UBS to Pay $115 Million to Settle Enron Case
Swiss bank UBS agreed to pay Enron creditors $115 million in cash to settle a lawsuit related to equity transactions, the successor to the bankrupt energy trader said on Wednesday.
UBS also agreed to withdraw a $5.5 million claim it had against the Enron estate as part of the settlement, which is subject to approval by the U.S. bankruptcy court in Manhattan.
UBS said in a separate statement it believed it had valid defenses to all of Enron's claims but it chose to settle the case to eliminate uncertainty.
Enron said the settlement resolves all bankruptcy proceedings involving UBS and leaves Bear Stearns as the sole investment bank with an Enron equity transaction case pending against it.
Bear Stearns officials could not immediately be reached for comment.
The UBS settlement comes just days after Enron settled a similar case against Credit Suisse Group .
Once the seventh-largest U.S. company, Enron filed for Chapter 11 protection from creditors in December 2001 amid an accounting scandal in which it hid billions of dollars of debt. It emerged from bankruptcy in November 2004.
UBS said in a statement it had provisioned funds for a possible settlement in the case and that the agreement would not materially impact its future results.
Enron had sued UBS in November 2003 seeking the recovery of about $418.3 million of payments it made in the year prior to its bankruptcy filing.
The Enron estate is still pursuing two other strands of litigation against various banks the company had relationships with, including Citigroup and Deutsche Bank , who have been targeted in so-called "MegaClaims" litigation that accused them and other banks of helping Enron commit fraud.
Eight of the 10 banks named in that litigation have settled.
The estate is also pursuing claims against several banks related to commercial paper they issued on Enron's behalf prior to the bankruptcy.