Barclays Settles With Enron

by Glen Shapiro, LawAndTax-News.com, New York

06 November 2006

Barclays announced on Friday that it has reached an agreement to settle the litigation arising from Enron's bankruptcy estate in the US Bankruptcy Court for the Southern District of New York.

Under the terms of the settlement, which follows similar settlements between Enron and many of its creditors after the company declared bankruptcy, Barclays will make a payment of $144 million in cash to Enron to settle all claims asserted against it by Enron in the litigation and Enron will allow Barclays claims filed in the bankruptcy totalling $310 million.

In a statement, the banking group explained that:

"Barclays has agreed to a negotiated settlement of the claims in this matter because this is preferable to the time, expense and unpredictability of litigation. Barclays believes that it is in the best interests of shareholders that the litigation is resolved."

"The resolution reflects Barclays lesser role relative to others involved in the litigation surrounding Enron’s bankruptcy. The settlement will have no impact on Barclays earnings in 2006 as an adequate provision had already been made for the likely cost in prior periods."

In reaching the settlement, Barclays has denied any wrong-doing or liability. The settlement is subject to the approval of the United States Bankruptcy Court in the Southern District of New York and other conditions.

This action, which was brought by the Enron estate, is a separate action from the principal class action pending in the federal court in Houston, Texas, from which Barclays has been dismissed.

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