Enron Corp. investors can’t sue the company’s former lenders as a group, a U.S. appeals court ruled, forcing individuals to pursue the banks independently for $40 billion in losses suffered in its 2001 collapse.

Today’s decision by the New Orleans-based court means Enron investors can’t combine efforts to recoup losses from banks such as Merrill Lynch & Co., Credit Suisse Group, and Barclays Plc. The decision is likely to foreclose thousands of ex-shareholders from recovering retirement funds invested in what was once America’s seventh-largest company, a New York-based litigator who represents companies in securitiesfraud cases, Robert Zito, said.

“It’s game over,” Mr. Zito, a partner at Schiff, Hardin, said. “Now that they can’t proceed as a class, most of the investors have no way to prosecute their claims. They don’t have the money to do it. They are done.”

Last week, Merrill, Credit Suisse, and Barclays asked the court to delay an April 16 trial in Houston federal court on claims they helped the bankrupt energy trader’s executives manipulate earnings. The lawyers urged the court to postpone the trial until it decided whether the lawsuit could proceed as a class-action.

Enron was the world’s largest energy-trading company, with a market value of as much as $68 billion, before it collapsed in December 2001. The bankruptcy, the secondlargest in American history after WorldCom Inc., wiped out more than 5,000 jobs and at least $1 billion in retirement funds.

“This is a terrible day for the victims of the Enron fraud,” Enron investor lawyer William Lerach said, who added he will appeal the decision by the New Orleansbased court.

A spokesman for Merrill Lynch, Mark Herr, and a spokeswoman for Zurich-based Credit Suisse, Victoria Harmon, said the banks are “pleased” with the ruling. A lawyer for London-based Barclays, David Braff, was traveling and didn’t immediately return calls or e-mails seeking comment.

Enron’s investors accused the Houston-based company’s banks of helping former chairman Kenneth Lay and ex-chief executive officer Jeffrey Skilling disguise debt as loans, finance sham energy trades and use off-the-books partnerships to hide losses and inflate revenue.

The banks claimed in court papers that shareholders shouldn’t be able to press their suit as a group because they can’t prove that the firms directly participated in the accounting fraud at Enron. U.S. District Judge Melinda Harmon in Houston, who was to preside over the trial, denied the banks’ request for a delay last month.

A federal jury in Houston convicted Lay and Mr. Skilling in May 2006 of fraud and conspiracy charges after a four-month trial. Lay died of a heart attack at age 64 in July. His conviction was thrown out because he didn’t have an opportunity to appeal.

Mr. Skilling, 53, was sentenced to more than 24 years in prison and is serving his term at a federal prison in Minnesota.