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Lehman to settle with Enron

Enron has announced that it has agreed a settlement with investment bank Lehman Holdings over claims brought by the energy supplier.

Lehman Brothers has agreed to pay Enron $69.9 million (£39.7million) in cash to end a dispute about equity transactions. The bank has also decided to withdraw with prejudice a $173 million claim against Enron.

Enron accused Lehman of "asserting preferences, fraudulent transfers and conveyances and recovery of payments pursuant to other applicable federal and state law".

If the settlement deal is approved by the US Bankruptcy Court for the Southern District of New York, it will bring to a close a lawsuit filed by Enron in 2003. Enron claimed that a payment was made to Lehman Holdings when the company was truly insolvent.

Enron president John J Ray III said: "We are pleased with this settlement, the first we have reached in the equity transactions litigation. We look forward to successfully resolving the remaining equity transactions cases."

Former Enron bosses Kenneth Lay and Jeffery Skilling are currently standing trial in federal court over allegations that they lied about the state of the company's finances before its collapse in December 2001.