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
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
"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