Andersen have now been subpoenaed to provide documentation to prove that its insurer is unable to settle the claim. It appears that the insurer, Bermuda-based Professional Services Insurance Co., is actually owned by 30 Andersen firms around the world and that it could be technically insolvent. If this proves to be true, then settlement of any claims relating to Enron would appear extremely unlikely and it could all soon be over for the firm.
An Andersen spokesman confirmed that the firm acted in good faith when it negotiated the settlement with the trustees and stated that the settlement itself included a provision which made clear that it was conditional upon the insurance company approving the arrangement.
Andersen Survival Threatened
Andersen agreed to settle a claim for $217m last month in favour of trustees for the liquidators for the Baptist Foundation of Arizona. The firm had been main auditor for the bankrupt foundation. Andersen believed that their insurers would pay out and all would be sorted. They haven't and the firm is now experiencing further problems.
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