Category Archives: Enron

The guilty plea of Enron’s former treasurer, Ben Glisan, will help the plaintiffs in the pending securities class action against the company. According to a Reuters article, Glisan “admitted that he and others ‘engaged in a conspiracy to manipulate artificially Enron’s financial statements’ in a secretive transaction called Talon, designed to hide debt.” Glisan is set to begin his 5-year sentence for wire and stock fraud conspiracy immediately.

Quote of note: “The admission can stand as evidence in a civil court that Glisan, and Enron, engaged in fraud, freeing plaintiffs from having to prove that allegation. ‘It may not make it a slam dunk, but it certainly is moving the ball right up to the hoop,’ said Neil Getnick, whose Manhattan law firm Getnick & Getnick specializes in business ethics and anti-fraud litigation.”

Mark your calendars. The judge in the Enron securities class action has laid out the case schedule. According to an article in the Houston Chronicle, the trial will commence on Oct. 17, 2005, provided, of course, that the case ever gets to that stage.

According to a Reuters article, the trial in the securities class action against Enron is now scheduled to begin in October 2005 (nearly four years after the company’s bankruptcy).

Quote of note: “Kathy Patrick, a lawyer who represents Enron’s outside directors, told the judge that discovery could produce more than 100 million pages of documents. She likened the case to ‘the Bataan death march.'”

According to an article in the Houston Chronicle, the federal judges overseeing Enron’s bankruptcy and securities class action suits have appointed a new mediator for the settlement negotiations. The judges previously gave the job to U.S. District Judge Kevin Duffy of the S.D.N.Y. Judge Duffy’s name was withdrawn, at his request, a week later. They did not go far to find Judge Duffy’s replacement — the new mediator will be Senior U.S. District Judge William Conner, also of the S.D.N.Y.

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.”

The Wall Street Journal (subscription required) has an article on Enron’s push for a global litigation settlement. Enron has sought bankruptcy court approval to hire an attorney to pursue claims against its bankers, many of whom are co-defendants in the Enron securities class action. Not surprisingly, lead counsel for the securities class action is concerned that Enron is attempting to divert money away from injured investors. There is a joint status conference on the bankruptcy and securities class action cases today.

Quote of note: “Lawyers who are involved in the bankruptcy case view Mr. Cooper’s [Enron’s CEO] intiative as an effort to take control of the settlement process, and to attempt to stake a claim to a portion of any settlement money that Enron shareholders can wring out of the banks. Hiring a Texas litigator to represent Enron, these people say, coud help on that front.”