Citigroup settles Enron lawsuit | News | Al Jazeera

Citigroup settles Enron lawsuit

US bank settles suit to avoid expense of litigation after collapse of energy giant.

    Citigroup says it believes it has the money
    to settle the suit [EPA]


    At the time the Texas-based firm was the biggest such bankruptcy in US corporate history, leading to the prosecution and jailing of several Enron executives and several high-profile US government investigations.
     
    Andrew Fastow, Enron's former financial chief, is currently serving a six-year sentence for his part in the accounting scandal which led to the fall of Enron.
     
    The creditors had alleged that the banks should bear at least partial responsibility for the energy firm's implosion.
     
    'Megaclaims'
     
    The payout represents about 60 per cent of the $2.8bn Citigroup has set aside for legal payouts in litigation reserves.
     
    The firm had earlier said that it believes its financial reserves are sufficient to cover any settlement.
     
    Citigroup is the last of 11 banks to settle with Enron creditors in a litigation known as "Megaclaims," and its payment is by far the largest.
     
    The litigation will return more than $5bn to Enron creditors, the creditors said in a statement.

    SOURCE: Agencies


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