Lawsuit Over Derivatives Settled by Bankers Trust : Investments: Analysts say the accord helps end a PR nightmare. Firm admits no wrongdoing.

Bankers Trust New York Corp. settled a $73-million lawsuit over derivatives it sold to Gibson Greeting Inc., ridding itself of a lawsuit that cast a pall over the bank’s reputation for months.

The bank still faces a $130-million lawsuit by Procter & Gamble Co. that continues to taint the bank with claims that it sold complex derivatives without explaining the risks. Bankers Trust has denied the claims, saying the two companies fully understood the risks of the derivatives they bought.

Both sides could claim victory in the settlement. The Cincinnati greeting card company agreed to pay Bankers Trust $6.18 million to cancel two swaps it had outstanding with the bank. That covered a third of the money Bankers Trust would have been due, since it had paper losses of $20.7 million on Sept. 30 on the derivatives contracts. Derivatives are contracts whose value is linked to underlying assets such as a stock or bond.

Regardless, Bankers Trust is out far less than the $73 million in damages and losses Gibson sought. And it is eliminating half a public relations nightmare, something worth a lot more than the cost of canceling the swaps, said Raphael Soifer, banking analyst at Brown Brothers Harriman & Co.

“It lifts something of a cloud over Bankers Trust that had been there for a long time,” he said.

The settlement “was in the interest of both parties based on the unique facts of the case,” Bankers Trust said in a statement Wednesday. The bank vowed to vigorously fight the P&G; lawsuit, adding that “we . . . expect to be successful.”

Bankers Trust decided it would have had a tougher time winning the Gibson case because the company, which earned $25.9 million last year, could have been perceived by a jury as small and relatively unsophisticated, Soifer said. Procter & Gamble, which had $2.3 billion in profit in fiscal 1994, will find it harder to make the case of being duped by Bankers Trust, he said.

Since Gibson filed its lawsuit, Bankers Trust has been dogged by scrutiny of its derivatives business, which accounted for $231 million, or 45%, of profit in the first three quarters.

The Securities and Exchange Commission and the Commodity Futures Trading Commission began investigating allegations made by the two companies, and Moody’s Investors Service Inc. warned it might lower its rating on the bank’s deposits, in part because derivatives losses could scare away some clients.

Gibson said in a statement that it will record a gain of $14.5 million in the fourth quarter as a result of the settlement because it won’t have to carry the losses from the two Bankers Trust swaps.

The $6.18-million payment will, in effect, buy out Gibson’s existing contracts with Bankers Trust. That includes reimbursing Bankers Trust for $3.4 million in payments the bank made to the company on earlier derivatives transactions.