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"Banks� $30bn Enron question"

Via Schaeffer, the London Times reports on the extortion of the Royal Bank of Scotland: risk that a Houston jury out for blood will accept Bill Lerach's entreaty that the foreign bank be held responsible for an alleged $30 to $40 billion in Enron losses, or settle for pennies on the dollar, which would still be a high nine or low ten digits. Andrew Fastow, the mastermind of the Enron scam, has agreed to testify on behalf of the plaintiffs (and was rewarded with their successful filing on his behalf asking for a lighter sentence). Lerach recognizes that he has RBS in an impossible position:

Armed with Fastow�s deposition, Lerach said the British banks are �doomed to lose�. �If they want to be smart and pay up, we are happy to settle. If they want to go to the gallows in front of a Houston jury, they can be my guest,� said Lerach.

(Dominic Rushe, Oct. 8). Every settling defendant, many of whom lost millions in the Enron affair, has settled for less than five cents on the dollar, but with a scattershot complaint and a judge that has generally refused to dismiss defendants, Lerach has extorted $8 billion to date. One exception is defendant Barclays, which successfully fought off the suit against it in a July 20 ruling; Lerach is appealing.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.