|  | | 2008 News and Press Releases | | |
SETTLEMENT NEWS:
Citigroup Asks Judge To Toss Enron MegaClaims Suit
Bailey Somers
Securities Law360. January 9, 2008
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EXCERPT: Though all of the other investment banks targeted in the claw-back suit filed by Enron Creditors Corp. have settled with the company, Citigroup continues to hold out, calling the suit “blame-shifting” and asking a federal judge to toss the claims. In papers filed on Tuesday in the U.S. Bankruptcy Court for the Southern District of New York, Citigroup asked the court to throw out the pending allegations against the bank, the only remaining claims in the “MegaClaims” litigation filed against the underwriters of fallen energy giant Enron. “While Enron points an accusatory finger at Citigroup and the rest of Wall Street, characterizing them as some sort of collective enabler of Enron's wrongdoing, the law does not tolerate this sort of blame-shifting,” Cititgroup's attorneys said in the motion. Citigroup claims that although Enron's creditors may try to assign blame for the scandal to the company's underwriters, true responsibility lies in the hands of the company and its former executives. “Run by felons and self-confessed fraudsters, and under the supervision of a compliant board of directors that at best chose either not to look, or to look the other way, Enron as a matter of law has only itself to blame.” the bank said. Citigroup is the only remaining defendant in the MegaClaims litigation. Though the suit originally targeted 11 of Wall Street's biggest players, 10 of the banks settled with the Enron creditors for a total of $1.76 billion. Enron's claim against Citigroup is the largest, however. The creditors hope to eliminate $5 billion in Citigroup claims and recover $3 billion in allegedly fraudulent transfers. Creditors claim that Citigroup aided Enron's officers in manipulating the company's financial reports beginning in 1997 and ending with the company's financial collapse in 2001. … Enron’s bankruptcy case is In re Enron Corp., case number 01-16045, in the U.S. Bankruptcy Court for the Southern District of New York. |
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