August 16, 2005

Enron Corp. today announced an agreement with The Toronto Dominion Bank, Toronto Dominion (Texas) Inc., and TD Securities (USA) LLC (collectively “TD”) to settle TD’s portion of the Enron MegaClaims litigation.  According to the terms of the agreement, TD will pay Enron $70 million in cash. TD also agreed to subordinate $55.6 million in held claims and pay $60 million for the allowance of approximately $320 million in claims transferred by TD to third parties.

“We are pleased with today’s agreement with TD and encouraged by the momentum of the settlements Enron has negotiated over the past several weeks,” said Stephen Cooper, Enron’s interim CEO and chief restructuring officer. “The terms of this settlement reflect the modest role we believe TD played relative to others involved in this case. We hope to be able to continue to work with the remaining institutions in this litigation to move the process forward.”

The MegaClaims litigation generates value for the Enron estate through both cash recovery and claims reduction. Settlements announced to date provide for $735 million of cash payments and the subordination or cash in lieu of subordination of over $3 billion in claims.

“The TD agreement is the fifth settlement reached with financial institutions,” added John J. Ray III, Enron’s Board Chairman. “Today’s announcement reflects our determination to resolve the litigation and continue to deliver value to creditors as quickly as possible.”

Financial institutions still to settle include Barclays PLC; Citigroup Inc.; Credit Suisse First Boston, Inc.; Deutsche Bank AG; and Merrill Lynch & Co.  The Enron MegaClaims complaint involves claims that the banks aided and abetted breaches of fiduciary duties; aided and abetted fraud; and engaged in civil conspiracy.  The suit also includes bankruptcy-based claims relating to equitable subordination; preferential and/or fraudulent transfers; and the re-characterization of certain transactions.

The agreement, which resolves all open issues between Enron and TD, remains subject to the approval of the United States Bankruptcy Court for the Southern District of New York.

Enron is represented in this matter by Susman Godfrey LLP; Togut, Segal & Segal; and Venable LLP. 

Enron’s Internet address is www.enron.com.