U.S. Bankruptcy Court Rules in Favor of Enron Employee Committee
New York, NY (Sept. 19, 2006) -- In a decision dated September 15, 2006, United States Bankruptcy Court Judge Arthur J. Gonzalez of the Southern District of New York decided in favor of the creditors of Enron in an action brought by Kronish Lieb Weiner & Hellman LLP, representing the Employee Committee against the Estate of Cliff Baxter for the $1.3 million Baxter took in the month before Enron's bankruptcy filing.
Baxter was a "Top Hat" executive of Enron who accelerated his deferred compensation benefits taking the money in the month before Enron's collapse ahead of other creditors. Baxter took his own life shortly thereafter. The lawsuit against the Baxter Estate was commenced by the Employee Committee on behalf of the Enron creditors, alleging causes of action in Preference and Fraudulent Transfer.
"Although we are gratified by the court's ruling, this case is tragic on many levels and no one is pleased under the circumstances," said Ronald R. Sussman,the Kronish partner leading the team prosecuting the litigation and who argued the case.
The Baxter Estate argued, among other things, that the bankruptcy court did not have federal jurisdiction to hear the case under the so-called probate exception to federal jurisdiction. Mr. Sussman said that the defendant sought to avoid liability in the same way that the family of the deceased sought to defeat Anna Nicole Smith in her litigation relating to her ex-husband's Estate before the United States Supreme Court. Mr. Sussman and his litigation team attended the arguments in the Anna Nicole case at the invitation of the U.S. Supreme Court clerks office, given the similarity of the issues facing them before the Enron court.
In addition to Mr. Sussman, the Kronish team included partners James A. Beldner and Richard S. Kanowitz, together with associates Nicholas Smithberg, Gregory G. Plotko, Seth Van Aalten, Michael A. Klein and Noah Falk.
About Kronish Lieb
Founded in 1958, Kronish Lieb Weiner & Hellman LLP is a premier full-service law firm based in Manhattan. Servicing clients ranging from Fortune 500 companies to start-ups, the firm is organized according to seven practice areas – Litigation; Bankruptcy & Restructuring; Corporate; Real Estate; Tax; Personal Representation; and Structured Real Estate Investments. Kronish Lieb is known for its commitment to client service, as reflected in the recent Chambers USA Guide, which said: Clients describe a troupe of dedicated and first-class attorneys renowned for ‘thoroughly marvelous work.’ For additional information, please visit www.kronishlieb.com.