Texas firm Andrews Kurth is to pay out $18.5m to settle with the Enron bankruptcy estate and stave off the threat of civil litigation from the company.
The Andrews Kurth settlement mirrors that made by Vinson & Elkins in June 2006, when Enron’s chief corporate counsel settled with the bankruptcy estate to the tune of $30m.
Andrews Kurth, a full-service firm with international offices in London and Beijing, four Texas offices as well as Los Angeles, New York and Washington DC, settled after a bankruptcy examiner reported the firm may have committed malpractice.
The allegation stems from the firm’s approval of 28 transactions that involved asset transactions allegedly disguised as sales – a classification that could have allowed Enron to falsely boost its cash flow ahead of its collapse.
Andrews Kurth managing partner Howard Ayres said in a statement: “We have continuously denied wrongdoing and culpability with respect to our work for Enron. We felt, though, after the passage of five years, that it was expedient to enter into the settlement to put this matter behind us.”
The settlement is pending approval of a federal bankruptcy judge.