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Criminal intent, says one attorney, will be a key issue in trials of the former Enron executives.
Stephen Taub, CFO.com | US
June 9, 2005
It seems that the Supreme Court's reversal of Arthur Andersen's obstruction-of-justice conviction has inspired other parties to reexamine their legal fate.
The high court ruled that a company may not be convicted where the wrongdoing isn't intentional and pervasive, and that the acts of a few cannot be imputed to a corporation that otherwise lacks criminal intent, explained The Wall Street Journal.
Unsecured creditors of Adelphia Communications Corp. have since gone to U.S. Bankruptcy Court in Manhattan in an effort to overturn three settlements between the cable company, the founding Rigas family, and the government, according to the Journal. The creditors maintained that the government's case against Adelphia is no longer strong enough to justify the $715 million that the company agreed to pay to avoid litigation.
The creditor group argued that approval of the settlements was based on the government's intent to seize cable companies owned by the Rigases but managed by Adelphia, the Journal explained. The group also cited the government, which said its conviction of Arthur Andersen "and the resulting catastrophic consequences" created the potential for a similar outcome against Adelphia, the newspaper added.
In newly filed court papers, however, creditor have now noted that U.S. Attorney Christopher Clark said the government would not be able to obtain titles to the Rigas-owned entities through forfeiture because the company and its lenders have superior claims, according to the paper.
Meanwhile, you may also recall that shortly after the recent Andersen ruling, lawyers for former Credit Suisse First Boston investment banker Frank Quattrone said in court papers that the ruling had an "important bearing" on his appeal, according to The Los Angeles Times.
Quattrone was convicted largely on the basis of his e-mail that urged subordinates to "clean up those files" while the government was probing IPO practices at his firm, according to the Journal. According to reports, jury instructions used by the judge in Quattrone's case were similar to those used by the Andersen judge.
"The fact that the [Supreme]court decided the case the way it did and did so unanimously gives Quattrone a real boost," said the former banker's appellate lawyer, Mark Pomerantz of Paul Weiss Rifkind Wharton & Garrison, according to the Journal.
The newspaper also reported that some attorneys for Enron executives said the ruling would make it harder for the government to win convictions for their clients. Daniel Petrocelli of O'Melveny & Myers, who is representing Jeff Skilling, said the Supreme Court concluded that the Andersen jury convicted the accounting firm of criminal conduct "absent any showing of criminal intent." Criminal intent, he added, would be a key issue in the trial of the former Enron executives.