JP Morgan has reached an agreement with 11 insurance companies in a $1bn legal dispute over failed deals with US energy giant Enron.

The US bank said that under the agreement, "insurance companies will pay 60% of the amount of the surety bonds they wrote".

The companies are now expected to pay about $655m toward losses that JP Morgan incurred in failed commodity contracts.

Alan Levine, a lawyer for the insurance companies, said that the insurers were "very satisfied with the results".

JP Morgan filed suit against the 11 insurance companies after they refused to pay more than $1bn for guarantees on failed energy trades between Enron and Mahonia.

The Chase affiliate made six deals with Enron in which Enron was paid in advance for oil and gas.

The insurance companies countered that the trades were actually disguised loans.

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