NEW YORK – One of the last remaining cases stemming from the bankruptcy
of Houston-based commodities giant Enron Corp. will go back to the New York
federal court where it was initially filed in 2002.
According to court documents, the change in venue was granted
June 2 by the U.S. Judicial Panel on Multidistrict Litigation, and the case officially
transferred to the Southern District of New York on June 6.
The location change was initiated by Toronto-based
Silvercreek Management Inc. and four affiliated hedge funds that are suing Bank
of America Corp. and other underwriters for fraud.
The attorneys representing Silvercreek are Bruce S.
Sperling, Eugene J. Frett and Scott F. Hessell of Sperling & Slater PC.
Bank Of America’s attorneys are David J. Beck of Beck Redden
& Secrest LLP and Adam S. Hakki of Shearman & Sterling LLP.
The plaintiffs are seeking $100 million in damages and claim
the defendants “aided and abetted” the fraudulent investment and accounting practices discovered
at Enron which led to the company’s downfall and massive investor losses.
According to the Law360 website, attorneys for the funds had
requested the location change from the original district because the court had nearly
settled all of the multidistrict litigation cases related to the Enron case.
Attorneys for the defendants in the civil case argued
against moving it back to New York, saying the Texas court had more than 13
years’ experience overseeing it. They said the court’s specific knowledge concerning
the intricacies of Enron-based litigation and the laws governing it were
beneficial to rendering a fair verdict.
The panel said the law “expressly authorizes” it to send the
case back down “'at or before' the conclusion of pretrial proceedings,” the
“Only four actions (including this one) remain in the
centralized proceedings, and common fact and expert discovery has been
completed,” the panel said in its ruling. “Given these circumstances, we
conclude that remand is warranted.”
Those being sued by Silvercreek, in addition to BofA,
include Deutsche Bank AG and Credit Suisse (USA) Inc. and their securities
affiliates, and Bank of New York Mellon subsidiary Pershing LLC.
Deutsche Bank’s attorneys are Eric D. Wade of Porter Hedges
LLP and Ruth E. Harlow of Pepper Hamilton LLP.
Credit Suisse’s and Pershing’s attorneys are Odean L. Volker
of Haynes and Boone LLP and Richard W. Clary of Cravath Swaine & Moore LLP.
Silvercreek already has settled with Barclays Capital Inc.
and JP. Morgan Chase and Co. after making similar accusations about the
companies’ complicity in Enron’s fraudulent practices.
Enron executives Jeffrey Skilling and Andrew Fastow and the
estate of Kenneth Lay are all being sued individually.
Sitting on the JPML panel that rendered the decision was U.S.
District Judges Sarah S. Vance, Marjorie O. Rendell, Charles R. Breyer, Ellen
Segal Huvelle and R. David Proctor.