Enron Corp. slipped deeper into the history books last Wednesday after the remaining defendants, including former CEO Jeffrey Skilling, were dismissed in an eight-year-old lawsuit filed by shareholders and investors against the bankrupt trader's financial institutions.
Ironically, Houston-based U.S. District Court Judge Melinda Harmon dismissed the remaining defendants on the same calendar day, Dec.2, that Enron filed for bankruptcy in 2001 (see NGI, Dec. 10, 2001).
The regents of the University of California (UC), the lead plaintiffs in the shareholder lawsuits, asked Harmon to drop the claims against some of the defendants because various court rulings and the financial condition of several of the defendants had prevented any hope of recovering additional funds.
According to the UC regents, it is "no longer in the interests of the plaintiffs to pursue the case." A court clerk for Harmon said the decision to dismiss the remaining defendants will not affect a $7.2 billion-plus settlement that was obtained and approved by the court in 2008 (see NGI, Jan. 21, 2008).
"I can't say it's been fun," Harmon said jokingly, before signing the order to dismiss the remaining defendants in the long-running case.
Dismissed from the case were Bank of America Corp.'s Merrill Lynch unit, Barclays plc, Credit Suisse Group AG, Royal Bank of Canada, Royal Bank of Scotland Group plc and Toronto-Dominion Bank.
Besides Skilling, individual claims also were dismissed against former Chief Accounting Officer Richard Causey and Mark Koenig, the former investor relations chief. All were sentenced to prison for their roles in Enron's collapse. Skilling and Causey remain in prison; Koenig served a 16-month sentence.
Of the settlement announced last year, about $4.6 billion already has been distributed to the 1.5 million individuals and entities that share in the settlement plan. Another $1 billion was to be allocated before the end of this year, with the rest distributed by the middle of 2010. To be eligible for the settlement, investors and shareholders needed to have bought Enron or Enron-related securities between Sept. 9, 1997 and Dec. 2, 2001.
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