KPMG Negotiating to Curtail Civil Damages

Big Four firm KPMG, which is sweating out a possible indictment from the Department of Justice over its sale of tax shelters, is working to limit its liability from civil suits by negotiating with class-action firm Milberg Weiss Bershad & Schulman.According to The New York Times, Milberg Weiss is working with the firm to reach a "prepackaged settlement" with clients of the shelters who claim that they were hurt by purchasing the products.According to documents filed in federal district court in Hot Springs, Ark., KPMG had recently began talks with Milberg Weiss; under the reported settlement terms, KPMG would pay $195 million.A representative from Milberg Weiss told WebCPA that the firm could not comment. Currently, the firm faces a class-action suit filed by Bernstein Litowitz Berger & Grossmann, and the class includes purchasers of a KPMG shelter from January 1998 to Oct. 31, 2000.Other defendants in the class action are Presidio, an investment advisory firm started by former KPMG partners; Deutsche Bank; and Sidley Austin Brown & Wood, a law firm that issued favorable opinion letters on the shelters.