Wadia Resigns over Andersen Divorce

Arthur Andersen chief Jim Wadia has sensationally resigned after the arbitrator's ruling on the accountancy giant's divorce from Andersen Consulting.

The International Chamber of Commerce ruling gave Arthur Andersen back its name, but found that the two firms' umbrella group Andersen Worldwide was in breach of its obligations under the original operating agreement.

Wadia said in a statement that he has decided to take early retirement from the firm after welcoming the court's decision. "We are pleased that the arbitration has upheld our position and we are now prepared to move ahead with our own business plans," he said. "This action has not distracted us from our ultimate focus – our people and our clients."

Wadia said on his early retirement: "It has been three years since I stepped into this role – time that has been spent helping our organization focus on being a leading service provider in the new economy. I am very proud of the progress we have made with our new strategy; we are at a point following this decision to head forward into another period of exceptional growth and development."

Louis P Salvatore, chairman of the Arthur Andersen Oversight Committee of the Andersen Worldwide board of partners, will replace him until a new managing partner is found. A new appointment is expected within the next 90 days.

Salvatore said: "Our focus on helping clients navigate the new economy, find sources of value in their organization and manage risks is unwavering. There will be absolutely no interruption of client service during the transition period.

"The separation from Andersen Consulting does not have any impact on our firm’s ability to continue to provide clients with the highest quality professional services nor does it impact our ability to afford excellent growth opportunities to our people," he added.

The firm said that it welcomed the ruling as:

  • Arthur Andersen did not breach its obligations to Andersen Consulting;
  • Andersen Consulting is not entitled to its monetary claims of damages against Arthur Andersen;

  • The Andersen name and any derivatives cannot be used by Andersen Consulting going forward;
  • The jointly developed technology cannot be used by Andersen Consulting;
  • The transfer payment funds held in escrow totaling almost $1 billion must be returned to Andersen Worldwide for distribution to Arthur Andersen member firms.
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