The Supreme Court of the United States has put an end to a $40-billion shareholder lawsuit against some of the investment banks involved in the collapse of the Enron Corporation. The University of California was the lead plaintiff in the case, which was appealed to the Supreme Court after it was blocked by a federal appellate court in March.
As is customary, the justices made no comment about their decision today to reject the appeal.
The University of California led the class-action suit against the now-bankrupt energy company. Previous settlements in the case totaled $7.3-billion, which will be shared by 50,000 investors. Those settlements were made by banks and other businesses that were among the defendants, including Arthur Andersen LLP, the Canadian Imperial Bank of Commerce, Citigroup, and JPMorgan Chase.
However, some of the other banks named in the suit, including Merrill Lynch, Barclays, and Credit Suisse, opted not to settle, and the federal appeals court ruled that they “owed no duty to Enron’s shareholders.” Today’s action by the Supreme Court saved them up to $40-billion in payouts to the plaintiffs. —Erin Strout
