Enron Employee Committee Receives Court Approval of Settlement from the Baxter Estate
New York – May 1, 2008 – Cooley Godward Kronish’s bankruptcy litigation team, acting as counsel to the Enron Employee Committee, today obtained a court-approved settlement of $850,000 from the Estate of Cliff Baxter, a former “Top Hat” executive of Enron. To date, the value of recoveries achieved by Cooley on behalf of the Enron Employee Committee exceeds $40 million. Cooley’s team representing the Committee is led by bankruptcy partners Ronald Sussman and James Beldner.
Prior to his committing suicide in the wake of the Enron bankruptcy scandal and within weeks of the Enron bankruptcy filing, Baxter had accelerated and taken $1.3 million of his deferred compensation benefits. That action was challenged by the Enron Employee Committee in a complaint alleging causes of action in preference and fraudulent transfer.
“After protracted litigation with the Baxter Estate over liability issues and the value of the settlement, an agreement was reached which returns to Enron’s creditors the lion’s share of the wrongfully obtained proceeds,” said Sussman. “The beneficiaries of the settlement include former Enron employees who waited to be paid, along with the rest of Enron’s general creditors,” he continued.
During the course of the litigation, the U.S. Supreme Court held arguments in the Anna Nicole Smith case relating to her ex-husband’s estate. The legal issues argued before the high court were expressly determinative of the legal challenge made by the Baxter estate to the action brought by the Cooley team on behalf of the Enron Employee Committee.
The litigation with the Estate of Smith’s deceased husband brought to a head a dispute involving the jurisdictional power of the United States Federal Bankruptcy courts over the jurisdictional power of state courts in probate proceedings. A similar challenge was raised by the Enron Employee Committee litigation against the Baxter estate.
“Ultimately, the Supreme Court’s ruling in the Anna Nicole Smith case was instrumental in our team prevailing against the Baxter estate,” said Beldner.
In addition to Sussman and Beldner, the Cooley team prosecuting claims on behalf of the Enron Employee Committee included associates Nicholas Smithberg, Gregory Plotko, Seth Van Aalten and Michael Klein.
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