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Arthur Andersen LLP’s insurance company Wednesday paid off the balance of a $217 million settlement with thousands of investors in the failed Baptist Foundation of Arizona. The foundation’s 1999 bankruptcy was the largest by a nonprofit agency in U.S. history, costing more than 10,000 mostly elderly investors about $570 million. Andersen was the foundation’s auditor. Assistant Attorney General Tim Nelson said the remaining balance, nearly $206 million, was deposited Wednesday. After attorney fees and expenses, investors will get back about $170 million from the settlement, foundation lawyer Sean Coffey said. Another $170 million remains in trust assets. Coffey said investors should wind up getting back about half of their money, with some arriving in the next few weeks and the biggest checks coming late this year or early next year. Andersen has not admitted any fault in the foundation’s failure. Ed Novak, an attorney for the accounting firm, confirmed the payment but declined to comment further. Forrest Bomar, a 73-year-old retiree from Palestine, Texas, and his wife, Thelma Lee, lost $236,000, their entire life savings. “This is indeed surprising and good news,” Bomar said. “I believe they must be on the verge of going under with all of the clients they lost and the trial going on with Enron. They’re in a lot of hurt. And without sounding judgmental, perhaps they should be.” The settlement resolves civil cases against Andersen related to the collapse, as well as cases brought by state regulators and prosecutors. Andersen backed out of an earlier $217 million settlement, saying its insurance company could not afford it. It agreed to nearly the same deal one week into a trial in which the foundation’s liquidation trust was seeking $150 million in compensatory damages, and more in punitive damages. Copyright 2002 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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