Bank of America Settles for $69 Million With Enron Shareholders

Bank of America ( BAC) is the first of Enron's many bankers to reach a financial settlement with the fallen energy company's shareholders.

In a tentative settlement announced Friday, the Charlotte-based bank will pay $69 million to Enron's shareholders, who are looking to nine big Wall Street banks to pay the lion's share of the damages in the pending class-action case.

"The bank believes it is in the best interests of the company to resolve these claims and put this litigation behind it,'' the bank said in a statement.

The lead plaintiff in the Enron litigation, the University of California, issued a statement hailing the first settlement with a bank. "We are very pleased with this settlement which, given the limited potential liability of the Bank of America, represents a substantial recovery and sets a benchmark for the ratio between potential liability and recovery for the other financial institution defendants," said James E. Holst, the university's general counsel.

The federal judge presiding over the Enron litigation ordered lawyers for the shareholders and the banks to enter into mediation more than a year ago. Up until now, it had been widely believed the talks were making little progress.

But the settlement with BofA may not herald a quick deal with Enron's other financiers. That's because BofA's role in financing Enron's shady and deceptive off-balance-sheet accounting shenanigans was small compared with institutions such as Citigroup ( C), J.P. Morgan Chase ( JPM), Merrill Lynch ( MER), Canadian Imperial Bank of Commerce ( BCM) and Credit Suisse First Boston ( CSR).

Legal experts have predicted that the final price tag for all the banks in the Enron litigation may be between $5 billion and $10 billion.

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