Citi Settles Enron Estate Litigation for $1.66 Billion
Also Resolves Litigation With Holders of Enron Credit-Linked Notes
Settlements are Fully Covered by Existing Legal Reserves
New York – Citi today announced it has reached settlement agreements resolving the two largest remaining claims against Citi arising out of the collapse of Enron in 2001. Both settlements are fully covered by Citi’s existing litigation reserves.
The Enron Bankruptcy Estate (“Enron”) had filed bankruptcy and fraud claims against Citi in the United States Bankruptcy Court in New York totaling approximately $21 billion. Under the terms of the settlement agreement, Citi will pay $1.66 billion to Enron and withdraw certain claims in the Enron bankruptcy proceeding.
Enron will release all of its claims against Citi and certain other parties. Enron will also allow specified Citi-related claims in the bankruptcy proceeding, including all of the bankruptcy claims of parties holding approximately $2.4 billion of Enron credit-linked notes (“CLNs”). Citi reached a separate settlement agreement resolving all disputes with the holders of the CLNs, including a suit against Citi pending in the Federal District Court in Houston.
The settlements provide that Citi denies any wrongdoing and has agreed to the settlements solely to eliminate the uncertainties, burden and expense of further protracted litigation. The Enron settlement agreements must be approved by the bankruptcy court.
Citi made the following statement about the settlements: “We are pleased to have reached a successful resolution of the two largest outstanding matters dating from the Enron disputes.”
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