Tuesday, August 2, 2005

Major Settlement in Enron Case

The Canadian Imperial Bank of Commerce (CIBC) reports here in a press release that it has reached an agreement "in principle to settle the Enron class action litigation entitled Newby v. Enron Corp., brought on behalf of Enron security purchasers."  The lawsuit was pending in federal court in Houston. The press release states in part:

"Under the terms of the settlement, CIBC will pay U.S. $2.4 billion to the settlement class. Plaintiffs' attorneys' fees will be paid out of the settlement. The settlement does not include any admission of wrongdoing by CIBC. CIBC stated that it agreed to the settlement solely to eliminate the uncertainties, burden and expense of further protracted litigation. The class action settlement must be approved by the Board of Regents of the University of California, the lead plaintiff in the case, before it is submitted to the United States District Court for the Southern District of Texas."

The Wall Street Journal includes a quote from an attorney in this matter noting that "$2.4 billion, [is] the largest amount to date" of any settlement reached in the Enron matter.  This amount, along with the other settlements to date, do not reach the billions of dollars lost by investors. See here.

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