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JP Morgan settles Enron civil case

JP Morgan settles Enron civil case

NEW YORK – JP Morgan Chase & Co and Enron Corp yesterday agreed to a roughly US$1 billion settlement to Enron’s claims that the bank had played a role in the one-time energy trader’s collapse four years ago.

Terms call for JP Morgan to pay US$350 million in cash and to subordinate or pay for claims totalling another US$660 million. Enron placed the value of the settlement at about US$1 billion.The settlement is the largest of four that the Enron estate has reached to date in the so-called “Megaclaims” litigation.It is also the first with a US bank.In the case, Enron has asserted that 10 banks had aided and abetted the company’s collapse.On August 5, Canadian Imperial Bank of Commerce agreed to pay US$250 million in a similar settlement.Others reaching settlements include Royal Bank of Canada, which will pay US$25 million, and Royal Bank of Scotland Group, which is to pay US$41,8 million.The remaining banks yet to settle include Barclays Plc, Citigroup Inc, Credit Suisse First Boston, Deutsche Bank AG, Merrill Lynch & Co, and Toronto-Dominion Bank.Other terms of the latest settlement call for JP Morgan to give up certain contested claims it has filed in the Enron bankruptcy, the bank said.Meanwhile, Enron will allow the bank’s other claims and will dismiss all claims against JP Morgan.JP Morgan said the settlement would not have a material negative effect on its earnings.Enron’s bankruptcy filing was the largest ever at the time, and came after it was revealed that the company’s bogus bookkeeping had covered up billions of dollars in debt.It emerged from Chapter 11 bankruptcy proceedings late last year as a private entity and it is in the process of liquidating its remaining assets to pay its debts.The New York bankruptcy judge continues to oversee those payments.The judge must approve this settlement.- Nampa-ReutersEnron placed the value of the settlement at about US$1 billion.The settlement is the largest of four that the Enron estate has reached to date in the so-called “Megaclaims” litigation.It is also the first with a US bank.In the case, Enron has asserted that 10 banks had aided and abetted the company’s collapse.On August 5, Canadian Imperial Bank of Commerce agreed to pay US$250 million in a similar settlement.Others reaching settlements include Royal Bank of Canada, which will pay US$25 million, and Royal Bank of Scotland Group, which is to pay US$41,8 million.The remaining banks yet to settle include Barclays Plc, Citigroup Inc, Credit Suisse First Boston, Deutsche Bank AG, Merrill Lynch & Co, and Toronto-Dominion Bank.Other terms of the latest settlement call for JP Morgan to give up certain contested claims it has filed in the Enron bankruptcy, the bank said.Meanwhile, Enron will allow the bank’s other claims and will dismiss all claims against JP Morgan.JP Morgan said the settlement would not have a material negative effect on its earnings.Enron’s bankruptcy filing was the largest ever at the time, and came after it was revealed that the company’s bogus bookkeeping had covered up billions of dollars in debt.It emerged from Chapter 11 bankruptcy proceedings late last year as a private entity and it is in the process of liquidating its remaining assets to pay its debts.The New York bankruptcy judge continues to oversee those payments.The judge must approve this settlement.- Nampa-Reuters

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