Enron has reached a settlement with Vinson & Elkins, its former outside law firm, according to the Associated Press.
Vinson & Elkins had been widely criticized for not blowing the whistle when it grew uneasy with some of Enron’s more controversial dealings, such as the notorious LJM partnerships. In January 2002, The Wall Street Journal wrote that according to Vinson & Elkins partner Max Hendricks III, Enron’s practice of forming special-purpose entities to keep debt off its books was “creative and aggressive,” but that “no one has reason to believe that it is inappropriate from a technical standpoint.”
The Securities and Exchange Commission is continuing to investigate the advice that Vinson & Elkins and other outside law firms gave the company, according to Business Week.
Under the settlement, the firm will reportedly pay Enron $30 million in cash and waive its claim of $3.9 million for services rendered. (Business Week observed, however, that Vinson & Elkins billed Enron a total of $162 million between 1997 and 2001.)
“We are pleased with this settlement and remain focused on continuing to resolve remaining claims with major financial institutions directly involved in Enron’s collapse,” said John J. Ray III, Enron’s chairman and president, according to the AP. The company, which filed for Chapter 11 protection in 2001, is in the midst of liquidating its remaining assets and passing on the proceeds to creditors.