3 Banks to Pay Enron Investors
A federal judge gave final approval Wednesday to a $6.6-billion civil settlement by three banks accused by Enron Corp. shareholders of helping the company hide financial misdeeds that led to its collapse.
The settlements to be paid to former Enron shareholders include $2.4 billion from Canadian Imperial Bank of Commerce, $2.2 billion from JPMorgan Chase & Co. and $2 billion from Citigroup Inc.
Including earlier settlements with firms such as Lehman Bros. Holdings Inc. and Bank of America Corp., shareholders are now due to receive more than $7.2 billion of the $40 billion that plaintiffs in the cases have claimed they lost in Enron’s collapse. The University of California is the lead plaintiff in the case.
The settlements with the three banks were reached last summer, and U.S. District Judge Melinda Harmon had given preliminary approval to the settlement in February.
The civil suit filed by shareholders against Enron, its banks and several former top executives is scheduled to start in October, lead shareholder attorney William S. Lerach said.
Lerach, a San Diego-based attorney, refused to comment on the status of settlement talks with other defendants in the case. If he can’t negotiate more settlements, Lerach said an Oct. 16 trial date had been set before Harmon to hear investors’ securities-fraud claims.
The $40 billion in damages Lerach claimed is higher than the damage figures he has mentioned in the past. Remaining defendants, including Merrill Lynch & Co. and Credit Suisse First Boston, dispute that figure, Lerach said.
Harmon’s decision came as jurors in the same federal courthouse deliberated whether to convict Kenneth L. Lay, Enron’s founder and former chairman, and Jeffrey K. Skilling, its former chief executive, of fraud and conspiracy charges in connection with the energy trader’s demise.
Lay, 64, and Skilling, 52, each face at least 25 years in prison if convicted on charges that they used off-the-books partnerships to manipulate Enron’s finances. The government contends that they pumped up Enron stock so they could sell their own shares at inflated prices.
The jury of eight women and four men, who have given no clue toward their progress, sent U.S. District Judge Sim Lake a note shortly before lunch asking for lists of trial exhibits and transcripts of trial testimony.
Lake told the lawyers in the case that he would try to comply but first had to ask the panel -- which heard from more than 50 witnesses, including Skilling and Lay, during the trial -- to be more precise in their request.
Lake will render a verdict in a separate bench trial of Lay that concluded Tuesday in which Lay is charged with illegally using money from $75 million in personal bank loans to buy stock.
