The University of California has long been the leader in academics and research; in the wake of the Enron collapse, it now leads a corporate lawsuit.

On Feb. 15, a Houston judge selected the University of California to lead a multibillion-dollar class-action lawsuit against 29 of Enron Corp.’s senior executives and former auditor Arthur Andersen, LLP. The lead plaintiff in class-action cases helps manage and monitor the litigation.

The university’s general counsel James Holst said that participating in the lawsuit is an unusual step for the university, but that it is justified by the “”unique circumstances”” of the Enron collapse.

About 60 lawsuits were combined into one class-action case, which the university joined Dec. 21, 2001. The lawsuit alleges that Enron executives profited from misrepresenting the company’s financial situation.

The university lost $145 million in the Enron bankruptcy, based on the 2.2 million shares it held. David Russ, the UC treasurer, said that Enron stock composed three-tenths of 1 percent of the UC portfolio, which is valued at $54 billion.

“”The loss will have no impact upon [UC] retirement benefits,”” Russ said in a statement. “”Nonetheless, the university feels a strong obligation to recover money that rightfully belongs to the university.””

U.S. District Judge Melinda Harmon chose the University of California over a Florida-New York group and an Ohio-Washington-Georgia-Alabama group. Each group lost about $400 million.

In her ruling Harmon said the Florida-New York group did not persuade her that it was “”the kind of cohesive group envisioned by the statute for lead plaintiff.””

The lead plaintiff in class-action cases is typically the party that has suffered most. The Florida state pension fund lost $325 million, the most of any party in the case.

Harmon said that because the University of California was a single investor it could coordinate the legislation better than the other groups that sought lead-plaintiff status.

San Diego attorney William Lerach will provide lead counsel for the case. He is a partner in class-action law firm Milberg Weiss Bershad Hynes & Lerach, LLP, which has recovered $20 billion for investors in hundreds of securities fraud cases.

Lerach’s firm has also been accused of filing frivolous lawsuits and of charging excessive legal fees, and is also being investigated by a federal grand jury for allegedly paying clients to participate in lawsuits.

“”The court is aware of the highly publicized criticism of Bill Lerach,”” Harmon stated, but also wrote that the firm “”stands out in the breadth and depth of its research and insights.””

The University of California would not say what it intends to pay Milberg Weiss, but UC spokesman Trey Davis said the expected commission was “”considerably lower than the 15 percent to 18 percent average.””