New York’s top court says Chase Manhattan Bank wasn’t obligated as a trustee for Enron noteholders to make sure information in the energy giant’s reports was accurate, The Associated Press reports.
The state Court of Appeals ruled that Enron was required to forward to Chase the reports on transactions and assets that it filed with the Securities and Exchange Commission.
Enron filed for bankruptcy in December 2001 following an accounting scandal, 10 months after Chase became the trustee.
Racepoint Partners and Willow Capital-II, which later bought about $1 billion of notes, filed a breach-of-contract suit against Chase. They claimed Chase should have vetted the filings and alerted noteholders.
The appeals court disagreed. Chase is part of J.P. Morgan Chase & Co.
Thursday’s ruling dismisses the suit.
