JP Morgan Chase wins case against West LB in Enron-related case

By Jeff Pines

Washington, Aug. 3 - JP Morgan Chase said it won an Enron Corp.-related lawsuit after a six-week trial in England.

In late 2001, Enron's Mahonia, a special purpose company, sued West LB AG to collect on a $165 million letter of credit that West LB had issued to back an Enron prepaid swap contract.

West LB had refused to honor the letter of credit on the ground, among others, that the prepay contract was part of a "fraudulent scheme" to which JPMorgan Chase was a party. West LB counterclaimed against JPMorgan Chase, which had a security interest in the letter of credit and had arranged the transaction.

The court rejected all of West LB's allegations and ordered it to pay $165 million plus interest and costs.

Houston-based Enron filed for bankruptcy on Dec. 2, 2001. Its Chapter 11 case number is 01-16034.

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