This complicated case involves insurance JP Morgan took out to cover certain of its exposure to Enron. When Enron filed for bankruptcy, the bank claimed on its policy, but the insurers refused to pay up on the basis that the policy did not actually cover the bank for the liabilities for which it claimed. After the parties were unable to agree, legal action commenced and the case is due to go to trial in December.
The stakes were upped recently when one of the insurers, Chubb, claimed that JP Morgan knew that Enron was misleading investors. The bank has now hit back and said that that the insurers underwrote the policy in the knowledge that they might be able to escape liability in the event of any claim.
This messy business is doing nothing to restore investor confidence in the integrity of the markets. A public spat of this nature is in no-one's interest. Only time will tell, but even the winner may find this victory hollow.
JP Morgan Chase Hits Back
The FT reports that JP Morgan Chase has hit back at the group of insurers that is refusing to pay up almost $1bn in a claim made by the bank which relates to failed energy giant Enron.
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