Bloomberg, Laurel Brubaker Calkins and Jef Feeley, 12 February 2007
Merrill Lynch & Co. and Credit Suisse First Boston asked for a trial delay in the $40 billion lawsuit brought by Enron Corp. shareholders until an appeals court decides whether investors may continue to sue as a group.
In court papers filed Feb. 9, the banks asked U.S. District Judge Melinda Harmon to postpone the April 9 trial to allow all parties in the case to adjust to a pending ruling by the U.S. Court of Appeals in New Orleans. Harmon also needs time, the banks said, to make a final ruling on whether Barclays Plc, which also was sued by the Enron investors, will stand trial alongside Merrill and CSFB in case involving lead plaintiff Mark Newby.
The appeals court's ruling ``will significantly affect what must be proven at the Newby trial,'' the banks told Harmon. ``The court and the parties should take every reasonable precaution to ensure that the case is tried only once.''
The trial, which the banks call ``one of the largest, most complicated securities-fraud cases in United States history,'' will determine whether Enron's former lenders bear financial responsibility for helping the now-bankrupt energy trader disguise debt and boost revenue through improper financial transactions. More than 5,000 jobs and $2 billion in employee pensions were wiped out by Enron's 2001 collapse following the revelation of widespread accounting fraud.
Harmon ruled in August that thousands of Enron investors could sue the banks as a group, consolidating litigation that, in some cases, had been pending for as long as five years. The banks appealed that ruling this month, urging the New Orleans appellate panel to force shareholders to sue individually.
CSFB spokeswoman Victoria Harmon didn't immediately return a phone message seeking comment. Merrill Lynch spokesman Mark Herr declined to comment beyond what was said in the filing. He said the bank has no indication of when Judge Harmon will schedule a hearing on the request.
Bill Lerach, lead attorney for the plaintiffs, wasn't immediately available to comment.
Merrill Lynch and Credit Suisse First Boston claim they aren't liable for investors' losses because they didn't participate directly in the fraud that destroyed what had been the world's largest energy trader. Earlier court rulings bar investors from suing those who may have aided fraudulent schemes rather than executed them.
In July, Harmon dismissed Barclays from the Newby case, then changed her mind in December and allowed investors to reassert their claims under a revised legal theory. Harmon has yet to rule on Barclays' final status in the case.
Barclay's spokesman Peter Truell said the bank had no comment on the banks' request or the possibility that Barclays could be included as a defendant at trial.
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Merrill Lynch & Co. and Credit Suisse First Boston asked for a trial delay in the $40 billion lawsuit brought by Enron Corp. shareholders until an appeals court decides whether investors may continue to sue as a group.
In court papers filed Feb. 9, the banks asked U.S. District Judge Melinda Harmon to postpone the April 9 trial to allow all parties in the case to adjust to a pending ruling by the U.S. Court of Appeals in New Orleans. Harmon also needs time, the banks said, to make a final ruling on whether Barclays Plc, which also was sued by the Enron investors, will stand trial alongside Merrill and CSFB in case involving lead plaintiff Mark Newby.
The appeals court's ruling ``will significantly affect what must be proven at the Newby trial,'' the banks told Harmon. ``The court and the parties should take every reasonable precaution to ensure that the case is tried only once.''
The trial, which the banks call ``one of the largest, most complicated securities-fraud cases in United States history,'' will determine whether Enron's former lenders bear financial responsibility for helping the now-bankrupt energy trader disguise debt and boost revenue through improper financial transactions. More than 5,000 jobs and $2 billion in employee pensions were wiped out by Enron's 2001 collapse following the revelation of widespread accounting fraud.
Harmon ruled in August that thousands of Enron investors could sue the banks as a group, consolidating litigation that, in some cases, had been pending for as long as five years. The banks appealed that ruling this month, urging the New Orleans appellate panel to force shareholders to sue individually.
CSFB spokeswoman Victoria Harmon didn't immediately return a phone message seeking comment. Merrill Lynch spokesman Mark Herr declined to comment beyond what was said in the filing. He said the bank has no indication of when Judge Harmon will schedule a hearing on the request.
Bill Lerach, lead attorney for the plaintiffs, wasn't immediately available to comment.
Merrill Lynch and Credit Suisse First Boston claim they aren't liable for investors' losses because they didn't participate directly in the fraud that destroyed what had been the world's largest energy trader. Earlier court rulings bar investors from suing those who may have aided fraudulent schemes rather than executed them.
In July, Harmon dismissed Barclays from the Newby case, then changed her mind in December and allowed investors to reassert their claims under a revised legal theory. Harmon has yet to rule on Barclays' final status in the case.
Barclay's spokesman Peter Truell said the bank had no comment on the banks' request or the possibility that Barclays could be included as a defendant at trial.
