A ruling in the federal appeals court in New Orleans on Monday revived Texas state court fraud cases targeting Enron Corp.'s former leaders and more than a dozen financial institutions accused of playing a role in the company's collapse, legal documents showed.
In mid-October 2001, Enron announced massive losses, slashed shareholder equity by $1.2 billion and came under intense pressure from investors. What was once the nation’s seventh-largest company sought bankruptcy protection by year’s end.
The ruling by the Fifth Circuit Court of Appeals, which reverses an earlier federal court decision, allows cases to proceed against individuals and institutions which have not yet reached a settlement.
In late 2001, the Houston law firm of Fleming & Associates filed seven securities-related lawsuits in Texas state courts on behalf of several hundred clients against various Enron-related defendants, according to the documents.
The federal court, which already had jurisdiction over various Enron-related cases, then issued an order prohibiting Fleming from filing any new Enron-related actions without leave of the court.
In 2005, Fleming's leave to file lawsuits against Enron-related defendants for fraud in Texas courts was denied by the federal court.