The result of the joint status conference on the Enron bankruptcy and securities class action cases is court-ordered mediation. According to the Houston Chronicle and the Washington Post,U.S. District Judge Kevin T. Duffy of the S.D. of New York has agreed to serve as the mediator for Enron and its creditors, a group of financial institutions, and the shareholder and employee plaintiffs in the putative class actions. The order signed by the courts creates a mediation representative for each of the three categories of parties.
Quote of note (Washington Post): “The financial firms represent the most important potential source of recovery for shareholders, lawyers said. ‘It may be that at the end of the day, the banks may decide to throw money at this to make it go away,’ said Aaron R. Cahn, an attorney for a group of Enron creditors. ‘A lot of that depends on realistic expectations of the merits of the case against the banks.'”
Quote of note (Houston Chronicle): Some people speculated that “the judges may have gathered lawyers from around the country for the mediation announcement because just being in the room, with around 100 attorneys buzzing around, made clear how unwieldy the Enron civil and bankruptcy proceedings will be.”