Los Angeles-Long Beach, CA (1888PressRelease)
July 14, 2007 - As a settlement of a bankruptcy lawsuit, the Swiss bank for investments UBS AG will be paying creditors of the energy trader firm with $115 million. The lawsuit demands the return of almost four times of $115 million paid which the creditors in the stock trades paid during the eve of Enron’s bankruptcy last year 2001.
In a statement given by Enron on June 6, the Swiss bank of UBS AG further established an agreement to dismiss a claim amounting to $5 million against the bankruptcy estate of the company.
One more Swiss bank, the Credit Suisse which is Zurich based has recently acceded to the same settlement with payments amounting to $61.5 million. Enron announced this deal with the Credit Suisse last June 1.
The initiation of several adversary lawsuits are consequences of the energy trader corporation’s bankruptcy, wherein the company allegedly claimed that many investment banks conspired with some insiders of Enron to hide huge debts by going through varied mysterious financial deals. The company is now seeking to recoup billions worth of dollars from the alleged investment banks.
The adversary lawsuit of Enron filed against the UBS bank is concerned with some contracts paid by the firm to the bank starting February to October of 2001. The lawsuit further alleged that a large percent of the money was used to buy back shares by the millions from the common stock of Enron, which was almost worthless already.
Presently, a third suit is proceeding against Bear Stearns, a New York-based investment bank from the firm’s stock deals before its bankruptcy.
Court documents turned up with records of payments by Enron totaling to around $700 million, to the three investment banks.
The settlements are all subject to the approval of the U.S. Court handling Bankruptcy through Judge Arthur J. Gonzalez of the New York’s Southern District. Judge Gonzalez was also responsible for the series of court decisions issuing refusal to dismiss the lawsuits last 2005.
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