US banking giant JP Morgan Chase (JPMC) has reached an agreement in principle to settle proceedings brought by Enron that will see the bank pay $350 million to Enron and will give up certain contested claims it has filed in the bankruptcy. The settlement with JPMC could reach $1 billion.
Enron will allow JPMC’s other claims in the bankruptcy and will dismiss or release all claims it has against JPMC. The bank also has the option of increasing its cash payment in exchange for retaining more of its claims and having them allowed in the bankruptcy.
The news follows an earlier settlement brought on behalf of Enron security holders under the terms of which JPMC will make a payment of $2.2 billion to the settlement class. The deal did not include any admission of wrongdoing by the bank.
In related news, Toronto Dominion Financial Group has also agreed to pay Enron $130 million to resolve a portion of its claims with the fallen energy trader.
The settlements are part of a suit Enron filed against 10 banks, alleging they played a role in aiding and abetting fraud.