A district court judge approved a $6.6 billion settlement between a trio of banks and Enron Corp. shareholders. In a civil lawsuit, the shareholders accused the banks of helping the bankrupted company hide its shaky financial footing.
The settlements include $2.4 billion from Canadian Imperial Bank of Commerce, $2.2 billion from JP Morgan Chase and $2 billion from Citigroup. Judge Melinda Harmon had already given preliminary approval to the settlement with the three banks in February, and most of the amounts were announced in the summer of 2005.
The total of settlement cash to be returned to shareholders now stands at about $7.2 billion, including settlements with Lehman Brothers and Bank of America. The shareholder plaintiffs include about 50,000 investors who owned Enron securities between September 1997 and December 2001 and estimate that they lost some $40 billion in Enron's fall.
The civil suit filed by shareholders against Enron, its banks and several former top executives is scheduled to start in October and still needs to be granted class-action status. Banks that have yet to settle include Merrill Lynch, Barclays Plc, Credit Suisse, Toronto-Dominion Bank, Royal Bank of Canada and Royal Bank of Scotland
Lead shareholder attorney William Lerach said that he's preparing new civil lawsuits against Enron insiders, auditor Arthur Andersen and seven other large banks.
Previously on WebCPA:
