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SETTLEMENT NEWS:
TD Settles Claims From Enron Collapse
Staff Writer
Guelph Mercury (Ontario, Canada). August 17, 2005
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EXCERPT: Despite disavowing any wrongdoing in the Enron affair, TD Bank has agreed to pay $130 million US to settle some of the legal fallout surrounding the U.S. energy giant's collapse. "In making this settlement, we denied any wrongdoing or liability," CEO Ed Clark said in a conference call after the announcement yesterday. "We have agreed to a negotiated settlement because we thought it was preferable to the time, expense and unpredictability of litigation." Under the settlement, TD Bank will make a pre-tax payment of $50 million US in cash to Enron Corp. to resolve alleged common-law claims related to the "megaclaims" lawsuit filed by Enron in relation to its bankruptcy. Toronto-based TD also said it will add $300 million US to its reserve for a securities class-action lawsuit pending in Texas, resulting in an after-tax charge of $238 million Cdn, to be recorded in the third quarter. In the U.S., JPMorgan Chase & Co. announced Tuesday it will pay $350 million US to settle its part of the megaclaims suit. JPMorgan agreed in June to pay $2.2 billion US to Enron shareholders to settle its part of the class-action suit. Earlier this month, Canadian Imperial Bank of Commerce agreed to pay $250 million US in the megaclaims suit, while also agreeing to a $2.4-billion-US settlement -- the largest so far -- in the class action. And in late July, Royal Bank of Canada agreed to pay $25 million in a megaclaims settlement, plus $24 million so its bankruptcy claims against Enron would no longer be subordinated. Enron has sued 10 banks, alleging they "aided and abetted fraud" and could have prevented the company's collapse. The former energy trader, which filed for bankruptcy in 2001, is liquidating its operations and restructuring its business units for distribution to its creditors. Money from Tuesday's settlements will also go to creditors. New York-based JPMorgan said it does not expect its settlement, which is still subject to approval by the bankruptcy court, to have a "material adverse impact" on earnings. "With today's agreement, we have put behind us another significant piece of our Enron exposure," said William Harrison, JPMorgan's chairman and CEO, in a prepared statement. |
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