March 31, 2006
News in the "Practice" Enron Trial: Nigerian Barge Case
Posted by Christine Hurt

Barge Before we had the semester-long Lay/Skilling trial, there was the quickie Enron/Merrill Lynch Barge case.  This case has haunted me for various reasons:  I was outside counsel for Enron on deals similar to this; I represented many clients on deals similar to this one.  By "similar," I mean sales of energy-related assets or construction of energy-related projects.  Including barges.

Enough about me:  William Fuhs, the lowest-ranking Merrill Lynch player in the deal, was released on bail by the Fifth Circuit pending consideration of his appeal.  Oral arguments for all ML defendants (now in custody) were heard earlier in March.  After trial, all defendents had requested release pending appeal, but those requests were denied.  Fuhs was the only defendant whose attorney refiled that motion after oral argument, which must have gone exceedingly well for the defendants.  (According to Tom Kirkendall, Fuhs is represented by appellate guru Seth Waxman, who had a big SCOTUS argument earlier in the week.)  The standard for granting the motion is a substantial likelihood of reversal.  I think that the Fifth Circuit granted this motion is extremely good news for Mr. Fuhs (and his friends).  Remember, this is the Fifth Circuit we're talking about here, not the Ninth.  Larry Ribstein predicts a slap down of the prosecution's tactics as well.

So, why does the case haunt me?  Because I can't even recall how many conversations I had with other attorneys about what a "true sale" was under the FASB rules.  But in all those conversations, no one ever said, "Well, you have to be sure or someone goes to jail."

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