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Finance reports adding cost

Enron documents cause attorneys to split

An agreement fell apart Wednesday between attorneys representing Enron shareholders on how to protect financial documents held by the company's former auditor, Arthur Andersen.

U.S. District Judge Melinda Harmon told the lawyers on Tuesday to draft a proposed temporary restraining order, and later that night they said they had done so.

But Wednesday, attorneys representing pension funds in New York City and Florida pulled out of the agreement.

Now Harmon will consider two proposals, one submitted by the remaining plaintiffs' attorneys and the other filed by Arthur Andersen.

Harmon said she would make her decision "soon."

Bill Lerach, attorney for Amalgamated Bank, which manages a pension fund holding Enron stock, told Harmon on Wednesday that until that morning all plaintiffs' attorneys were in agreement.

He said the New York City and Florida plaintiffs' attorneys are opposed to the immediate deposition of a former Andersen employee and five others.

The other plaintiffs' attorneys agreed that depositions should be taken within weeks from Arthur Andersen's former lead auditor, David Duncan, four Andersen employees placed on administrative leave and Andersen's in-house counsel, Nancy Temple.

Duncan was fired last week after Andersen disclosed documents had been shredded at its Houston office.

Lerach said the depositions are needed before their memories fade about which documents were destroyed.

The attorneys also want to ensure that Andersen retains all Enron-related documents and that the records are being preserved and protected as Andersen officials have said.

"We don't want to be in a position to take Andersen's word for it," Lerach said.

Paul Yetter, an attorney for Florida's state board of administration, told Harmon he was willing to wait on an internal Andersen report about the document destruction.

"The report is coming in three weeks and this issue may be over," Yetter said. "If that's not the case, we will be back before the court."

Yetter also said he did not want to interfere with federal investigations by the Securities and Exchange Commission and the departments of Justice and Labor.

Rusty Hardin, Arthur Andersen's attorney, said during the hearing that he opposes taking depositions at such an early stage in the process because it would disrupt a "meaningful" federal investigation.

He proposed an order stating that the company "segregate, preserve and protect" all financial documents, recordings, e-mails and other relevant items.

Hardin said Andersen does not oppose allowing the plaintiffs' attorneys to inspect the facilities where Enron documents are being stored.

"This is to enable plaintiffs' counsel to satisfy themselves as to the security and safety of the evidence stored at those locations," Andersen's order states.

Also Wednesday, the plaintiffs' attorneys, except those for New York City and Florida, filed a motion to request depositions of Ken Lay, who resigned as chairman Wednesday night, and other Enron executives.