A federal judge has signed off on a $72.5 million settlement between Arthur Andersen and investors who sued the former accounting giant over its role in the financial collapse of former energy giant Enron Corp.
U.S. District Judge Melinda Harmon signed the final order last week, which marks the end of Andersen’s involvement in a $40 billion class-action lawsuit brought by Enron investors. The settlement was initially reached in September, with Andersen admitting no wrongdoing on its part, and attorneys for the investors saying that the amount was the most they could expect to receive from the nearly defunct accounting firm.
Enron had been Andersen’s biggest client before declaring bankruptcy in December 2001. Andersen shut down its auditing practice and almost all of its offices after being convicted a year later for obstruction of justice -- a charge which was tossed in 2005. Andersen, which once employed 85,000, now employs about 200 lawyers and administrators who oversee litigation.
So far, the suit’s lead plaintiff, the University of California Board of Regents, has recovered more than $7.3 billion, including $2 billion or more from a trio of groups that financed Enron -- the Canadian Imperial Bank of Commerce, J.P. Morgan and Citigroup.
Two other defendants, Merrill Lynch and Credit Suisse Group, have argued that Harmon should not have certified the lawsuit as a class action. Unless a New Orleans appeals court overturns the judge’s decision, a trial is set to begin in mid-April.
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