Enron Law Firm In Line For $700m Pay Day

The firm of lawyers representing aggreived shareholders in the scandal-ridden Enron collapse to a $7.2 billion could today be in line for an award of legal fees in their favour to the tune of $700 million, pending an awards decision in relation to the case.

Law firm Coughlin Stoia Geller Rudman and Robbins were responsible for leading the case against banks and investment groups thought to have supplied funding to Enron, which eventually gave rise to a settlement of $7.2 billion for those affected by the crash.

However the law firm is now looking to earn its payday, with a judge set to approve the payout as the largest ever legal fee bill derived from a case of securities fraud in the US in recognition of its efforts on behalf of the aggreived investors in Enron.

Energy group Enron collapsed in 2001 after becoming hopelessly insolvent as a direct result of fraudulent accounting practices and apparently lax auditing processes, which enabled the company to hide sufficient portions of its debt exposure from its public accounts.

As a result the company was declared insolvent with debts amounting to almost $32 billion, which saw a substantial proportion of pension savings for employees taken down with it, despite directors and executives retaining healthy pay deals in the preceeding trading years. Of the banks found liable last time around, notable names included Citigroup and JP Morgan.

The law firm is anticipating expenses of 9.5% of the overall settlement, which would see the company benefit strongly from its success in winning compensation. Speaking today on the payout Patrick Coughlin, founding partner, said that whilst the payout may be approved it is still dependent on the judge’s appraisal of the situation, and indeed will still be required to cover expenses incurred in the running of the case.

Story link: Enron Law Firm In Line For $700m Pay Day