Enron Corp. said Friday it had reached agreement with Canadian Imperial Bank of Commerce (CIBC) to settle CIBC’s portion of the Enron MegaClaims litigation. CIBC’s settlement with Enron follows one by the bank earlier in the week, when it agreed to pay $2.4 billion to settle the largest class action lawsuit to date to settle fraud claims by investors (see Daily GPI, Aug. 3).

According to the terms of the agreement announced Friday, CIBC will pay Enron $250 million in cash and fully subordinate approximately $40 million in claims held by the bank. CIBC also agreed to pay Enron $24 million to permit Enron to allow approximately $80 million in claims transferred by CIBC to third parties.

“We are pleased that, to date, Enron has reached agreements in the MegaClaims litigation that have added approximately $300 million in cash to the estate,” said Enron’s Interim CEO Stephen Cooper.

The agreement, which resolves all open issues between Enron and CIBC, remains subject to the approval of the U.S. Bankruptcy Court for the Southern District of New York.

Financial institutions still to settle with Enron, and not related to the class action lawsuits against them, include Barclays plc; Citigroup Inc.; Credit Suisse First Boston Inc.; Deutsche Bank AG; J.P. Morgan Chase & Co.; Merrill Lynch & Co. Inc.; and The Toronto-Dominion Bank.

Enron’s complaint includes claims that the banks aided and abetted breaches of fiduciary duties; aided and abetted fraud; and engaged in civil conspiracy. The lawsuit also includes bankruptcy-based claims relating to equitable subordination; preferential and/or fraudulent transfers; and the re- characterization of certain transactions.

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.