Report: Andersen makes settlement offers to Enron shareholders
By Associated Press, 02/21/02
CHICAGO -- Arthur Andersen LLP has reportedly begun contacting attorneys for various Enron Corp. groups offering to settle a pending class-action lawsuit, to prevent the accounting firm from being put out of business by the scandal caused by the failed energy company.
USA Today reported Wednesday that Andersen, Enron's longtime accounting firm, has floated early settlement figures of $260 million to resolve fraud claims brought in a class-action lawsuit brought by Enron shareholders.
The Wall Street Journal reported Thursday that Andersen is offering between $700 million and $800 million in a possible settlement with shareholders, creditors and employees of Enron.
The newspapers said Andersen's attempt to negotiate a settlement began more than a week ago. The Journal said the firm contacted lawyers for some large shareholders who had sued Andersen and Enron in federal court in Houston and expressed interest in negotiating a sweeping settlement to all claims. The offer was made during a meeting Tuesday in New York with a committee representing Enron's creditors, the newspaper said, citing a person involved in the process.
"We remain confident we can work through this successfully," Andersen said in a statement released Wednesday. "Reaching out to the groups affected in this case is consistent with our commitment to address the issue raised by Enron's collapse in a straightforward and constructive manner."
In testimony before Congress in December, Andersen's chief executive said the firm had been wrong on certain Enron accounting decisions, and had destroyed documents related to the case. The lawsuits against Andersen accuse the firm of misrepresenting Enron's financial condition.
On Wednesday, Trey Davis, spokesman for the University of California Board of Regents dismissed a report Andersen had offered a settlement of $260 million.
"The university has had no substantive discussions with Andersen," he said.
The Journal said Andersen's lawyers and financial advisers hope to negotiate a deal that would include shareholders who saw their holdings dwindle in value to almost nothing; Enron unsecured creditors, who are owed billions of dollars; and current and former Enron employees who lost 401(k) plan holdings that were heavily invested in Enron stock. In addition, the newspaper said Andersen wants the settlement to encompass any potential civil claims by federal agencies such as the Securities and Exchange Commission.
However, the newspaper said lawyers assigned to lead the litigation against Andersen already have rejected the firm's early offers, noting that they amount to less than 2 percent of Enron shareholders' total losses.
