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Enron Sues BofA Over Account Flap

October 30, 2002|From Bloomberg News

Enron Corp. on Tuesday sued Bank of America Corp., claiming the bank unlawfully took more than $123 million from its bank account as the energy company spiraled into insolvency.

Last November, days before Enron's bankruptcy filing, Bank of America "effected a series of unauthorized withdrawals from an Enron bank account which deprived Enron and its creditors of essential operating funds," the lawsuit said.

Bank of America denied Enron access to its bank accounts, refused to answer questions and failed to provide an explanation until months later, the suit says.

Enron was reeling at the time after revealing a network of off-the-books partnerships used to hide debts and inflate profit. In December, Enron filed what was then the largest Chapter 11 bankruptcy in history.

Shirley Norton, a Bank of America spokeswoman in San Francisco, said the bank has not seen the lawsuit and cannot comment on it.

In January, Charlotte, N.C.-based Bank of America fired three employees who oversaw the bank's dealings with Enron.

Enron is asking U.S. Bankruptcy Judge Arthur J. Gonzalez to order Bank of America to turn over more than $123.1 million. The Houston-based company also is seeking punitive damages, a downgrade of the bank's claims against Enron and legal costs.

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