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Talks deepen for Andersen assets
Compiled from Times wires Arthur Andersen, fighting for its life under a criminal indictment, on Monday reached the outline of an agreement for rival KPMG to absorb its international operations, the Los Angeles Times reported. Andersen is expected to tell a federal judge Wednesday that it wants to waive all pretrial motions to start proceedings as soon as possible, according to lawyers for the firm. If successful, that could mean a trial on a charge of obstruction of justice for destroying Enron documents could be scheduled to begin within a matter of weeks. The parallel actions suggest that Andersen is girding to be a leaner firm focused on winning an acquittal quickly enough to retain as many U.S. clients as possible. The talks with KPMG appear to be an attempt to preempt the foreign Andersen partnerships, which were beginning to negotiate their own deals anyway, but it is still a gamble, lawyers said. If forced to seek bankruptcy protection as a result of additional client defections and a criminal conviction -- an option that the firm has vehemently rejected so far -- Andersen will not have its valuable overseas assets with which to negotiate. The final shape of its U.S. holdings remains in question, as well. The Chicago Tribune reported that Andersen is in negotiations regarding its its U.S. operations to BDO Seidman of Chicago. "We have initiated talks" with Andersen, said Scott Univer, general counsel for BDO Seidman, told the Tribune. "We are looking at a variety of areas, and we are in communication with a number of individuals." Arthur Bowman, editor of Bowman's Accounting Report, said he expects that BDO Seidman is interested in parts of Andersen, not the firm as a whole. "They may be trying to position themselves for some of the people and practices at Andersen, which is a good strategy," Bowman said. What is clear is that if Andersen survives the coming battle with the Justice Department, the firm that emerges will be very different from the powerful, worldwide partnership that just a few months ago seemed unsinkable. Without its overseas branches, it will be more difficult for Andersen to serve prized multinational clients, whose businesses stretch across national borders, accountants said. And American clients continue to defect: Monday, pharmaceutical company Wyeth announced that it would drop Andersen as its auditor and instead retain Pricewater-houseCoopers. The Securities and Exchange Commission took a step late Monday that may reassure Andersen's remaining clients, saying that it would accept financial statements audited by the accounting firm as long as Andersen provided assurances that it was complying with generally accepted auditing standards. Companies may also submit unaudited financial statements -- on time -- if they file audited statements within 60 days. Nonetheless, negotiators for Andersen and KPMG have had to act quickly to prevent the global network from splintering into dozens of pieces. Friday, a day after an indictment was unsealed charging Andersen with obstruction of justice for destroying thousands of Enron documents, partnerships in Spain and Chile said they had begun to severe ties with the worldwide practice, and those in Italy, Portugal and Switzerland said they were considering doing the same. -- Information from the New York Times was used in this report.
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From the Times Business report
From the AP
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