Andersen won146;t dissolve after audit practice ends

The end of the month does not mean the end of Andersen, the ruined accounting firm said on Tuesday in court papers that contradict a widely ...

The end of the month does not mean the end of Andersen, the ruined accounting firm said on Tuesday in court papers that contradict a widely held assumption: that it will dissolve after winding up its public audit practice on August 31.

In a three-page motion filed in the US District Court in Houston, Andersen gave its first indication of its plans after it closes up its audit practice, the main casualty of a June 15 obstruction of Justice conviction.

8220;Andersen states that it has not adopted any plan of dissolution and does not intend to dissolve on August 31 or thereafter,8221; the motion says. The firm8217;s motion stems from a dispute with the lead plaintiffs in the class-action suit brought by Enron shareholders, in which Andersen is a major defendant.

The plaintiffs fear Andersen plans to sell off its assets and spread the proceeds among partners, making it hard for the plaintiffs to collect any damages should they win the suit.

After its criminal conviction for obstructing an investigation into client Enron Corp, Andersen said it would shut down the public audit practice8212;since the felony conviction precluded it from practicing before the US Securities and Exchange Commission. Since its role in the Enron fiasco became public, more than 750 clients have abandoned Andersen, most of its employees have left or been laid off and the bulk of its profitable units have been sold off to competitors. 8220;We8217;re an ongoing entity,8221; Andersen spokesman Patrick Dorton said, but declined to say what types of business Andersen can or would be involved in after August 31.

Less than 3,000 employees will still be on the payroll then. Undoubtedly, Andersen will be in the business of answering the battery of litigation filed against it in the WorldCom, Qwest, Global Crossing and Enron cases, among others. And the partnership still has funds greater than its current obligations, although how much is unclear. Reuters