Royal Bank of Canada announced today that it has reached an agreement to settle its part of the so-called “MegaClaims lawsuit” brought by Enron Corp. against RBC and a number of other financial institutions.

The bank says the terms of the agreement reflect RBC’s minor role in the dispute.

Under the agreement, RBC will pay Enron US$25 million in cash to settle the claims that have been asserted against the bank and certain members of the RBC Financial Group.


In a separate deal, RBC is paying $24 million so that its bankruptcy claims against Enron will no longer be subordinated. This essentially means that RBC can move to the head of the pack and try to recover $114 million the bank says it is owed by the company.

The agreement resolves all claims between RBC and Enron related to Enron’s bankruptcy case. RBC did not admit any wrongdoing or liability in connection with the agreement.

Other financial institutions involved in the MegaClaims litigation include Barclays PLC; Canadian Imperial Bank of Commerce; Citigroup Inc; Credit Suisse First Boston, Inc.; Deutsche Bank AG; J.P. Morgan Chase & Co.; Merrill Lynch & Co., Inc.; Royal Bank of Scotland; and The Toronto-Dominion Bank.

“We are pleased with this resolution and the opportunity to put this matter behind us on favorable terms,” said Charles Winograd, president and chief executive officer of RBC Capital Markets, in a release.

The agreement is subject to execution of definitive settlement documentation and approval by the United States Bankruptcy Court for the Southern District of New York.

RBC says it plans to continue to vigorously defend the remaining Enron-related cases against it.