The U.S. Court of Appeals for the Sixth Circuit has referred questions to the Pennsylvania Supreme Court in a case involving PricewaterhouseCoopers that could set a precedent for accountant liability.
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The questions from the appeals court involve the legal doctrine of "in pari delicto," Latin for "in equal fault," in which a plaintiff cannot assert a claim against a defendant if the plaintiff also bears fault. The creditor's committee effectively stands in the place of the now bankrupt healthcare provider, whose former officers originally misstated the organization's finances over a decade ago.
In one of his questions for the higher court, Circuit Judge Thomas L. Ambro asked, "Does the doctrine of in pari delicto prevent a corporation from recovering against its accountants for breach of contract, professional negligence, or aiding and abetting a breach of fiduciary duty, if those accountants conspired with officers of the corporation to misstate the corporation's finances to the corporation's ultimate detriment?"
He deferred to the higher court on the matter. "Extending in pari delicto to a breach-of-fiduciary-duty action without guidance from the Supreme Court of Pennsylvania gives us pause," he wrote.