Citigroup agrees to settle Enron claims for $1.6 billion
26 Mar 2008
Mumbai: Citigroup Inc, the biggest US bank by assets, has agreed to pay $1.66 billion to Enron Corp creditors as the final part of a settlement, a group representing creditors said.
Citi, the group said, has also agreed to waive an estimated $4.25 billion in claims to settle a lawsuit by Enron creditors over the former energy trader's bankruptcy case.
The Houston-based `Enron Creditors Recovery Group' has been seeking as much as $20 billion from Citigroup, the sole remaining defendant in the 2003 lawsuit seeking to hold lenders liable for the roles they allegedly played in the fraud that destroyed Enron.
New York-based Citigroup, which didn't admit or deny wrongdoing, said funds for the settlement have already been set aside.
Citigroup had a $2.8 billion reserve for Enron, WorldCom Inc. and initial public offering-related litigation, according to a filing by the US Securities and Exchange Commission.
The deal must be approved by US Bankruptcy court in New York, which oversees Enron's bankruptcy.
The US district court in New York had, on 18 March, denied Citigroup's request to shift the case away from the court and hold a jury trial in federal district court.
The move paves way for the final settlement of a lawsuit Enron waged in September 2003 against 11 banks, accusing them of conspiring with former Enron officials to manipulate the energy company's finances.