Nine investment banks added in Enron lawsuit

HOUSTON >> Nine investment banks financed lucrative schemes that helped Enron Corp. maintain its pre-collapse image as a profit powerhouse, according to attorneys who added the banks to a shareholder lawsuit today.

William Lerach, the lead attorney in the case, said the banks' knowledge of the questionable partnerships and other transactions gave them an inside view of Enron's financial condition as they sold securities to investors.

The 485-page amended complaint was filed this morning in the Houston federal court handling the case, the University of California, the lead plaintiff, said.

"Every bank bears significant complicity for their involvement," Lerach said.

The banks named in the suit are J.P. Morgan Chase & Co.; Citigroup Inc.; Credit Suisse First Boston USA Inc.; Canadian Imperial Bank of Commerce (CIBC); Bank of America Corp.; Merrill Lynch & Co.; Barclays Bank PLC; Deutsche Bank AG and Lehman Brothers Holding Inc.

The partnerships and deals, backed by Enron stock and in part developed and funded by the banks, allegedly hid debt and inflated profits. Their ability to go unnoticed depended on a high stock price, since drops in shares triggered debt payments that would require Enron to issue more shares and reduce shareholder equity.

Enron shares started slipping from a high of $90 in August 2000, later invoking those triggers. It fell to less than a dollar by the time Enron descended into bankruptcy Dec. 2.

The suit also alleges that Kenneth Lay, Enron's former chairman and chief executive, sold $180 million in company stock in the three years leading to Enron's collapse, not the $101 million noted in public filings.

Nation's gas prices jump by more than 8 cents

CAMARILLO, Calif. >> Gasoline prices, rising steadily since February, jumped more than 8 cents in the past two weeks.

Friday's weighted price per gallon for all grades and taxes was $1.46, up 8.44 cents per gallon from March 22, according to the Lundberg survey of 8,000 gas stations nationwide. Since Feb. 8, prices at the pump have increased 32 cents. The national weighted average price for regular was $1.43 per gallon.

HP must face trial over vote claim, judge rules

WILMINGTON, Del. >> Hew-ett-Packard Co. must go to trial on director Walter Hewlett's claims of vote-buying in the proxy contest over the company's $18.7 billion purchase of Compaq Computer Corp., a Delaware judge ruled.

Delaware Chancery Judge William Chandler III denied the motion by the world's second-largest computer company to dismiss the challenge by the son of its co-founder. Trial is scheduled to start April 23.

Bridgestone/Firestone to supply tires to GM

TOKYO >> The U.S. subsidiary of Japan's Bridgestone Corp. has concluded a contract to provide tires to American automaker General Motors Corp., a newspaper reported yesterday.

Bridgestone/Firestone, the U.S. unit, will begin supplying the tires as early as this month, the Nihon Keizai economic daily said. It did not identify its source for the report. Spokesmen at Bridgestone were unavailable for comment.

The paper said that Bridgestone/Firestone estimated it would provide about 2.5 million tires a year for 500,000 vehicles under the contract. Bridgestone's business has been hurt by a tire recall at Bridgestone/ Firestone. In the summer of 2000, the U.S. subsidiary recalled 6.5 million tires suspected of losing their tread.