January 9, 2009 / 7:09 PM / 10 years ago

Enron Creditors settles commercial paper dispute with Goldman

Jan 9 (Reuters) - Enron Creditors Recovery Corp, the successor to the bankrupt energy trader Enron Corp ECSPQ.PK, settled a five-year legal battle over commercial paper with Goldman Sachs & Co (GS.N) on Thursday, court filings showed.

In a bankruptcy court filing in New York, Enron said Goldman had agreed to pay about $7 million to settle the lawsuit. Enron had originally sought to recover $383 million plus interest from Goldman.

Goldman Sachs declined to comment on the matter.

In court documents, Enron said Goldman was one of several investors that had bought and later prematurely redeemed Enron commercial paper in 2001.

In the five weeks preceding Enron’s Chapter 11 filing, the company paid out more than $1 billion to fund redemption requests for the commercial paper before it matured, the court papers showed.

Enron brought the lawsuit against Goldman and other investors in 2003, seeking recovery of the funds so that the money could be shared equally by its creditors.

Enron had sought to recover as much as $870 million from the investors, according to court papers.

Once the seventh-largest U.S. company, Enron filed for Chapter 11 protection from creditors in December 2001 amid an accounting scandal in which it hid billions of dollars of debt.

It emerged from bankruptcy in November 2004 and now exists mainly to sell assets, pay debts and litigate.

The bankruptcy case is In re: Enron Creditors Recovery Corp., U.S. Bankruptcy Court, Southern District of New York. No. 01-16034. The adversary proceeding is No. 03-92677. (Reporting by Santosh Nadgir in Bangalore; Editing by Himani Sarkar)

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