ANDERSEN AGREES TO SETTLEMENT

A new chapter was unveiled in the Arthur Andersen battle with investors earlier this month as the company said it would agree to pay $217 million to compensate those investors in an alleged fraudulent Arizona charity. Andersen had certified the charity’s financial reports, despite the fact former employees of the charity were reporting a fraud was involved. Just over $11 million was paid recently by the firm, and Andersen has said it would agree to a schedule where it will pay $10 million a month through October, at which time the balance is due. The company also reported it would give up its license to do business in Arizona if it fails to meet the requirements of the agreement worked out. The settlement stems from the case of the Arizona Baptist Foundation, whose bankruptcy liquidation trustee sued Andersen following the collapse of the foundation. Cases against a number of people have already been undertaken, with three people pleading guilty to criminal fraud charges, and several other individuals being indicted. A prior $217 million settlement reached back in March collapsed when an insurance company under the control of Andersen along with its international affiliates said it would not pay any money related to the case. Andersen lawyers claim the insurance company would be recapitalized and able to pay by early next month. If the insurer fails to make the payment, plans have been set up to see the payment is made. At the time of its closure through the Arizona attorney general’s office, the foundation was said to owe $570 million to investors, with assets estimated around $220 million.

Topics Arizona