British Bank Sues Over Enron DealOct 11, 2002 | AP
A bank that lost more than $80 million by investing with Enron Corp. sued a host of investment banks Friday, charging that they must have known Enron's finances were fatally flawed when the deal was made.
Abbey National Treasury Services, part of British bank Abbey National, filed suit in Manhattan federal court over its disastrous purchase of Enron-issued Marlin Water notes just months before the energy company collapsed into bankruptcy.
The lawsuit charges that the investment banks, including Credit Suisse First Boston, J.P. Morgan Chase, CIBC and Bank of America, must have known about Enron's troubled finances but failed to tell Abbey National.
"The defendants intentionally or recklessly omitted to disclose these material facts known to them as a result of their due diligence work associated with underwriting or auditing Enron," the suit charges.
Enron defaulted on the Marlin Water notes when the company filed for bankruptcy last year.
"As a result of defendants' fraudulent misrepresentations, Abbey National lost virtually its entire investment in the Marlin II Notes," the suit says.
Representatives for J.P. Morgan Chase and CSFB said they would not comment because their companies had not yet seen the lawsuit. CIBC and Bank of America did not immediately return calls for comment.