Barclays in £76m Enron settlement
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Your support makes all the difference.Barclays has agreed to pay $144m (£76m) to settle claims that it aided the frauds which propped up Enron, the energy trading company which went spectacularly bankrupt in 2001.
The UK bank is one of a string of creditors alleged to have taken part in the complex off-balance sheet financing arrangements which hid billions of dollars of liabilities from investors.
The settlement was signed without admitting any wrongdoing, and Barclays said it was "preferable to the time, expense and unpredictability of litigation".
The deal is the latest settlement between creditors and what remains of Enron. Through a laborious process of asset sales and litigation against those alleged to have been involved in the frauds, the company has been able to repay $9.4bn to creditors.
Barclays claimed it was owed some $310m by Enron when it went under, and all but one of its claims have been allowed as part of the settlement. The bank can expect to get back between 30 and 40 cents in the dollar.
The deal will have no impact on Barclays' results, because the sums involved fall within the provisions put in place at the time of Enron's bankruptcy.
John J Ray III, Enron's chairman, said: "The Barclays agreement is the ninth settlement reached with the financial institutions. Today's announcement reflects our determination to resolve the litigation ... and reflects the lesser role played by Barclays relative to others involved in the litigation."
Financial institutions yet to settle with Enron include Deutsche Bank, which is also fighting a Texas class action lawsuit from shareholders which claims that it aided fraud at Enron.
Barclays was dismissed from that action in July.
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