Three Accounting Firms Sued for Raiding Andersen's Assets
Three accounting firms are being sued for looting Andersen's assets and leaving it unable to pay retirement benefits. A class action suit seeks damages of $500 million to $1 billion to cover lost retirement payments for roughly 1,000 former partners of Arthur Andersen.
The defendants named in the suit include Deloitte & Touche, Ernst & Young, and KPMG as well as BearingPoint, formerly KPMG Consulting. They are accused of interfering with contractual relations, acquiring Andersen's assets at below fair value and conspiring to suppress that value.
Among other things, the suit cites two "war rooms" operated in Chicago by 100 Deloitte employees. One room targeted Andersen's people for possible jobs, while the other targeted Andersen's clients.
According to the Wall Street Journal, Deloitte's chief executive James Copeland defended his firm's actions, saying, "Based on all the best legal advice we could get, we did what was legally prudent."
The Journal also said Deloitte and EY both called the claims frivolous and promised to contest them "vigorously," while KPMG called the suit a "cynical and misguided attempt to lay blame where there is none." ("Andersen Ex-Partners Sue Firms That Took Business," Wall Street Journal, November 13, 2002)