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Law Firm Seeks Hefty Fee Payout For Enron Suit
By Nathan Koppel
The Wall Street Journal
Wednesday, November 21, 2007

A San Diego law firm founded by trial lawyer William Lerach is seeking nearly $700 million in legal fees for itself and other plaintiff lawyers for work on the Enron Corp. securities litigation, according to a filing yesterday in federal court in Houston.

If approved, the fee payout would be the largest ever in a securities class action.  The plaintiffs in the Enron suit, which was filed in 2001, have so far recovered $7.2 billion in settlements from bankers, accountants and lawyers alleged to have participated in a scheme to defraud investors of Enron.

Coughlin Stoia Geller Rudman & Robbins LLP will seek a fee equal to 9.5% of the settlement, according to the court filing, which is the first to specify the precise percentage.

Earlier this year, Mr. Lerach resigned from the Coughlin firm and pleaded guilty to a conspiracy charge in connection with a long-running prosecution of his former firm, Milberg Weiss LLP.  Milberg has denied wrongdoing.

The Enron fee "in absolute terms is a large number but everything about the Enron case involves large numbers," said Trey Davis, a spokesman for the Regents of the University of California, the lead plaintiff in the Enron litigation.  "When you look at work the legal team has conducted and the results, I think most people would objectively consider this a very reasonable fee request."  In percentage terms, the fee request would be in line with awards in other large securities class-action settlements.

"This is the largest recovery ever obtained for shareholders victimized by corporate fraud," said Dan Newman, a spokesman for Coughlin Stoia.  After the fees are paid, he said, "the bottom line is that the defrauded shareholders will recover more than 90% of the settlement."

The filing, which laid out a proposed plan to distribute the $7.2 billion settlement, indicated that plaintiffs will seek court approval of the legal fees early next year.  Milberg Weiss is in line to claim a share, according to terms of an agreement reached in 2004, when Mr. Lerach left Milberg to form his own firm.

This month, plaintiffs firms sought a $460 million fee in a securities class action against Tyco International Ltd.  The judge in the case hasn't approved the request.  To date, the largest fee awarded in a securities class action is the $336 million payout in the WorldCom Inc. securities litigation, according to a filing in the Tyco case.

Write to Nathan Koppel at nathan.koppel@wsj.com

http://online.wsj.com/article/SB119560428100999892.html?mod=us_business_whats_news