UC reaches $11.5 million settlement with Goldman Sachs in Enron securities lawsuit

From University of California
February 5, 2008

The University of California announced today (Feb. 5) that it has reached an $11.5 million settlement with Goldman, Sachs & Co. on behalf of investors who purchased the 7% Exchangeable Notes issued by Enron Corp. The plaintiffs had alleged Goldman Sachs violated Section 11 of the Securities Act of 1933 for marketing the notes via a false registration statement. The university filed claims against Goldman Sachs (Case No. H-04-0088) in the U.S. District Court for the Southern District of Texas in Houston in 2004. The Shooters Hill Revocable Trust was also a plaintiff in the case. The settlement has been approved by the UC Board of Regents and is subject to court approval.

The 7% Exchangeable Notes, which were issued by Enron, were exchangeable in to stock of Enron Oil & Gas Co. The settlement covers purchases of Enron 7% Exchangeable Notes from the date of their issuance until Dec. 2, 2001, when Enron filed for bankruptcy.

To date, UC has obtained more than $7.2 billion in settlements for Enron investors, including $2.4 billion from Canadian Imperial Bank of Commerce, $2.2 billion from JPMorgan Chase, $2 billion from Citigroup, $222.5 million from Lehman Brothers, $69 million from Bank of America, $168 million from Enron's outside directors, $72.5 million from the accounting firm of Arthur Andersen LLP, $33 million from Andersen Worldwide, and $10.2 million from the law firm of Kirkland & Ellis LLP. UC has also secured a distribution of $51 million for investors through the bankruptcy proceeding for the LJM2 partnership involved in the Enron scheme.

The court has set a hearing for final approval of the allocation plan, the request for reimbursement of plaintiffs' expenses and the motion for attorney fees on Feb. 29, 2008. For more information, see the notice at www.gilardi.com/enron/securities or the "settlement" section of www.enronfraud.com.

The plan will cover eligible investors who purchased Enron securities between Sept. 9, 1997, and Dec. 2, 2001. It is estimated that about 1.5 million Enron stock and bond purchasers comprise the class, whose losses from the fraud total more than $40 billion.

There are also still several remaining defendants in the Enron case, including Barclays Bank, Credit Suisse First Boston and Merrill Lynch, as well as several former Enron officers, including CEO Jeff Skilling and Chief Accounting Officer Richard Causey, the Royal Bank of Canada, Royal Bank of Scotland and Toronto-Dominion Bank.

For more background on the Enron lawsuit: www.universityofcalifornia.edu/news/enron