2 Lawyers Fight Settlement in Prudential Case

Two lawyers for investors in one of Prudential Securities’ largest partnership programs have challenged a settlement in a class-action lawsuit, alleging Thursday that Prudential’s witnesses misled the judge who approved the $90-million pact.

The settlement involves the Prudential Energy Income Funds, a group of oil and gas limited partnerships sold to 130,000 investors.

Depending on whether a stay is granted while a U.S. Court of Appeals considers the case, lawyers said, the appeal could significantly delay payments to investors. Prudential had said payments were to go out beginning in early April.

Prudential spokesman William J. Ahearn said the brokerage had no comment on the appeal.

The latest court action was filed by attorneys Stuart C. Goldberg of Austin, Tex., and Jeff D. Ferentz of Newport Beach on behalf of two former Prudential customers. The lawyers contend that the settlement is inadequate.

Goldberg said the lawyers will argue in the appeal that Prudential’s expert witnesses lied to a federal judge in a hearing on the fairness of the settlement. U.S. District Judge Marcel Livaudais Jr. in New Orleans approved the settlement after the January hearing.

At the time, Goldberg argued that there was evidence of systemic fraud by Prudential Securities in sales of the partnerships. Prudential witnesses denied the allegations.

But Goldberg said in an interview Thursday that he since has obtained new evidence showing that the witnesses’ testimony wasn’t truthful.