Reuters, 5 December 2006
A U.S. federal judge, who originally dismissed claims against Barclays Plc in a $40 billion lawsuit, ruled Enron Corp. investors may file an amended complaint detailing charges that the bank helped hide financial misdeeds that led to the energy giant's collapse.
In July, U.S. District Judge Melinda Harmon in Houston dismissed Barclays from the civil lawsuit, which has netted more than $7 billion for investors, including $2 billion or more each from Canadian Imperial Bank of Commerce, J.P. Morgan and Citigroup Inc.
But on Monday, Judge Harmon wrote in an opinion that the plaintiffs, who are represented by powerful class-action attorney Bill Lerach, may file another complaint that includes more detail about Barclays' transactions with Enron.
The judge's order effectively reinstates Barclays as a defendant, Lerach told Reuters, saying the judge was likely swayed by additional details on "sham" transactions between Barclays and Enron that his firm had uncovered since the original lawsuit was filed.
In the 21-page order, Judge Harmon said she would decide whether the plaintiffs have enough credible evidence to support what they allege based on their amended lawsuit.
"This is a ruling based on the plaintiffs' procedural objection," David Braff, Barclay's lead attorney on the case, said. "The judge has allowed the plaintiff an opportunity to replead. In so doing, she has strongly confirmed the legal analysis and reason that supported her dismissal of Barclays in July."
Other banks named in the lawsuit include Merrill Lynch, Credit Suisse Group, Toronto Dominion Bank, Royal Bank of Canada and Royal Bank of Scotland Plc.
A trial is scheduled for April 2007.
A U.S. federal judge, who originally dismissed claims against Barclays Plc in a $40 billion lawsuit, ruled Enron Corp. investors may file an amended complaint detailing charges that the bank helped hide financial misdeeds that led to the energy giant's collapse.
In July, U.S. District Judge Melinda Harmon in Houston dismissed Barclays from the civil lawsuit, which has netted more than $7 billion for investors, including $2 billion or more each from Canadian Imperial Bank of Commerce, J.P. Morgan and Citigroup Inc.
But on Monday, Judge Harmon wrote in an opinion that the plaintiffs, who are represented by powerful class-action attorney Bill Lerach, may file another complaint that includes more detail about Barclays' transactions with Enron.
The judge's order effectively reinstates Barclays as a defendant, Lerach told Reuters, saying the judge was likely swayed by additional details on "sham" transactions between Barclays and Enron that his firm had uncovered since the original lawsuit was filed.
In the 21-page order, Judge Harmon said she would decide whether the plaintiffs have enough credible evidence to support what they allege based on their amended lawsuit.
"This is a ruling based on the plaintiffs' procedural objection," David Braff, Barclay's lead attorney on the case, said. "The judge has allowed the plaintiff an opportunity to replead. In so doing, she has strongly confirmed the legal analysis and reason that supported her dismissal of Barclays in July."
Other banks named in the lawsuit include Merrill Lynch, Credit Suisse Group, Toronto Dominion Bank, Royal Bank of Canada and Royal Bank of Scotland Plc.
A trial is scheduled for April 2007.
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Bloomberg, Laurel Brubaker Calkins, 5 December 2006
Barclays PLC was reinstated as a defendant in the securities fraud lawsuit brought by Enron Corp. investors following revelations of widespread fraud at the energy trader and its subsequent 2001 bankruptcy.
U.S. District Judge Melinda Harmon in Houston put the bank back in the case in part due to sworn statements by convicted Enron Chief Financial Officer Andrew Fastow, according to a ruling yesterday.
``This could mean that we may be able to recover about $2 billion more for victims in the case,'' said William Lerach, lead attorney for the investors. The plaintiffs provided more details to Harmon about alleged practices involving Enron by the London- based bank, he said.
Trial in the case, which includes as defendants Merrill Lynch & Co., Credit Suisse Group and Barclays, is scheduled to begin in April in Houston federal court.
Barclays spokesman Peter Truell didn't immediately return a call seeking comment. Merrill is a passive minority investor in Bloomberg LP, the parent company of Bloomberg News.
The lawsuit is Newby v. Enron Corp., 01-cv-3624, U.S. District Court, Southern District of Texas (Houston).
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Barclays PLC was reinstated as a defendant in the securities fraud lawsuit brought by Enron Corp. investors following revelations of widespread fraud at the energy trader and its subsequent 2001 bankruptcy.
U.S. District Judge Melinda Harmon in Houston put the bank back in the case in part due to sworn statements by convicted Enron Chief Financial Officer Andrew Fastow, according to a ruling yesterday.
``This could mean that we may be able to recover about $2 billion more for victims in the case,'' said William Lerach, lead attorney for the investors. The plaintiffs provided more details to Harmon about alleged practices involving Enron by the London- based bank, he said.
Trial in the case, which includes as defendants Merrill Lynch & Co., Credit Suisse Group and Barclays, is scheduled to begin in April in Houston federal court.
Barclays spokesman Peter Truell didn't immediately return a call seeking comment. Merrill is a passive minority investor in Bloomberg LP, the parent company of Bloomberg News.
The lawsuit is Newby v. Enron Corp., 01-cv-3624, U.S. District Court, Southern District of Texas (Houston).
