Search the Internet          Tips  Sites: Finance, Investment

Andersen reaches Enron deal, US office excluded

Peter Graff in London

Andersen Worldwide, the umbrella of the fallen accountancy giant's international offices, confirmed on Friday it would pay nearly $60 million to creditors, employees and shareholders of bankrupt energy trader Enron Corp.

The US partnership Arthur Andersen LLP was not part of the two settlements, which would effectively shield the other global offices from litigation connected to Enron's collapse, Andersen Worldwide said in statements issued in London.

"By reaching settlements with the plaintiffs, Andersen Worldwide and its present and former member firms are not admitting any fault or that they would be proper defendants in litigation brought by Enron," the Geneva-based umbrella office of the accountancy firm said.

Andersen's Houston office was Enron's auditor when the energy trader imploded because of dodgy accounting.

The US-based partnership of Andersen was found guilty of obstructing justice in an Enron-related case, which effectively destroyed one of the accounting profession's "Big Five" firms.

The settlements are a step forward in Andersen Worldwide's efforts to wipe its slate clean of outstanding legal entanglements as it disbands its web of member firms, most of which have defected to rivals in recent months.

One settlement obliges Andersen to pay $19.95 million to a settlement fund for the Enron bankruptcy estate, which would mainly benefit the firm's creditors.

The other obliges it to pay $40 million to Enron shareholders and employees, who have sued charging Andersen's audits wiped out their investments and savings.

"Upon court approval of the settlement, the plaintiffs will release Andersen Worldwide SC and all of its present and former member firms and their partners and employees, with the exception of the entity Arthur Andersen LLP and its partners, from any and all present and future claims relating to Enron," Andersen said.

Sources had disclosed the terms of the settlements earlier this week, but Friday's announcement was the first confirmation from Andersen.

On Tuesday, the University of California, lead plaintiff in the shareholders' class action lawsuit, confirmed the $40 million deal with Andersen Worldwide.

It said it intended to seek further damages from other defendants "most of whom had far deeper involvement in the Enron debacle than the overseas Andersen firms."

ALSO READ:
The Enron Saga
More Money Headlines