Vinson forks out $30m in Enron escape plan

Vinson & Elkins has settled to the tune of $30m (£16.09m) with Enron’s bankruptcy estate in a deal that staves off the threat of civil litigation from the company.

The Texas-based firm has also written off around $4m (£2.15m) in fees that it was owed by Enron, while the US media reported the settlement payment included $10.5m (£5.63m) in returned legal fees that Enron paid to Vinson in the three months prior to the bankruptcy
The settlement still requires approval from the US bankruptcy court, but it is understood that the firm was keen to avoid a lengthy lawsuit with Enron over its role in the company’s spectacular 2001 collapse.

Vinson remains a defendant in a separate shareholders’ suit seeking billions of dollars from the law firm and other financial institutions and advisers connected to Enron.

The settlement comes less than a fortnight after former Enron chief executives Ken Lay and Jeffrey Skilling were found guilty of fraud. The pair will be sentenced on 11 September.

Enron chairman and president John Ray said: “We’re pleased with this settlement and remain focused on continuing to resolve remaining claims with major financial institutions directly involved in Enron’s collapse.” Vinson partner Max Hendrick took the stand during the criminal trial, testifying about the probe that the company conducted in 2001 into allegations made by former Enron executive Sherron Watkins.

Vinson partner Harry Reasoner said: “Under the terms of the settlement, Vinson & Elkins does not admit any fault or liability. Vinson met its professional obligations in its representation of Enron and we could have demonstrated that at trial. Vinson & Elkins decided to settle the matter in order to avoid the burdens of protracted litigation.”