CS pays to settle Enron bankruptcy claim
The Credit Suisse Group in Zurich is to pay $90 million (SFr109.5 million) to the Enron Corporation to settle claims that it helped the energy trader commit fraud.
The amount agreed is in a draft settlement of claims against United States subsidiaries of Switzerland’s second-largest banking group.
Under the terms of the settlement with Credit Suisse First Boston and Donaldson Lufkin & Jenrette (DLJ), Enron’s bankruptcy estate will in return allow $92 million in claims from Credit Suisse.
CS said in a statement from New York that the settlement payment was covered from its existing reserves and that by entering into the agreement, the group did not admit any liability or wrongdoing.
It added that the settlement did not cover separate litigation by Enron to recover payments in connection with other transactions or Enron-related cases.
Megaclaims
Enron, which went bankrupt spectacularly in late 2001, has now settled with at least six banks in its so-called “megaclaims” litigation, which alleged that a number of banks “aided and abetted fraud” and could have prevented the company’s collapse.
It said Credit Suisse’s payout was lower than those of some other banks because it was involved in fewer transactions with the company.
The company added that the settlement would allow it to avoid the costs and uncertainties of further litigation.
“This settlement is further evidence of the proactive steps we continue to take to resolve the myriad issues with respect to the Enron estate,” Enron’s chairman John Ray said in a statement.
He added that he was eager to settle with other banks in the case, which includes Barclays, Citigroup, Deutsche Bank, Fleet National Bank and Merrill Lynch.
Enron emerged from Chapter 11 protection in November 2004 and exists to liquidate assets and pay debts.
The Credit Suisse settlement now requires approval by the US Bankruptcy Court in Manhattan, New York.
swissinfo with agencies
Credit Suisse first-quarter figures 2006 :
Net revenues: SFr21.779 billion
Net income: SFr2.604 billion
Net new assets: SFr31.1 billion
Enron was an energy company based in Houston, Texas, that collapsed in December 2001. Its bankruptcy was the second-largest in the US after WorldCom.
It was one of the world’s leading electricity, natural gas and communications companies, with claimed revenues of $101 billion in 2001.
Enron hit the headlines when it was revealed that it was kept going by institutionalised, systematic and well-planned accounting fraud.
Fortune magazine named Enron “America’s Most Innovative Company” six years running.
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