X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
A group of insurers among the plaintiffs in a civil lawsuit against Enron want to stop Arthur Andersen from selling off its assets as the accounting firm fights to raise cash. U.S. District Judge Melinda Harmon of the Southern District of Texas has set a hearing for today on the request. Her ruling came hours after Andersen announced that it was ready to send some of its U.S. tax partners and professionals to a rival firm in an effort to stay alive. An Andersen source said Friday that layoffs are expected to come today, but wouldn’t say how many of the company’s 85,000 worldwide workers — including 28,000 in the United States — will be affected. Like hundreds of other Arthur Andersen workers who never touched an Enron audit, Suzanne Alexander knows nothing about shredded documents or deleted computer files. “I cherish this team, and we’re not going to be together much longer,” said Alexander, 41, who works at the accounting company’s Houston office. In court, Galveston, Texas-based American National Insurance and several other insurers asked for an injunction to stop Andersen from selling assets or transferring them to foreign subsidiaries or affiliates. The motion, filed last month, also seeks to bar Andersen from releasing partners and employees who quit the firm from noncompete agreements, which prohibit former workers from taking clients with them. “We’re one of the claimants who have lost significant dollars in securities,” said Andrew Mytelka, American National’s attorney. Andersen spokesman Patrick Dorton said the claim had no merit. Terms of Thursday’s memorandum of understanding between Andersen and rival Deloitte & Touche were not announced. But splitting off much of its tax unit — which brought in $1.27 billion in revenue last year — shows that Andersen will be much smaller if it manages to survive an indictment and other continuing fallout from the Enron scandal. Separately, The Wall Street Journal reported Friday that competitor KPMG had signed an agreement with Andersen to acquire 400 staffers and 40 partners from Andersen offices in Seattle; Portland, Ore.; Salt Lake City; Boise, Idaho; San Francisco and Los Angeles. An Andersen source familiar with the matter confirmed that a memorandum of understanding had been signed with KPMG but did not give details. Company officials declined comment. Andersen has lost more than 130 U.S. public audit clients this year — more than two-thirds since it was indicted March 14 by a federal grand jury on a charge of obstruction of justice for allegedly destroying Enron documents. The trial is set to start May 6 unless the Justice Department and Andersen reach a settlement. Justice Department prosecutors were meeting Friday with top Andersen lawyers. The exodus of clients continued Friday as at least six companies announced they had replaced Andersen as their auditor. Shirley Jensen, an Andersen human resources worker who is busier than usual these days, said the company is helping employees prepare for job searches while answering questions about health insurance and severance pay. “The reality is, people are looking for jobs. The reality is, people are in dire straits,” said Amy Collier, 26, one of Schwab’s marketing colleagues. “But at least there are programs in place to help us.” Copyright 2002 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 3 articles* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.