Plaintiff’s lawyer William Lerach is already looking to make a handsome $1 billion fee as lead counsel in the main Enron class action securities fraud lawsuit. Now, he’s looking for a little more from an Enron spinoff.
Yesterday, Lerach’s firm filed a lawsuit (press release here) in state district court in Houston over the proposed management leveraged-buyout of Houston-based oil and gas pipeline operator, Kinder Morgan Inc. (previous posts here and here). A lawsuit filed last week in Kansas on similar grounds beat Lerach’s lawsuit to the courthouse door in the race to be the first lawsuit to challenge the proposed leveraged buyout.
As one would expect, Lerach’s lawsuit contends that KM’s officers and directors violated state law by proposing a price of $100 per share, which it said was “grossly inadequate and unfair.” Of course, that allegation is pure speculation at this point in that the proposed buyout is still subject to being outbid by a superior offer for the company. Expect the state court lawsuit to be removed by KM to federal court rather quickly, where it will likely rest fallow while either the proposed buyout or a superior proposal for the company is worked out.