The demise of Arthur Andersen, the global accountancy giant brought to its knees by the Enron scandal, edged closer yesterday after the company in effect put itself up for sale.
Any deal would certainly mark the death of a firm which last year earned revenues of more than US$9bn and employs
85,000 people. The extraordinary reversal of fortune has been caused by the role of Andersen's Houston office as auditor to Enron, the energy company which collapsed last year with debts of US$71bn.
Deloitte Touche Tohmatsu, the world's second-largest accountancy group and owner of Deloitte & Touche in the UK, is the front-runner to take control.
But any agreement would depend on protecting a buyer from the multitude of damages claims filed by creditors and shareholders left out of pocket by the collapse of Enron. Legal experts questioned whether that was achievable. "Anyone who's lost money because of Enron will be mounting claims in every conceivable direction," one commercial lawyer said.
Andersen is a collection of regional partnerships belonging to a nominal holding company. The partnerships are distinct legal entities, but their close commercial ties make them vulnerable to damages claims against the Houston office, lawyers said, since the partnerships share profits, agree not to compete with each other and co-operate to promote
Andersen as a global brand.
One senior accounting source said Andersen represented an "unquantifiable black hole" to any purchaser. "Buying Andersen would be like saying, 'We'll look after this nuclear bomb for you'," he said.
Andersen and Deloitte declined to comment, although Andersen admitted it was "considering many options to enable us to continue to successfully serve our clients and promote the career opportunities of our people".
The US Justice Department has indicated Andersen faces likely criminal charges for shredding of Enron documents.
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