The University of California asked a federal judge in Texas to allow it to proceed with individual state-fraud claims against former Enron Corp. banks Barclays Plc, Credit Suisse Group AG and Merrill Lynch & Co, Bloomberg reported.
The university, in a filing today in U.S. District Court in Houston, asked for court permission to amend its securities- fraud complaint. The university will want to proceed individually with the state claims only if the court rules against it on a request by the lenders to dismiss federal, class-action securities-fraud claims, according to the filing.
"While we believe that there is a strong legal and factual basis for the class-wide claims we have asserted against these defendants, this amendment is intended to preserve an avenue of recovery should the class claims not prevail," Charles Robinson, UC's general counsel, said in an e-mailed statement.
The university is the lead plaintiff in an investor class- action, or group, lawsuit that has recovered $7.2 billion in settlements with Enron's lenders, accountants and lawyers. The remaining defendants, including Barclays, Credit Suisse and Merrill, in 2007 won an appeals court decision that the lawsuit couldn't proceed as a class-action and that the investors had to sue individually.
Shirley Norton, a spokeswoman for Bank of America Corp., which acquired Merrill, declined to comment. Alistair Smith, a spokesman for Barclays in London, and Karen Laureano-Rikardsen, a spokeswoman for Credit Suisse in New York, didn't immediately return calls to their offices after business hours.
Enron shareholders accuse the banks of helping the defunct company's deceased Chairman Kenneth Lay and former Chief Executive Officer Jeffrey Skilling disguise debt as loans, finance sham energy trades and use off-the-books partnerships to hide losses and inflate revenue. Enron was the world's largest energy-trader before it collapsed in December 2001.
The case is Newby v. Enron Corp., 01-CV-3624, U.S. District Court, Southern District of Texas (Houston).
