The University of California filed a motion in U.S. District
Court last week that would prevent documents relating to the UC-led
lawsuit against Enron from being sealed.
The UC, which was chosen to lead the class action suit against
Enron and several other defendants last April, lost $145 million
after a sell-off of Enron stocks last November in the wake of
allegations that Enron used accounting tricks to hide debts and
defraud stockholders.
A UC press release estimates total losses of all plaintiffs in
the class action suit exceed $25 billion.
A related motion, filed jointly with some of the defendants,
would set rules determining where over 25 million Enron documents
will be stored and who will have access to them.
The motions were filed in the U.S. District Court for the
Southern District Court of Texas in Houston.
The case is still in its early stages, and has not yet even
entered the discovery phase, in which both sides seek from each
other information they will use for their arguments.
In a legal memorandum, the UC argued that the documents must
remain open since American law “presupposes public
scrutiny” and that it is in the public interest to disclose
any illegal actions committed by a publicly traded corporation.
Additionally, disclosure would benefit class members absent from
court proceedings.
“The members of the class we represent have a particular
interest in monitoring and evaluating the prosecution of this case
…. They cannot do so if they do not have access to the
facts,” said UC general counsel James Holst in a
statement.
Attorneys for Enron and several co-defendants, including Arthur
Anderson, did not return phone calls to their offices made on
Friday and Monday.
Robert Stern, attorney for former Enron chief executive Jeffrey
Skilling, John Spiegal, attorney for Kirkland & Ellis, and
William Martson Jr., attorney for Tonkon Torp LLP, the latter two
both being law firms, all declined to comment whether any of the
defendants would file any response to the university’s open
access motion.
If the motions are approved, they would not allow members of the
press or general public direct access to Enron documents though
attorneys would be allowed to reveal information to the public or
during court proceedings.
The class action suit against Enron asks for a $1.1 billion
refund of losses associated with alleged insider trading plus
compensatory damages.
Though the university lost millions, UC officials have
repeatedly said the pension plan recipients will not be hurt
significantly.
The total loss for all UC portfolios from Enron’s
collapse, $145 million, is just 0.3 percent of the
university’s total investment funds, according to the UC
Office of the President.
Last August, a tentative $40 million settlement was reached with
Arthur Anderson, Enron’s former auditing firm.