WASHINGTON -- Following a U.S. Supreme Court decision last month that investors cannot bring a securities fraud case that is over three years old, a group of investors will petition the high court to consider a key issue raised by the controversial decision, an attorney for the buyers said Friday.

The question is whether the ruling in Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson applies only to future cases or to cases currently pending in federal courts, said Franklin Gordon Allen 3d, a partner with Allen, Kilmer, Schrader, Yazbeck & Chenoweth in Portland.

If the case is retroactive, which many securities lawyers think is likely, it could wipe out key parts of a number of major securities fraud cases now pending in the federal courts, including litigation against nursing home operator First Humanics Corp.

The Supreme Court ruled June 20 that securities fraud cases, including those in the municipal bond arena, must be filed within one year after the fraud is discovered and no later than three years after the fraud took place. The case applies to all securities markets, but it is viewed by opponents as having a particularly onerous impact in the municipal arena, where investors often do not detect fraud until years after bonds are issued. One reason for this impact is that bond deals are frequently structured with reserve and escrow funds under which missed interest payments would not occur for over two years.

The ruling was delivered in a case brought by a group of investors that bought shares in limited partnerships for the purchase and leasing of computer equipment between 1979 and 1981. The deals, designed as tax shelters, were put together by Lampf Pleva, a New Jersey law firm. The investors sued the firm in 1986 under the anti-fraud provisions of the federal securities laws when the partnerships failed and the Internal Revenue Service began barring the federal tax benefits of the deals.

The court said the decision applies to the investors in the case at hand, even though they did not know such a three-year limit would later be imposed by the Supreme Court. The decision is silent on whether other pending lawsuits are covered, but since it applies in this case, most lawyers are reading the decision as retroactive across the board.

The court's decision to apply the three-year limit to the limited partnerships case drew a strong dissent from Justice Sandra Day O'Connor. "In holding that respondent's suit is time-barred under a limitations period that did not exist before today, the Court departs drastically from our established practice and inflicts an injustice on the respondents."

"It's a long shot," said Mr. Allen, when asked what his firm's chances are of getting the Supreme Court to rehear the retroactivity question. But the "gut" feeling out there among lawyers is that the courts will view this as retroactive, he said, noting that he has received a number of calls from distressed lawyers. "Not many people are taking much comfort," he said.

Meanwhile, lawyers for a group of municipal bond investors whose federal fraud case against nursing home operator First Humanics Corp. may be defunct as a result of the ruling are turning the heat up on bond trustees in the case. The lawyers now charge that First Humanics should have tipped off investors about the impending defaults in time to take action.

David Guin, a partner with municipal default attorneys Ritchie and Rediker of Birmingham, Ala., said Friday his firm amended the complaint to add four trustee banks as defendants in claims under the Racketeering Influenced and Corrupt Organizations Act. RICO claims are not affected by the Supreme Court ruling.

"When we originally filed, we did not include indenture trustees on the RICO claims," Mr. Guin said. "But in light of Lampf and the potential retroactive implications," such claims are now being brought against SouthSide National Bank in St. Louis; Dixon National Bank in Dixon, Ill.; First of America Bank in Dekalb, Ill.; and Bank One Indianapolis, he said.

He said the banks breached their fiduciary duty to bondholders by not advising them of what was wrong with the deals so that they could take legal action within the new three-year limit.

Meanwhile, representatives of municipal bond trustees said last week they are examining the Supreme Court's ruling closely and will alert trustees about its implications soon.

"We need to move fast," said Jeffrey Powell, vice president of the First National Bank of Chicago, a primary drafter of new trustee disclosure guidelines expected to soon be released by the American Bankers Association's corporate trust committee. "We've got to get the word out that this is happening, that there is a danger out there, and that they have to be careful. They have to have any warning system [for bondholders] in place."

"It's a revolutionary decision," said securities lawyer David Lewis, a partner with Mandell, Lewis & Goldberg in Vienna, Va., about the Supreme Court decision. Lewis, whose firm represents municipal bond dealer Howard, Weil, Labouisse, Friedrichs Inc. in securities matters, added, "There's no question it will alter securities litigation."

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