A U.S. judge has ruled that a lawsuit filed by Enron investors can go to trial in April as planned even though an appeals court has not yet issued a key decision on whether the plaintiffs can be allowed to join as a group.
U.S. District Judge Melinda Harmon in Houston rejected a request by investment banks Merrill Lynch and Co. Inc. and Credit Suisse Group to halt the trial for now. Enron investors are suing the banks, contending they helped the failed energy company hide financial wrongdoing.
Merrill Lynch and Credit Suisse have asked the U.S. Court of Appeals for the 5th Circuit to overturn a prior ruling by Harmon that designated the case as a class action. Despite uncertainty of when the appeals court will rule, Harmon said in her decision on Wednesday that she agreed with the plaintiffs “that there should be no postponement of the trial.”
Class-action cases allow large groups of investors to sue together — rather than bringing their claims as individuals — and a decision by the appeals court to overturn the class certification would be a major blow to the investors’ case.
Oral arguments in the appeal were held earlier this month, but the 5th Circuit did not say when it would issue a decision.
With the trial looming, plaintiffs in the case have won legal settlements over the past several years totaling more than $7 billion from other banks named in the original lawsuit, including Citigroup, JPMorgan Chase & Co. and Canadian Imperial Bank of Commerce.