If you use taxpayer money
It becomes harder to sue
The Enron fraud continues
Because they made sure not to change the rules
Because they knew exactly what they were doing
Or Congress is one big fat failure!
Or maybe it's bot!
Law.comU.S. Could Emerge as Major Player in Suits Stemming From Financial CrisisMonday September 22, 3:02 am ET Anthony Lin, New York Law Journal
In the wake of most economic crises, the silver lining for lawyers and law firms is a surge in litigation.
The present mess on Wall Street will no doubt spill into the courtroom too, though the players may be somewhat different this time around.
When the economy took a dive at the beginning of the decade amid a rash of accounting scandals, securities class action lawyers were center stage. William S. Lerach carrying boxes of documents into federal court in Houston to file a suit on behalf of Enron Corp. shareholders is one of the iconic images of that period.
But the massive scale of government intervention may limit the scope of private action in the current crisis. Instead, the government, especially if it proceeds with a proposal for a bailout agency similar to the Resolution Trust Corporation (RTC) created in response to the 1980s Savings & Loan crisis could emerge as the biggest litigant of all.
"We're really in uncharted territory here," Evan Chesler, presiding partner of New York-based Cravath, Swaine & Moore, said of litigation that could emerge from government takeovers of financial institutions like insurance giant American International Group.
Chesler said a certain amount of litigation would likely focus on actions taken by companies before the government became involved. But the government's actions in bailing out financial institutions, he said, raised the possibility of litigation on behalf of taxpayers.
"Whenever taxpayers' money is used in that manner, that's a possibility," Chesler said.
The cost to taxpayers is expected to be enormous. The government agreed Tuesday
