The FT reports that the law case between JP Morgan and 11 insurance companies over Enron-related insurance cover, which will determine who walks off with a $1bn plus bill, has started to become a little dirty. The insurers have now accused the investment bank of being 'right in bed with Enron' and claims that the firm structured deals to hide the failed energy giant's debts.
The investment bank is suing 11 insurance companies who have refused to pay out $1bn under an insurance policy taken out by the firm to cover Enron-related exposure. The insurers claim that the policy did not cover loans and the JP Morgan deals which are the subject of the claim are actually 'disguised loans'.
JP Morgan say that the insurers knew exactly what they were getting into and accuse them of unethical behaviour as they realised that they could always dispute the transactions in the event of any claim. A JP Morgan lawyer has said that the insurers 'were anxious to be in on these deals because the money was easy and they felt that they would never have to repay'.
Arguments continue and the trial is expected to last three weeks.