Enron Creditors Recovery Corp., formerly known as Enron Corp., said it will receive $149 million as part of a settlement with companies who received payments on short-term debt incurred by the once-mighty energy giant.
The settlement resolves claims made by Enron to recover payments made by the company on so-called “commercial paper,” or short-term debt, shortly before its bankruptcy filing in 2001.
Companies Enron settled its lawsuit with include Lehman Commercial Paper Inc., Northern Trust Co., Allstate Life Insurance Co. and the Prudential Insurance Co. of America. Allocation of the settlement payment was not disclosed.
Enron is liquidating its remaining operations and distributing its assets to creditors. The company filed lawsuits in November 2003 to recover commercial paper payments from some 180 recipients so that the funds can be shared by creditors.
“We are pleased to have resolved our differences with the settling defendants and believe this to be a significant milestone in the recovery process and our efforts to provide maximum value to creditors,” John J. Ray III, Enron’s president and chairman, said in a statement.
The settlement remains subject to the approval of the U.S. Bankruptcy Court for the Southern District of New York.
Enron, once the United States’ seventh-largest company, entered bankruptcy proceedings in December 2001 after accounting tricks could no longer hide billions of dollars in debt.
The collapse wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.
Enron founder Kenneth Lay and former Chief Executive Jeffrey Skilling were convicted last year for their roles in the company’s collapse. Skilling is serving a sentence of more than 24 years. Lay’s convictions for conspiracy, fraud and other charges were wiped out after his death last year from heart disease.
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