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Lay, Enron law firm released from investor lawsuit

Lay, Enron law firm released from investor lawsuit

A federal judge granted a request by former shareholders and investors suing Enron Corp. to drop several individuals and firms, including deceased company founder Kenneth Lay, from their lawsuit.
The Regents of the University of California, the lead plaintiffs in securities litigation against Enron and several banks, asked for the dismissals last year.
U.S. District Judge Melinda Harmon approved the request Wednesday in the class-action lawsuit.
The plaintiffs are suing investment firms and global banks they claim played key roles in Enron's collapse. The lawsuit, set for trial in April, is seeking billions of dollars in damages.
Besides Lay and his estate, those dismissed from the lawsuit include Vinson & Elkins, Enron's former outside law firm; Kenneth Rice, former chief executive of Enron's broadband unit; Joseph Hirko, another former CEO of the broadband unit; Kevin Hannon, former chief operating officer for the broadband unit; Lawrence "Greg" Whalley, a former CEO of Enron's wholesale trading unit; and Lou Pai, former retail energy unit CEO at Enron.
Trey Davis, a spokesman for the lead plaintiffs, said the decision to remove these individuals from the lawsuit was made because it was unlikely investors would be able to recoup any money from them.
"It allows us to ensure that we can collect the larger share of recoveries from more culpable defendants from whom we are more likely to recover money," he said.
So far, plaintiffs have recouped more than $7 billion (euro5.4 billion), mostly from such financial institutions as Bank of America, JPMorgan Chase & Co., Citigroup Inc. and Canadian Imperial Bank of Commerce.
Harry Reasoner, a former managing partner for Vinson & Elkins, said the firm was pleased with Harmon's order and continued to maintain it did nothing wrong.
An attorney for the Lay estate did not immediately return a telephone call seeking comment Wednesday.
Lay died from heart disease in July. His convictions on 10 counts of fraud, conspiracy and lying to banks in two separate cases were wiped out with his death.
Harmon said her ruling does not prevent individual investors from pursuing claims against those dismissed from the lawsuit.


Updated : 2021-06-25 12:15 GMT+08:00