X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The Houston federal judge overseeing the shareholder class action arising from the collapse of Enron Corp. has dismissed claims against Kirkland & Ellis, one of two law firms named as defendants in the case. On Friday, Judge Melinda Harmon of the U.S. District Court for the Southern District of Texas issued a 302-page decision on motions to dismiss filed by the investment banks, law firms and others that plaintiff shareholders have charged participated in Enron’s collapse. Chicago-based Kirkland represented limited partnerships Enron Chief Financial Officer Andrew Fastow allegedly used to clean up the company’s balance sheet while simultaneously enriching himself, other Enron executives and their families. Fastow was charged with fraud and money laundering in October. Michael Kopper, another Enron executive who worked with Fastow on the partnerships, pleaded guilty to similar charges in August. Grounds for the Kirkland dismissal were unclear Friday night as few lawyers involved in the matter had yet penetrated Harmon’s voluminous ruling. Laurence A. Urgenson, a partner in the firm’s Washington, D.C., office speaking on behalf of the firm, noted that Kirkland had argued that its involvement in the collapse of Enron was peripheral at best. “From the outset, it has been our position that Kirkland & Ellis was not involved in the disclosure and accounting judgments that are at the heart of the complaint,” said Urgenson, who declined further comment. John W. Spiegel, the partner with Los Angeles’ Munger, Tolles & Olson who represented Kirkland in the action, also declined comment. Though Judge Harmon dismissed Kirkland from the case, she denied the motion to dismiss filed by Houston-based Vinson & Elkins, the firm generally regarded as Enron’s chief outside counsel. Vinson & Elkins, represented by partner John Villa of the D.C. firm Williams & Connolly, also had argued that its role as legal counsel had been distant from accounting matters. In a statement issued Friday, Vinson & Elkins pointed out that civil procedure rules required the court at this stage to assume the plaintiffs’ allegations were true. “The allegations regarding Vinson & Elkins are not true,” the statement read. “When the real facts are presented, Vinson & Elkins will be exonerated.” ANDERSEN MOTION DENIED Judge Harmon also denied the motion to dismiss by Arthur Andersen, the accounting firm already convicted of obstruction of justice for its role in the Enron debacle. The judge also denied demurrers by most of the major investment banks, including J.P. Morgan Chase, Citigroup and Merrill Lynch, that advised Enron on various financial transactions. Apart from Kirkland, only Deutsche Bank had its motion to dismiss granted, though the judge partly dismissed claims against Lehman Brothers and Bank of America. William Lerach of Milberg Weiss Bershad Hynes & Lerach, representing the lead plaintiffs in the Enron class action, did not return a call seeking comment. Suspicions that lawyers at Vinson & Elkins and Kirkland must have been aware of executives’ wrongdoing at Enron has fueled efforts to police the legal profession. As part of the Sarbanes-Oxley Act, Congress required the Securities and Exchange Commission to draft rules that would require securities lawyers to notify corporate boards of misconduct on the part of executives. The SEC recently proposed rules that would further require lawyers to withdraw from representation and effectively notify the commission itself if lawyers feel the board is not acting. The proposed rules have met with stiff resistance from the corporate bar.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.