Investors trying to recover lost money from the bankruptcy of Enron Corp. are turning up the heat on Merrill Lynch & Co.
William Lerach, whose law firm represents the University of California, the lead plaintiff in the class-action case, has asked the judge presiding over Enron’s bankruptcy to rule whether Merrill was a knowing participant in helping the energy trader hide massive losses, according to the Associated Press.
Last week Canadian Imperial Bank of Commerce agreed to pay $2.4 billion to settle a securities fraud class-action suit stemming from Enron’s bankruptcy, bringing the total amount recovered in litigation involving the company to $7.12 billion.
If Lerach gets his way, Merrill could be found liable for Enron losses before the case even goes to trial later this year, the AP pointed out. “We want the judge to rule that there is no genuine issue with the fact as to Merrill’s liability, and the amount of damages would be determined by the jury,” Lerach told the wire service. “I think this might help focus their attention. Merrill Lynch saw the motion before we filed it and pretty much said ‘take your best shot.’” A Merrill spokesman did not return the AP’s telephone calls on Friday.
Lerach told the wire service he presented a similar motion to CIBC, which chose to settle rather than go to trial.
The wire service added that Lerach would not comment on the status of his negotiations with the other remaining defendants, including Barclays PLC, Toronto Dominion Bank, Royal Bank of Canada, Deutsche Bank AG, and the Royal Bank of Scotland.