Shredding Stops, Depositions to Start in Enron Case

January 25, 2002 ( - A federal judge finally stepped in to stop the shredding of Enron-related documents by Arthur Andersen LLP.

US District Judge Melinda Harmon said Anderson workers must preserve all Enron-related documents as far back as 1994 and gave plaintiff lawyers the right to inspect them.

Texas Mess?

The ex-Enron auditing firm is already under a Texas judge’s order prohibiting any further shredding of Enron-related documents. Attorneys say the files are under guard and shredding has ceased.

Chicago-based Andersen acknowledged two weeks ago the Houston office had shredded a significant but undetermined number of documents related to Enron audits last fall – as federal regulators started investigating possible accounting improprieties.

The plaintiffs’ attorneys are suing 29 current and former Enron executives and board members for more than $1 billion they gained by selling company stock from October 1998 through November last year.

Plaintiffs in addition to Amalgamated Bank include the Regents of the University of California and pension funds for Georgia, Ohio and Florida.

The once mighty Houston energy trader is now the subject of dozens of lawsuits including a flurry of complaints about how Enron executives handled the company stock portion of their 401(k) plan in the weeks before Enron collapsed.

Employees have complained they lost billion of dollars by loading up on Enron stock and then now being allowed to sell it when its share value plummeted late last year.