Defunct accounting firm Arthur Andersen LLP will pay $25 million to settle a lawsuit brought by investors over its role in the collapse of telecommunications company Global Crossing Ltd.
Lawyers for Andersen announced the deal Wednesday, and said that the company has denied it committed any crime and decided to settle in order to eliminate the uncertainties and expense surrounding protracted litigation. Global Crossing's 2002 bankruptcy was one of the largest in U.S. history, although the company emerged from bankruptcy protection at the end of 2003.
In March, Citigroup, one of Global Crossing's financial advisors, settled its share of the lawsuit for $75 million. The Andersen settlement will bring the total to $345 million that defendants have agreed to pay to investors.
In addition to technological problems, significant debt and questions about Global Crossing's accounting practices contributed to the company's downfall. The investors named in the lawsuit accused Global Crossing, its former officers, directors and advisors of falsifying financial filings to hide losses.
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