JPMorgan, TD settle Enron 'Megaclaims' suit
Tuesday, August 16th 2005, 8:43 am
By: News On 6
NEW YORK (AP) _ Two banks agreed on Tuesday to pay at least $420 million to settle their parts of the ``Megaclaims'' lawsuit filed by Enron against 10 banks, alleging they ``aided and abetted fraud'' and could have prevented the energy trader's collapse.
JPMorgan Chase & Co. agreed to pay $350 million in cash to Enron Corp. and Toronto Dominion Bank agreed to pay $70 million. The companies also will forgo certain claims in Enron's bankruptcy proceedings while agreeing to pay more money to Enron for the ability to pursue others.
Enron said the bankruptcy claims that are part of the JPMorgan settlement have a value of $660 million, and that the settlement with JPMorgan could reach up to $1 billion. Toronto Dominion agreed to forgo claims value at almost $56 million, while paying $60 million to allow claims valued at $320 million that the company transferred to third parties.
New York-based JPMorgan said it does not expect its settlement, which is subject to the approval of the bankruptcy court, to have a ``material adverse impact'' on earnings.
``With today's agreement, we have put behind us another significant piece of our Enron exposure,'' said William B. Harrison Jr., JPMorgan's chairman and CEO, in a prepared statement.
JPMorgan agreed in June to pay $2.2 billion to Enron shareholders to settle its part of a class-action lawsuit, after initially turning down a chance to settle for significantly less.
Earlier this month, Canadian Imperial Bank of Commerce agreed to pay $250 million in the Megaclaims suit, while also agreeing to a $2.4 billion settlement _ the largest so far _ in the class-action lawsuit.
Enron said the settlements announced Tuesday bring payments in the Megaclaims case to $735 million. In addition, banks have agreed to forgo or pay to pursue claims valued at around $3 billion.
Financial institutions still to settle the Megaclaims suit include Barclays PLC, Citigroup Inc., Credit Suisse First Boston Inc., Deutsche Bank AG, and Merrill Lynch & Co.