NEW YORK (Bloomberg) — UBS AG will pay Enron Corp. $115 million to settle a lawsuit over claims the bank received preferential treatment as the energy trader moved toward bankruptcy in 2001, Enron said.The agreement was announced yesterday by the Enron Creditors Recovery Corp. The Houston-based company sued UBS, claiming equity transactions before the December 2001 bankruptcy filing benefited the bank at the expense of other creditors.

"UBS believes it had valid defences to all of Enron's claims but chose to settle this case to eliminate the uncertainty created by the proceeding," the Zurich-based bank said in a statement. Enron was seeking to recover $418.3 million, UBS said.

The settlement resolves the third of four such cases Enron filed in US Bankruptcy Court in New York in 2003 against UBS AG, Zurich-based Credit Suisse Group, New York-based Bear Stearns Cos. and Lehman Brothers Holdings Inc., also in New York. Lehman Brothers settled the case against it last year for $69.9 million and Credit Suisse settled June 1 for $61.5 million.

"We are pleased with this settlement, the third we have reached in Enron's equity transactions litigation," Enron chairman John J. Ray III said in the statement. "We look forward to successfully resolving the sole remaining equity transaction case, which remains pending against Bear Stearns."

UBS will also withdraw a claim of about $5 million against the Enron estate under the settlement, the bank said in a statement distributed by PRNewswire.

Enron filed the suits seeking the return of what it called "preferential and fraudulent" payments the banks received in the year before its bankruptcy filing. UBS and Credit Suisse both denied liability. Enron Credit Recovery is the entity pursuing litigation on behalf of Enron's creditors, which will receive the proceeds from the settlements.

Starting in 1996, Enron agreed to a number of "equity swap" or "equity forward" contracts requiring the company to buy its shares held by UBS at a designated date and price, or to settle the contracts for cash equal to the change in the price, the company said in the complaint.