Credit Suisse Wins Enron Litigation

On March 5, 2009, the United States District Court for the Southern District of Texas in Houston granted the motion of the Credit Suisse defendants for summary judgment, dismissing all claims against them in the long-running Enron shareholders litigation, Newby v. Enron.

The original complaint against Credit Suisse and numerous other financial institutions was filed in April 2002 as a putative class action by purchasers of Enron securities after Enron filed for bankruptcy protection. Plaintiffs, who sought $40 billion in damages, alleged that Credit Suisse and other investment banks violated the securities laws by engaging in transactions with Enron which Enron allegedly misreported in its public financial statements. In the intervening almost seven years, the litigation became the model for complex, multi-jurisdictional litigation. While several financial institutions and other defendants settled, Credit Suisse and five other banks continued to litigate. In March 2007, in a discretionary appeal from the District Court’s class certification order, the U.S. Court of Appeals for the Fifth Circuit reversed the class certification decision and rejected the plaintiffs’ liability theory against the remaining financial institution defendants. In January 2008, the U.S. Supreme Court denied plaintiffs’ request to review the Fifth Circuit’s opinion. Judge Melinda Harmon’s March 5 ruling implements the Fifth Circuit and Supreme Court rulings, and also rejects plaintiffs’ belated attempt to create a new theory of liability.

Cravath partner Richard W. Clary led a team that included partners Julie A. North and Darin P. McAtee to represent Credit Suisse throughout this litigation. Cravath has also acted for numerous Credit Suisse entities in various Enron-related litigation in federal, state and bankruptcy courts. In addition to his role as lead counsel for Credit Suisse, Rich has acted as the principal courtroom spokesperson for the financial institution defendants as a group in the federal class action and related coordinated cases. Rich was also appointed by Judge Harmon and the judge presiding over the Enron bankruptcy proceedings to be the lead counsel for all the financial institution defendants in court-ordered mediation efforts.