Enron's top leaders will all be tried in Houston on criminal charges connected to the scandal-ridden company's 2001 collapse, a federal...

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HOUSTON — Enron’s top leaders will all be tried in Houston on criminal charges connected to the scandal-ridden company’s 2001 collapse, a federal judge ruled yesterday.

U.S. District Judge Sim Lake’s decision denies claims from company founder Kenneth Lay, former Chief Executive Officer Jeff Skilling and former top accountant Richard Causey that they couldn’t get a fair trial on their home turf.

“Although news coverage about Enron’s collapse, this case, and these defendants has been extensive, the court is not persuaded that it has been so inflammatory or pervasive as to create a presumption that there exists a reasonable likelihood that pretrial publicity will prevent a fair trial,” Lake wrote in a 24-page opinion.

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All three have pleaded not guilty. Lake has not scheduled trial dates for any of the three.

Jeffrey Skilling is former chief executive officer.

Skilling made the initial request to have the trial moved, citing a survey of local residents conducted on his behalf that said too many potential jurors associate his name with words like “snake” and “evil.” Alternate sites suggested were Atlanta, Denver, New Orleans or Phoenix.

Prosecutors responded that two Houston-area juries already had considered Enron-related cases and returned reasonable verdicts.

Skilling and Causey each face more than 30 counts of fraud, conspiracy and other charges for allegedly participating in or knowing about various schemes to fool investors into believing Enron was healthy in the years leading to its collapse.

Seven fraud and conspiracy counts against Lay allege he took the helm of the conspiracy upon resuming as CEO when Skilling resigned less than four months before the company crashed.

Lay also faces charges of bank fraud and lying to banks in a separate case involving his alleged use of personal loans to buy Enron stock on margin without making his purchase intentions clear to the lenders.

Rick Causey was Enron’s former top accountant.

Evidence phase ends in Ovitz firing case

GEORGETOWN, Del. — The evidence phase of a long-running trial over Walt Disney Co.’s 1996 firing of Michael Ovitz from the job of president ended yesterday.

Yale Law professor John Donohue, in his third trip to the witness stand, said Disney could have fired Ovitz for cause without paying him a $140 million severance package and without risking even larger damages for fraud and defamation.

Trial of the case began in October, and no decision is expected until after lawyers have exchanged briefs presenting their views of what the evidence showed.

Disney Chief Executive Michael Eisner, Ovitz and members and former members of Disney’s board of directors testified in the case, which was brought by shareholders seeking to recover some of the severance package for the company.

Investors attempted to prove Disney was lax in hiring and firing Ovitz, handing the one-time Hollywood power broker a contract that made it more profitable for him to fail than to succeed.

Ovitz said the one-time friend who recruited him to the second spot at Disney failed to stand by him when other executives who had been passed over for the job balked at answering to the newcomer.

In the concluding phase of the trial, high-profile principals gave way to expert witnesses who debated whether Disney should have fired Ovitz for cause or given him the no-fault termination and $140 million severance.

Defense experts testified last week that a for-cause firing would have cost Disney much more than $140 million.


— Dow Jones Newswires