Another loose end to the Enron Corp. saga was tied last week when the bankrupt energy giant's former law firm, Vinson & Elkins, agreed to pay the company $30 million to settle claims of contributing to its collapse by signing off on questionable deals.
The firm said that it decided to settle the matter to avoid further litigation costs. As part of the settlement, which must be approved by a federal bankruptcy court judge, the firm admitted no liability and will waive claims against the Enron estate for $3.9 million in service fees.
"We are pleased with this settlement, and remain focused on continuing to resolve remaining claims with major financial institutions directly involved in Enron's collapse," Enron president and chairman John J. Ray III said, in a statement.
Vinson & Elkins also noted that it no court every found the firm guilty of neglecting its professional responsibilities. The firm, which earned up to $40 million a year acting as Enron's major outside legal counsel, signed off on many of deals which allowed debt to be shifted off balance sheets.
Enron founder Ken Lay and former chief executive Jeffrey Skilling were found guilty on fraud, conspiracy and other charges in late May for misrepresenting the company's financial standing to investors. Enron has also reached settlements totaling about $800 million with six banks.
Previously on WebCPA:
Enron Broadband Executive Convicted (June 2, 2006)
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