September 24, 2007

Enron Creditors Recovery Corp. today is pleased by the decision of the U.S. District Court, Southern District of New York to reject an appeal by Springfield Associates, thereby sending the case back to the U.S. Bankruptcy Court in New York.  Significantly, the Court expressly reaffirmed that “the general principle of assignment law – that an assignee stands in the shoes of the assignor and subject to all equities against the assignor – applies to assignments of bankruptcy claims.”  The decision clears the way for a trial in what is known as the MegaClaims case to determine whether Citibank will be held accountable for its role in the collapse and insolvency of Enron.

“The District Court has eliminated the last hurdle in moving forward with the Citibank MegaClaims trial,” John Ray III, Enron Creditors Recovery Corp. President and Chairman of the Board said.  “Enron Creditor Recovery Corp. has dedicated the necessary resources to ensure the public trial brings the causes of the Enron collapse to light so that money can be returned to the hands of innocent parties.”

The MegaClaims suit brought by Enron Creditors Recovery Corp. against ten U.S. banks alleges their significant involvement in the fraudulent accounting activities that led to the energy trader's collapse.  Thus far, eight of the ten banks named in the suit have settled their claims, contributing to Enron Creditors Recovery Corp.’s return of more than $11 billion to creditors.  Enron Creditors Recovery Corp.’s outstanding claim against Citi seeks billions more for those who suffered financial losses as a result of the bankruptcy.