According to the WSJ, legal documents filed last week claim that the bank knew that Enron was in trouble and needed fresh financing in order to keep making interest payments on JP Morgan loans.
The allegation will become part of the insurance companies' defense in a legal fight with the bank over who is responsible for bearing the $1bn cost of an Enron bad debt.
JP Morgan claims that the insurers should pay as they covered the transaction with them. The insurers have refused to pay on the basis that the debt was not covered by the policies and that the bank disguised the true nature of the transaction.
JP Morgan have said that 'we believe the insurance companies' allegations have no merit and are simply an attempt to get out of paying a straightforward claim.'
JP Morgan Accused Of Conspiring
The Wall Street Journal (WSJ)reports that a group of eleven insurance companies have claimed that JP Morgan conspired to make Enron look healthier than it was.
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