Firms plea for Enron relief

Merrill Lynch & Co. Inc. and Credit Suisse Group asked an appeals court to end a class action by Enron Corp. investors seeking to recover for $40 billion that they lost when the energy trader collapsed in 2001, according to Bloomberg.
The two banks argued that a Houston judge was wrong to allow Enron investors to sue as a group and contended that they could not be sued because they did not participate directly in the accounting fraud that led to the company’s bankruptcy.
In June, Judge Melinda Harmon of the Federal District in Houston said investors who bought Enron securities could combine their claims.
The decision gave investors, who would otherwise be forced to sue individually, the possibility of a much higher recovery and more leverage in negotiating any settlement, according to the report.
Merrill and Credit Suisse contend that the Judge’s ruling was based on the mistaken theory that the banks were individually responsible for investor losses because they took part in a scheme run by Enron.
Other former Enron lenders including Citigroup Inc., JPMorgan Chase & Co. and the Canadian Imperial Bank of Commerce settled with investors for more than $7 billion.