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Enron; 7 Billion!!!!
That's right, my sweeties, 7 Billion~ here's an example of leadership and it's ego foolishness...."Austin Powersish"~ 7 Million? NOoooo 7 Billion it's the 2000's! 99% of us folks can't even wrap our head around 7 Billion~ Thank you Jeff Skilling!
Date: 8/4/2005 6:44:31 AM ( 19 y ) ... viewed 1656 times Enron Settlements Hit Record $7 Billion
With the Canadian Imperial Bank of Commerce's $2.4 billion settlement, the energy giant pulls ahead of WorldCom. Also, Credit Suisse bulks up Enron litigation reserves.
Stephen Taub, CFO.com
August 04, 2005
Canadian Imperial Bank of Commerce's agreement late yesterday to pay $2.4 billion to settle a securities fraud class-action suit stemming from Enron Corp.'s bankruptcy brought the total amount recovered in litigation involving the company to $7.12 billion, according to William Lerach of Lerach Coughlin Stoia Geller Rudman & Robbins LLP, counsel for the University of California's Board of Regents, the lead plaintiff.
The amount tops the $6.1 billion awarded to WorldCom investors, making the Enron settlements the largest sum ever recovered in a group of securities class-action lawsuits.
The CIBC pact is the largest settlement in the Enron litigation. Officials at the University of California alleged that CIBC participated in an elaborate scheme to defraud investors by helping Enron to inflate earnings, according to press reports.
CIBC management noted that the settlement does not include any admission of wrongdoing, and that the company agreed to it solely to eliminate the uncertainties, burden, and expense of further protracted litigation. "By settling this case and maintaining what we believe are adequate reserves for our remaining Enron related legal issues, we can better focus our energies on our other priorities," said Gerry McCaughey, president and chief executive officer.
Through its Enron-related suits, the University of California has also recovered $2.2 billion from JPMorganChase, $2 billion from Citigroup, $222.5 million from Lehman Brothers, $69 million from Bank of America, $168 million from Enron's outside directors, and $32 million from Andersen Worldwide. The university will also secure a distribution of about $32 million for investors through the bankruptcy proceeding for the LJM2 partnership that was used as part of the Enron scheme to hide losses and inflate earnings.
"This settlement demonstrates that the University's strategy of aggressively pursuing the defendants is working," said Lerach. "We continue to pursue other defendants, including other banks that have been charged with knowingly participating in the scheme to defraud Enron investors."
The settlement has been approved by the CIBC board of directors and is subject to approval by the UC Regents and the court.
The remaining defendants in the investors' lawsuit include Merrill Lynch, Credit Suisse First Boston, Barclays Bank, Deutsche Bank, Toronto-Dominion Bank, Royal Bank of Canada, and the Royal Bank of Scotland.
The banks are accused of setting up false investments in secretly controlled Enron partnerships, using offshore companies to disguise loans, and facilitating phony sales of phantom Enron assets. As a result, Enron executives were able to deceive investors by reporting increased cash flow from operations and by moving billions of dollars of debt off Enron's balance sheet, thereby artificially inflating securities prices, according to Lerach.
Meanwhile, earlier this morning, Credit Suisse Group surprised investors and other observers when its management announced that its subsidiary, CSFB, more than doubled its litigation reserves to $1.1 billion, mainly to prepare for potential lawsuits related to Enron's collapse, according to a Bloomberg report.
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