas state-court suits aimed at the estate of the late Enron founder Ken Lay, other company leaders and more than a dozen financial institutions, including Bank of America, Credit Suisse, Barclays and Citigroup.

Second, U.S. District Judge Melinda Harmon awarded almost $700 million in fees to plaintiffs firms in Enron securities litigation. Coughlin Stoia will recover the largest share of that award, which is the largest ever in a securities class action. The plaintiffs in the Enron suit, which was filed in 2001, have recovered $7.2 billion in settlements from bankers, accountants and lawyers alleged to have participated in a scheme to defraud investors.

Here’s the WSJ report. Click here and here for Judge Harmon’s rulings.

The financial institutions already have settled the state-court lawsuits, as have many individual defendants, according to G. Sean Jez of Fleming & Associates, a Houston firm that brought the lawsuits, although the amount of the state-court settlements hasn’t been disclosed.

The Fifth Circuit ruling reversed the earlier ruling that barred Fleming from suing in state court. The appeals court said the law firm moved in time to save those potential claims, and it is now up to a Texas state court to decide what happens to the lawsuits.

Full post as published by Law Blog - WSJ.com on September 09, 2008 (boomark / email).