A Collaboration with the University of Pittsburgh

Lay and six other Enron defendants dismissed from class action shareholder suit

[JURIST] US District Court Judge Melinda Harmon on Wednesday granted a motion to dismiss seven defendants from the Enron shareholder derivative lawsuit [class action website], scheduled to go to trial in April. The lead plaintiff in the case, the University of California Board of Regents, has already negotiated settlements with Lehman Brothers, Bank of America, Citigroup, JP Morgan Chase, and CIBC [press releases, PDF], for a total of over $7 billion in recovery.

Those defendants dismissed from the case include the estate of former Enron founder Ken Lay [Houston Chronicle profile; JURIST news archive]; Lou Pai [Wikipedia profile], former director of Enron's energy division; Joe Hirko, Ken Rice, and Kevin Hannon [Houston Chronicle profiles], all former executives of Enron Broadband Services; Lawrence "Greg" Whalley, a commodity trader; and the law firm of Vinson & Elkins [firm website], counsel to Enron during court proceedings. The UC Regents moved to dismiss Pai [Houston Chronicle report] in December, shortly after requesting the dismissal of Vinson & Elkins. The Board of Regents moved to dismiss the other defendants [Houston Chronicle report] in January. Lay, convicted [JURIST report] in May of fraud and conspiracy charges [indictment, PDF] for providing investors with false and misleading financial information from 1999 up until Enron [JURIST news archive] filed bankruptcy in late 2001, died suddenly [JURIST report] of a heart attack in July.

The remaining defendants include Merrill Lynch and Credit Suisse First Boston [corporate websites]; former CEO Jeff Skilling; former CAO Richard Causey; former Chief Risk Officer Richard Buy; former Treasurer Jeff McMahon; and former investor relations chief Mark Koening [Houston Chronicle profiles]. The Houston Chronicle has more. The Houston Business Journal has additional coverage.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.