Trying to nail down a commitment that will cover liabilities stemming from its involvement in Enron's financial woes, Andersen has proffered a new settlement amount. The Big Five firm is offering $750 million to cover all Enron-related lawsuits including a federal class action suit filed by investors, a lawsuit on behalf of Enron 401(k) retirees, and any enforcement action stemming from the Securities and Exchange Commission (SEC). The firm is also hoping to persuade the Justice Department not to indict the firm.
Andersen representatives met with the SEC on Wednesday to discuss possible settlement terms. The meeting followed a Tuesday meeting between Andersen and class-action attorneys.
Under the terms of the proposed settlement, Andersen would pay $250 million from a Bermuda insurance provider, Professional Services Insurance, which is co-owned by Andersen and its global affiliates. The remaining $500 million would be paid out in $100 million increments over the next five years.
According to a report in The Washington Post, Andersen is anxious to reach a settlement on legal ramifications of the Enron collapse before its publicly held clients begin their annual spring balloting of shareholders regarding their choice of independent auditors.
Lawyers are suggesting that more time is needed to unravel the liabilities associated with the Enron collapse. Andersen has stated that the $750 million is the most the firm can afford to pay.