Enron report pulls up Linklaters, Shearman

The report is expected to question advice provided by firms including Linklaters, Shearman & Sterling and King & Spalding.

The report is the second to be filed with the US Bankruptcy Court of the Southern District of New York by examiner Neal Batson. Batson's first report drew attention to advice given by Andrews & Kurth and Vinson & Elkins on several Enron structured finance deals. Bankruptcy partner at Alston & Bird Batson suggested that the firms issued “true-sale opinions” to bless a number of deals, which now appear to have been loans improperly accounted for by Enron. Both firms deny any wrongdoing.

Linklaters is being advised by Sullivan & Cromwell partner James Carter, who reportedly confirmed that the firm gave Enron tax advice on a deal with Barclays Bank.

Carter is quoted in Washington's Legal Times as saying: “Linklaters was operating on the basis of facts described to them by their client, and now it turns out those facts weren't correct. Sometimes lawyers can be caught in a cross-fire in these situations.”

Linklaters refused to comment on Carter's remarks, except to say that the firm had “advised on a particular deal involving a sale of assets by Enron. This advice was not tax-related”. Carter was unavailable for comment.

A Shearman spokesman said: “We were asked for documents by the examiner. Beyond that, we can't comment on a court-sealed report we haven't seen.”

King & Spalding, which opened a London office this month, would not comment.