This Could Get Ugly

From page one of today’s Chronicle business section:

GALVESTON — American National Insurance Co. and its subsidiaries lost about $20 million in the Enron Corp. stock crash because Enron executives and independent accountants lied about the energy giant’s worth, an American National attorney said Wednesday.

Trying to recoup losses on Enron stock, Galveston-based American National has filed a lawsuit against the accounting firm Andersen, which audited Enron’s books, and against 29 present and former Enron directors and officers. The firm and Enron officials deliberately defrauded investors, American National maintains.

“They lied,” said Galveston attorney Andrew Mytelka, who filed the lawsuit Dec. 27 in Galveston state District Judge Norma Venso’s court. “I can’t tell you all the ways in which they lied, but I believe they’ve lied to the public about what the true debt at the company was.

“It was a long-term strategy. If you read through our petition, you’ll see how all these directors and officers walked away with hundreds of millions, and they left shareholders and employees with nothing.”

Later in the article, attorney Andrew Mytelka liked Enron to a Ponzi scheme. Ouch. I think they have zero chance of winning, but it ought to be fun to watch. Stay tuned.

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