J.P. Morgan sues Enron
December 11, 2001: 7:37 p.m. ET
Bank leads other financial institutions in Enron lawsuits, seeks $2.1B
NEW YORK (CNN/Money) - J.P. Morgan Chase & Co. led other financial institutions Tuesday in a lawsuit against Enron Corp. to recover more than $2.1 billion.
J.P. Morgan claims that assets related to an investment vehicle, Sequoia, should be outside Enron's bankruptcy since they were sold before Enron's Dec. 2 bankruptcy filing.
J.P. Morgan led a bank syndicate which invested in Sequoia, which Enron borrowed from, a source familiar with the situation said.
J.P. Morgan is asking the bankruptcy court to order Enron to return $2.1 billion in accounts receivable, commercial paper and cash. Other banks involved in the syndicate are believed to be Bank of America, BNP Paribas and Fleet National Bank, press reports said.
"We are suing on behalf of bank groups of various facilities on which we are lead agent," a spokeswoman said. "We are seeking information to verify and confirm the extent of the security."
J.P. Morgan's exposure is less than $100 million, a source familiar with the situation said. As lead administrative agent, J.P. Morgan is responsible for getting money back to the syndicate, the source said.
J.P. Morgan, which filed the lawsuit in U.S. Bankruptcy Court for the Southern District of New York, advised Enron in its failed merger with Dynegy Inc.
Enron could not be reached for comment.
Enron Corp. recently filed the biggest bankruptcy in United States history. Houston-based Enron (ENE: down $0.09 to $0.72, Research, Estimates), whose stunning collapse is being investigated by federal regulators and Congress, is declining to send any officials to a hearing Wednesday by two House panels.
"I don't think they want to, or are not prepared to answer some very pointed questions about what went wrong," said Rep. Michael Oxley, chairman of the House Financial Services Committee.
Asked whether the committee planned to issue a subpoena to Enron officials to compel an appearance, Oxley said that would not happen immediately.
--Staff and Wires
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