Credit Suisse Securities is the latest company to settle “MegaClaim” litigation stemming from the Enron bankruptcy.
Under the settlement, the former Credit Suisse First Boston agreed to pay Enron $90 million and forgo about $337 million in claims against the Enron estate. The agreement must still be approved by a bankruptcy court.
The Enron MegaClaim complaint involves allegations that a number of banks contributed to the company’s collapse by aiding and abetting breaches of fiduciary duties; aiding and abetting fraud; and engaging in civil conspiracy. The suit also includes bankruptcy-based claims relating to equitable subordination; preferential and/or fraudulent transfers; and the re-characterization of certain transactions.
“The settlement reflects that CSFB was involved in fewer transactions with Enron than certain of the other MegaClaim defendants,” Enron stated in a press release. CSFB did not admit liability or wrongdoing, and the parties settled to avoid the costs and uncertainties of further proceedings, the former energy giant stressed.
“We are gratified with the progress we have made to date in the MegaClaim litigation,” said Enron’s current chairman and president, John J. Ray III, in a statement, “and remain eager to reach resolution with the remaining financial institutions.”
The final five MegaClaim defendants are Citigroup, Deutsche Bank, Barclays, Fleet National Bank, and Merrill Lynch.