- The Washington Times - Tuesday, August 16, 2005

NEW YORK (AP) — Two banks agreed yesterday to pay at least $420 million to settle their parts of the “Megaclaims” lawsuit filed by Enron against 10 banks, charging they “aided and abetted fraud” and could have prevented the energy trader’s collapse.

JPMorgan Chase & Co. agreed to pay $350 million in cash to Enron Corp., and Toronto-Dominion Bank agreed to pay $70 million. The companies also will forgo certain claims in Enron’s bankruptcy proceedings while agreeing to pay more money to Enron for the ability to pursue others.

Enron, which filed for bankruptcy in 2001, is liquidating its remaining operations and restructuring its business units for distribution to its creditors. The money from yesterday’s settlements also will go to creditors.

Enron said the bankruptcy claims that are part of the JPMorgan settlement have a value of $660 million, and that the settlement with JPMorgan could reach up to $1 billion. Toronto-Dominion Bank agreed to forgo claims valued at almost $56 million, while paying $60 million to allow claims valued at $320 million that the company transferred to third parties.

New York-based bank JPMorgan said it does not expect its settlement, which is subject to the approval of the bankruptcy court, to have a “material adverse impact” on earnings.

“With today’s agreement, we have put behind us another significant piece of our Enron exposure,” said William B. Harrison Jr., JPMorgan’s chairman and chief executive.

JPMorgan agreed in June to pay $2.2 billion to Enron shareholders to settle its part of a class-action lawsuit.

Earlier this month, Canadian Imperial Bank of Commerce agreed to pay $250 million in the Megaclaims suit, while agreeing to a $2.4 billion settlement — the largest so far — in the class-action lawsuit.

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