American Legal Eagles Vie for an Enron Bonanza; A FORMIDABLE WOMAN HOLDS THE CARDS AS LAW FIRMS BATTLE TO LEAD THE RECORD FRAUD CASE

By Chambliss, Lauren; Hart, Joanne | The Evening Standard (London, England), February 14, 2002 | Go to article overview

American Legal Eagles Vie for an Enron Bonanza; A FORMIDABLE WOMAN HOLDS THE CARDS AS LAW FIRMS BATTLE TO LEAD THE RECORD FRAUD CASE


Chambliss, Lauren, Hart, Joanne, The Evening Standard (London, England)


Byline: LAUREN CHAMBLISS;JOANNE HART

TEXAS Judge Melinda Harmon is expected soon to hand the Holy Grail of class action legal assignments to one law firm - consolidating control of the dozens of class-action lawsuits against Enron, its board members, former executives and accountants Andersen.

The judge will probably pick one of three teams of powerhouse law firms currently vying to be the lead plaintiff in the largest business fraud case ever assembled against a single corporation.

In all, 60 investor suits are seeking more than $60 billion ([pound]42 billion) in damages from bankrupt Enron and the others involved in the most spectacular corporate collapse in US history.

Even if only a fraction of that is eventually recovered, the potential reward to the lead law firm co-ordinating the legal charge could be off the charts, easily surpassing the $262 million awarded to lawyers for their work in the Cendant case, which settled for a record $3.5 billion.

The three law firms - Milberg Weiss Bershad Hynes & Lerach, Lieff Cabraser Heimann & Bernstein and a team combo of Chitwood & Harley and Grant & Eisenhofer - are top dogs in the rough-and-tumble world of classaction litigation, the big-money cases where numerous plaintiffs are rolled into one giant claim.

Milberg Weiss has filed almost half of all shareholders' class-action suits in the US and its flamboyant attorney William Lerach is greatly feared in Silicon Valley, where he has tied up hi-tech companies with collapsed share prices in contentious legal battles for years. Milberg Weiss represents the University of California's activist pension fund, CALPERS, which lost a whopping $144 million when Enron's share price collapsed just before its bankruptcy filing in early December.

New York City and Florida pension funds, which lost $440 million between them, are represented by Lieff Cabraser, a San Franciscobased firm that has won high-profile awards for clients in automobile, tobacco and other consumer classaction cases.

Judge Harmon will consider several factors in merging the 60 shareholder suits and picking a lead firm. The resources of the plaintiffs, how much they lost and the experience of their counsel will all guide her decision. In 1995 Congress passed a Tort Reform Act giving Judges the power to pick the firm best suited to the job - not necessarily the one that first filed a case.

Another factor the judge may consider is whether the lawyers are willing to accept lower fees, given the potential enormity of the amounts involved.

Attorneys typically take anything between 10% and 25% plus expenses, substantially reducing the payoff to the victims they represent. Pressure is mounting in America to keep the lawyers from walking off with a mountain of cash intended for the institutional investors and millions of individual shareholders who lost real money in Enron's share-price collapse.

President George Bush's stepmother lost about $ 8000 when Enron imploded, and she is among the lucky ones. There are countless stories of investors who lost more than half of their savings tied up in stock in a company that Wall Street analysts routinely touted as a new-economy star.

Institutions are particularly keen to limit the lawyers' slice of the classaction pie, says Meredith Miller, assistant treasurer with the State of Connecticut, the lead plaintiff in a case against Waste Management that was also tried in Judge Harmon's courtroom.

"We have made it priority to get the lawyers' fees down below 6% to increase our recovery of assets," says Miller. "We want shareholder suits in which lawyers aren't seen as gobbling everything up."

How much there will be to recover is an open question. Even if the shareholder suits prevail, recovery of damages could be limited because Enron is in bankruptcy and there is a long line of creditors with a claim to Enron assets. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

American Legal Eagles Vie for an Enron Bonanza; A FORMIDABLE WOMAN HOLDS THE CARDS AS LAW FIRMS BATTLE TO LEAD THE RECORD FRAUD CASE
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.