The U.S. Supreme Court said Friday it will review an appeal by CalPERS that seeks to revive a lawsuit brought by the pension fund against Lehman Brothers.
CalPERS lost $300 million when the bank went bankrupt, and has only recovered about $118 million from other lawsuits.
Details from SFGate:
[CalPERS’] suit against other underwriters and financial institutions, whom it accused of misrepresentations in the investment offerings, was dismissed by federal courts in New York, where all Lehman-related cases were transferred. The courts said the three-year legal deadline for filing securities lawsuits had started to run in July 2007, when the bank made its first securities offering, so CalPERS’ February 2011 suit was too late.
CalPERS argued that the deadline should have been suspended when it joined the class-action suit, which was filed before the three-year deadline. The Supreme Court had ruled nearly 43 years ago that plaintiffs who take part in a class action can be allowed more time to file their own suits, but hasn’t yet decided whether such an extension applies to securities cases.
The justices indicated they would resolve that issue when they announced Friday that they had granted review of CalPERS’ appeal. The court has only eight members, following the death of Justice Antonin Scalia in February, so it may wait until the term that starts in October before hearing the case.