Credit Suisse to Pay Enron Settlement of $90 Million

Credit Suisse Group, Switzerland’s second-biggest bank, agreed to pay $90 million to Enron Corp. to settle a lawsuit related to the energy company’s bankruptcy.

Under the settlement, Credit Suisse will forgo $337 million in claims that it was seeking in the bankruptcy case, Houston-based Enron said Tuesday. Claims in the case were worth from 18 cents to 20 cents on the dollar.

“We are gratified with the progress we have made to date” in the bankruptcy litigation “and remain eager to reach resolution with the remaining financial institutions,” John J. Ray III, Enron’s chairman and president, said in the statement.

Credit Suisse joins other banks, including the Royal Bank of Scotland and Lehman Bros. Holdings Inc., which have settled litigation arising out of Enron’s bankruptcy. Enron sued at least 10 different financial institutions in 2003 for allegedly aiding and abetting the accounting fraud that drove the company into bankruptcy in 2001.

The agreement announced Tuesday resolves “claims asserted by Enron against all named Credit Suisse First Boston and Donaldson Lufkin & Jenrette entities” in cases pending in U.S. Bankruptcy Court in New York, Zurich-based Credit Suisse said in a statement. Credit Suisse acquired Donaldson Lufkin & Jenrette in 2000.

Credit Suisse spokeswoman Victoria Harmon declined to comment. The bank didn’t admit wrongdoing.

Under the settlement, $92 million in additional bankruptcy claims, which Credit Suisse has sold or transferred to other companies, can still be sought from the Enron estate.

Enron said that the amount of the settlement reflects that Credit Suisse was “involved in fewer transactions with Enron than certain of the other” defendants in the case.

Banks still involved in the litigation include Citigroup Inc., the world’s largest bank by market value, Frankfurt, Germany-based Deutsche Bank, London’s Barclays, Bank of America Corp.’s Fleet Financial Bank, and Merrill Lynch & Co., Enron said in the statement.

In February, Lehman Bros. agreed to pay $69.9 million to Enron and to give up a bankruptcy claim to settle its dispute.

In the case against Lehman, Enron alleged that as much as $155 million paid to the bank in the days leading up to Enron’s bankruptcy under an “equity swap” agreement was recoverable under bankruptcy law.

In Enron’s settlement with the Royal Bank of Scotland, Britain’s second-biggest bank agreed to pay $41.8 million and forfeit some claims in the bankruptcy case. In exchange, Enron agreed to pay Royal Bank of Scotland $20 million to resolve $329 million in claims the bank filed against the energy trader.