Company: JP Morgan Chase
JP Morgan pays $1bn in Enron deal
|17th Aug 2005
|P Morgan Chase has agreed to pay about $1bn (£554m) to settle claims that it contributed to the collapse of former energy trader Enron four years ago.
The bank will pay $350m in cash and meet claims totalling another $660m.
Enron has previously asserted that 10 banks aided and abetted in its collapse, but the settlement is the first with a US bank.
Bank CEO William Harrison said the deal had "put behind us another significant piece of our Enron exposure".
As part of the deal, JP Morgan will make the cash payment to Enron's bankruptcy estate and will also give up contested claims it has filed.
JP Morgan said the settlement should not have a "material adverse impact" on its earnings.
Earlier this month Canadian Imperial Bank of Commerce agreed to pay $250m in a similar settlement.
Other agreements have been reached with firms including Royal Bank of Canada, which will pay $25m, and Royal Bank of Scotland Group, due to pay $41.8m.
Banks yet to settle the so-called Enron "megaclaims" suit include Barclays, Citigroup, Credit Suisse First Boston, Deutsche Bank, Merrill Lynch, and Toronto-Dominion Bank.
At the time Enron declared itself bankrupt in December 2001, it was the largest Chapter 11 filing in US history.
The energy trader had assets of $49.8bn and debts of $31.8bn.
Enron emerged from Chapter 11 late in 2004 as a private entity and is currently liquidating its remaining assets to pay its debts.
The New York bankruptcy judge, who must approve the latest settlement, continues to oversee those payments.