In somewhat of an irony, Enron Corp. last week filed a complaint against six of its former banks and investment institutions, claiming that they gave the bankrupt company bad financial advice, which in turn contributed to its demise in late 2001.

The 280-page filing on Wednesday in U.S. Bankruptcy Court in New York alleges that Citigroup Inc., J.P. Morgan Chase & Co., Merrill Lynch & Co., Deutsche Bank AG, Barclays PLC and Canadian Imperial Bank of Commerce, and various subsidiaries and affiliates of those companies “bear substantial responsibility” by participating “with a small group of senior officers and managers of Enron in a multi-year scheme to manipulate and misstate Enron’s financial condition.”

The complaint states that the banks assisted Enron insiders by designing structured finance transactions “knowing” that the insiders were improperly accounting for the transactions. Enron claims the banks were motivated by “the irresistible temptation of enormous fees and other revenue.”

The complaint seeks recovery of an unspecified amount through the recovery of payments made to the banks, by subordinating some claims made by the banks against the Enron estate and through damages.

Enron’s lawsuit is an attempt to recoup as much as possible for its creditors, even though it is accused of fraud, according to bankruptcy experts. A report earlier this year by court-appointed trustee Neal Batson focused on the banks named in Enron’s lawsuit. The banks, in turn, are claiming they are owed billions of dollars.

Mediation sessions with Enron shareholders and financial institutions are scheduled to begin Monday before U.S. District Judge William C. Conner in New York.

In other news, nearly $53 million in deferred compensation paid to 162 of Enron’s former best and brightest could be divided among the bankrupt trader’s creditors under a ruling last Monday in New York.

Judge Arthur J. Gonzalez approved a request by a court-sanctioned committee of former employees to try and recoup the millions, which were paid to the former and current executives in the few weeks before the Houston company filed for bankruptcy.

The delayed compensation list does not include several of the more infamous names, including former Chairman Kenneth Lay, former CEO Jeffrey Skilling nor former CFO Andrew Fastow.

The 162 who received payments had delayed receiving a portion of their salary over the years as part of a retirement plan. However, all had withdrawn their funds about four weeks before the company filed for bankruptcy. Gonzalez ruled that under bankruptcy law, this was an inappropriate grant because even though it was their money, the employees were effectively given preference over creditors. Preferential payments may not be made during the 90 days before a bankruptcy filing.

The 162 employees received 100% of the money they were owed, while many of the company’s creditors recovered less than 20%. The creditors are owed more than $60 billion.

Any of the 162 may avoid returning the compensation if they can prove it is a financial burden. Of the total, between $30 million to $40 million could be recovered, according to Enron lawyers.

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