Enron Corp. on Friday announced it had reached a $144 million settlement with Barclays in its so-called "MegaClaims" litigation. Enron's settlements with eight financial institutions now total $928 million.
Enron emerged from bankruptcy two years ago, and as of October, it had distributed nearly $9.4 million to its creditors.
The original MegaClaims complaint claimed 10 banks and financial institutions had aided and abetted breaches of fiduciary duties; aided and abetted fraud; and engaged in civil conspiracy. The lawsuit also included bankruptcy-based claims relating to equitable subordination; preferential and/or fraudulent transfers; and the recharacterization of certain transactions.
Enron's estate claimed the banks had financed some of company's dubious transactions to obtain large fees. None of the banks that have settled have admitted any wrongdoing. Most of the banks sued also are Enron creditors.
In addition to Barclays, financial institutions that have settled include Merrill Lynch & Co., J.P. Morgan Chase & Co., Royal Bank of Canada, Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Credit Suisse First Boston (see Daily GPI, July 7). Citigroup Inc. and Deutsche Bank AG have not reached agreement with the bankrupt company.
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