Crowell & Moring Trial Team Takes Enron Case Against Citigroup to Courthouse Steps
Enron Reaches Agreement in Principle With Citigroup in MegaClaims Litigation
Citi Agrees to Pay $1.660 Billion and Waive and Release Additional Claims; $4 Billion in Claim Reserves to be Released Enron expects to distribute over $6 billion in cash in near term
March 26, 2008
Enron Creditors Recovery Corp. announced today that it has reached an agreement in principle with Citigroup to settle the MegaClaims litigation in the Enron bankruptcy case. Pursuant to the terms of the settlement, Citi will pay Enron $1.660 billion. Citi further agreed that indemnification claims (as to which the Bankruptcy Court established a $4 billion claim reserve) and an additional $249.4 million of claims against Enron asserted by Citi will be waived. Claim holders of the six Yosemite/CLN Trusts will be allowed claims in the amount of $2,413.8 million (against ENA and a guaranty claim against ENE) and $28.6 million against ENE. In addition to the cash settlement of $1.660 billion, the settlement will release an additional approximately $1.7 billion of cash held in a disputed claims reserve, which will be included in a special distribution to creditors as soon as is practicable after bankruptcy court approval of the settlement. These funds will not be part of the upcoming April 1, 2008 creditor distribution estimated at over $1 billion.
"Today's settlement marks an enormous accomplishment for the Enron Estate, as it concludes the MegaClaims litigation and allows us to return over $5 billion to creditors of the Enron Estate, including approximately $2.1 billion plus interest, gains and dividends to the Yosemite/CLN Trusts claim holders," said John Ray III, Enron Creditors Recovery Corp. President and Chairman of the Board. "I am very proud of the value we have been able to recover on behalf of creditors through the MegaClaims process; reaching an agreement with Citi enables the Estate to avoid the costs of protracted litigation, and it accelerates distribution to creditors of significant cash trapped in the Estate," Ray added.
The MegaClaims suit was filed in 2003 by Enron Creditors Recovery Corp. against eleven global banks and today's settlement brings this effort to a successful close. With today's settlement and the expected April 1 distribution, the Board of Directors of Enron Creditors Recovery Corp. is gratified that approximately $20 billion will be returned to innocent creditors and looks forward to resolving the remaining litigation and asset sales to deliver additional value to creditors.
The settlement remains subject to the execution of definitive agreements and the approval of the United States Bankruptcy Court for the Southern District of New York.
For more information on Enron Creditors Recovery Corp. please visit http://www.enron.com.
Enron Creditors Recovery Corp. is represented in this matter by Klee, Tuchin, Bogdanoff & Stern LLP and Crowell & Moring LLP.
Enron's website address is http://www.enron.com.
CAUTIONARY STATEMENT: Certain statements contained in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange act of 1934, as amended. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and other statements that are other than statements of historical facts. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include, but are not limited to, political developments affecting federal and state regulatory agencies, and developments with respect to the bankruptcy of Enron. Except as required by law, Enron does not undertake any obligation to update any forward-looking statements.
312.861.4703, for Enron Creditors Recovery Corp.
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