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Saturday, April 06, 2002

Enron plaintiffs try to stop Andersen sales




By Kristen Hays
The Associated Press

        HOUSTON — Plaintiffs in a civil lawsuit over Enron Corp.'s collapse want a federal judge to bar Arthur Andersen LLP's efforts to sell assets, as the once venerable accounting firm fights to raise cash.

        An order late Thursday by U.S. District Judge Melinda Harmon setting a Monday hearing on the request came hours after Andersen announced a tentative plan for a significant number of its U.S. tax partners and professionals to join rival Deloitte & Touche.

        If a court doesn't stop the sale, “There won't be anything left to collect from,” Andrew Mytelka, a lawyer for American National Insurance Co., said Friday.

        Galveston-based American National and several other insurers are seeking a temporary injunction to prohibit Andersen from selling assets or transferring them to foreign subsidiaries or affiliates.

        The motion, filed last month, also seeks to bar Andersen from releasing partners and employees who quit the firm from noncompete agreements. Such agreements prohibit workers from taking clients with them if they join other auditing firms.

        Andersen spokesman Patrick Dorton said the claim was without merit.

        Other insurers listed on the motion are American National Investment Accounts Inc.; Standard Life and Accident Insurance Co.; Farm Family Life Insurance Co.; and National Western Life Insurance Co.

        The companies originally filed their own action, which has been consolidated with a larger securities fraud case brought by the University of California, Amalgamated Bank, several state pension funds and other large investors that lost millions of dollars from Enron's failure.

        Trey Davis, spokesman for the university, the lead plaintiff, said Friday that larger plaintiffs support American National's effort.

        “Our general position is the plaintiffs are strongly opposed to any Andersen transaction or business combination that seeks to shield its assets from liability in the Enron case,” he said.

        Andersen, the fourth-largest U.S. accounting firm based on 2001 revenue, has been indicted on federal obstruction of justice charges for destroying Enron-related documents after the Securities and Exchange Commission started examining the failed energy trader.

        Justice Department prosecutors met Friday with top Andersen lawyers, but there was no indication whether the sides were closer to a settlement. A trial is set to begin May 6.

        Terms of Thursday's tentative agreement between Deloitte and Andersen were not disclosed.

       



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