Andersen to pay $60m in Enron-related settlements

Andersen Worldwide SC, the umbrella organisation for Andersen's global network of accounting firms, will pay $60 million (€61 million) in the first wave of settlements arising from its audit of Enron.

The global network will pay about $40 million to settle claims that have been brought by the collapsed energy trader's investors and employees, and an additional $20 million for Enron creditors.

Andersen's vast global accounting empire, which boasted 85,000 employees and more than $9 billion in revenue last year, lies in tatters.

It is in the process of shutting down after its US arm was found guilty in June of obstructing justice in the investigation of Enron's finances.

Enron employees, creditors and investors have sued Andersen for massive sums for its role in the collapse of the energy trader, whose books the accounting giant blessed.

Although Enron was audited by Andersen's US branch, Andersen Worldwide has also been named in class-action suits lodged in Houston, Texas.

An Andersen source close to the matter said an announcement on the $60 million deal had been planned for the end of the week but now may be brought forward.

A spokesman for Arthur Andersen declined to comment on the matter.

Arthur Andersen, which is due to officially end its auditing practice on Saturday, was not part of the agreement, according to the source familiar with the matter.

Andersen's slide to ruin was set in motion by its admission in January that its Houston-based partner, Mr David Duncan, who led the lucrative Enron account, destroyed documents relating to the now-bankrupt energy company.

At the time, the firm tried a host of measures, including bringing on board former Federal Reserve chief Mr Paul Volcker to restore credibility, but its efforts were in vain.

Andersen was indicted in March on a single count of obstructing justice, sending most of the firm's clients and employees scurrying.

Several overseas units soon deserted the international network of Andersen firms and individual offices in the US began striking deals to join the remaining top accounting firms - now frequently referred to as the Final Four.

Finally, in June, after a closely watched trial in Houston, Andersen was found guilty of obstructing justice, effectively sealing its demise.

Currently, the US arm does not plan to dissolve after it closes doors on its auditing practice but the worldwide network has all but fully disintegrated.

"[Andersen Worldwide\] has entered a phase of liquidation and is co-ordinating the dissolution of the network," the Andersen source said. - (Reuters)