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NEW YORK : US banking giant Citigroup said on Wednesday it had agreed to pay 1.66 billion dollars to resolve its litigation with Enron creditors dating to the collapse of the former energy trading firm in 2001.
Enron's lenders had filed a series of bankruptcy and fraud claims against Citigroup in the US Bankruptcy Court in New York totalling 21 billion dollars. The creditors had also sued 10 other banks.
Citigroup said it would pay the lenders 1.66 billion dollars in a pre-trial settlement which resolves their claims against one of America's biggest financial firms.
The banking titan said it had set aside enough money to cover the payout under the so-called "Megaclaims" litigation.
The Megaclaims litigation was filed by lawyers acting for Enron's creditors in 2003 against eleven major banks. The creditors had claimed that the banks should bear partial responsibility for the energy firm's spectacular implosion.
Enron's 2001 collapse was at the time the largest bankruptcy in US corporate history. The Houston, Texas-based firm imploded with over 40 billion dollars in debts as investigators uncovered a wide-ranging accounting scandal.
Thousands of Enron employees lost their jobs, and the scandal prompted high level probes and the prosecutions of top company executives.
"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," Citigroup said. - AFP/de
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