UC and Other Plaintiffs To Share $168 Million From Enron Settlement
UC Office of the President
Jan. 7, 2005 – The University of California, lead plaintiff for investors in the Enron securities litigation, will move next week for preliminary court approval of a settlement with some of Enron’s former directors in which the investor class will receive $168 million.
The agreement, which was reached Oct. 6, 2004, would award the plaintiffs $155 million in insurance proceeds and more than $13 million in personal contributions of insider trading proceeds by the directors.
Over the last three months, the plaintiffs, the settling defendants, the insurers and certain of the non-settling insured defendants, have negotiated a complex agreement that provides a framework for court approval by setting aside $13 million of the insurance proceeds for the continuing defense of certain of the non-settling insured defendants in exchange for their agreement not to oppose the settlement.
“This is a further significant step toward what we hope will be a substantial recovery for the investor victims of the Enron fraud,” said James E. Holst, UC’s general counsel. “It is especially significant that these outside directors were made to disgorge some of their insider trading proceeds.”
The agreement marks the fourth settlement in the case, totaling almost half a billion dollars already recovered for the plaintiffs.
“We are continuing to prosecute the case against individuals and entities charged with participating in the fraud and we expect even more substantial recoveries from these defendants,” said William Lerach of Lerach Coughlin Stoia Geller Rudman & Robbins LLP, lead counsel for the class.
In February 2002, the University of California was named lead plaintiff in the Enron shareholders’ class action suit previously filed against 29 top executives of Enron Corp. and its accounting firm, Arthur Andersen LLP. The UC filed a consolidated complaint April 8, 2002, adding nine banks and two law firms as defendants in the case. In April 2003, U.S. District Court Judge Melinda Harmon completed her rulings on the various defendants’ motions to dismiss and lifted the stay on discovery. Following those rulings, the UC filed a second amended complaint May 14, 2003.
Depositions in the case began in June 2004, with the trial slated to begin Oct. 16, 2006.
Mother Files Suit On Behalf of 14-year-old College Student
UCLA Daily Bruin
Jan. 12, 2005 – Attorneys are meeting for an initial court hearing today regarding a suit filed by the mother of a 14-year-old UCLA student against the state of California for not providing adequate educational instruction for her son.
The suit was filed in July in a California Superior Court in Sacramento and alleges the state violated the constitutional rights of Levi Clancy, a student described in the legal complaint as “highly gifted,” because he did not receive “a free, equal and suitable education.”
Clancy is currently in his second year at UCLA. He began taking classes at Santa Monica College when he was 7 years old, passed the California High School Proficiency Exam when he was 9 and enrolled at UCLA in January 2004, according to the complaint.
Clancy’s single mother, Leila Levi, cannot continue to afford the education necessary for her son, the complaint said, and the suit seeks financial compensation for his education.
“The bottom line is, that the Constitution guarantees a free and equal education according to the individual needs of each student, and this particular student needs a college level education in order to function as a child,” said Richard Ackerman, Levi’s attorney.
“If you assume that he’s required to attend school until he’s 16, and we know that the public school system is not going to meet his needs … then it becomes pretty obvious that the state does have a duty to make sure he’s educated up until he’s 16,” Ackerman said. “If he doesn’t, he’s a truant.”
Ackerman, who has taken the case pro bono, said the state’s programs are not adequate for students as advanced and gifted as Clancy.
Clancy is a minor and his mother declined requests to interview him.
Attorneys are meeting for an initial court hearing about the suit today in Sacramento, and Ackerman said he will likely seek class action status.
“This case is probably the first in the nation to deal with this,” Ackerman said. “That’s [why] I’m hoping that this case will make its way to the California Supreme Court; that might actually set an example for the rest of the nation.”