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Vinson & Elkins “employed an eyes-wide-shut policy” about former client Enron Corp.’s complex accounting structures that helped lead to the Houston company’s bankruptcy. That’s according to a 281-page document titled “Lead Plaintiffs’ Opposition to Motion for Summary Judgment” filed June 13 in a class-action shareholder suit pending in the Southern District of Texas in Houston before U.S. District Judge Melinda Harmon. In Newby, et al. v. Enron Corp., et al., filed Oct. 22, 2001, the plaintiffs allege that V&E, other advisers and former Enron executives helped bring the once high-flying energy company to its economic knees and concealed the company’s true financial condition from shareholders. The plaintiffs, represented by lead attorney William S. Lerach, a partner in San Diego’s Lerach Coughlin Stoia Geller Rudman & Robbins, allege in Tuesday’s motion that V&E created false prospectuses, issued false assurance letters to permit securities sales, signed illusory true issuance opinions on deals that allowed Enron to move debt off its balance sheet, co-authored false U.S. Securities & Exchange Commission filings, and engaged in a cover-up during the firm’s investigation of questions raised by Sherron Watkins, then Enron’s vice president for corporate development. Along with their motion opposing summary judgment, the lead plaintiffs submitted five boxes of documents as evidence, including e-mails from V&E partners to each other and to then-Enron executives. In court filings, V&E denies the allegations made by the Newby plaintiffs. The trial is set to begin in October. In an interview, V&E partner Harry Reasoner says the firm filed a motion for summary judgment that shows the firm met the criteria for a dismissal set by Harmon. Reasoner characterizes the plaintiffs’ latest motion as “a lot of extreme rhetoric and an attempt to divert the court from issues that the court said are relevant.” The firm filed the summary judgment motion under seal on April 13 and filed a redacted version of that motion on April 20. On June 1, V&E announced plans to pay Enron and its Committee of Unsecured Creditors $30 million in cash to settle potential claims related to Enron’s bankruptcy, In Re: Enron Corp. U.S. Bankruptcy Judge Arthur J. Gonzalez of the Southern District of New York will decide whether to approve the proposed deal.

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