Enron Creditors Allowed to Sue Lawyers, Auditors, Former Execs

The bankruptcy judge in the Enron case has ruled that the energy company’s creditors can sue two Houston law firms, an accounting firm and about three dozen former executives connected with the company’s demise.

Creditors were granted permission to add the Vinson & Elkins and Andrews & Kurth law firms, accounting firm Arthur Andersen, and about 30 former executives to a civil lawsuit filed last year in Montgomery County, Texas, Reuters reported. U.S. Bankruptcy Judge Arthur Gonzalez made the ruling Monday in New York.

The Texas lawsuit, which alleges negligence and fraud, already names nine former Enron executives, including former Chairman Kenneth Lay, former Chief Executive Jeffrey Skilling and former Chief Financial Officer Andrew Fastow.

After the lawsuit was filed in October of 2002, it was included in a flurry of civil claims awaiting action by Judge Melinda Harmon in a Houston federal court.

Creditors believe the suit would move faster in Montgomery County. It could be the first civil trial against the prominent former Enron executives. James Derrick, the company’s former general counsel, is among the potential new defendants.

"We're in Montgomery County because we're advancing only state law claims, and that venue is far more efficient than the one being bogged down" with two class-action lawsuits, said Charles Cunningham, a lawyer for the creditors.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Upcoming CPE Webinars

Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.