Andersen Hires Financial Advisor
Accounting firm Andersen said Wednesday it hired investment bank Gleacher Partners as its financial advisor to help it weigh options that could include selling off practices or filing for bankruptcy protection.
Andersen is looking to sell its U.S. tax and consulting units to focus on its auditing business, in line with the restructuring recommended by former Federal Reserve Chairman Paul A. Volcker, head of a seven-member board that has taken control of the company.
Gleacher, a boutique investment bank focused on corporate restructuring, will help Andersen remodel its operations under the Volcker plan, the company said.
Andersen has been indicted for its role as auditor of Houston energy trader Enron Corp., which filed for bankruptcy protection in December. Clients have abandoned the Chicago company in droves, and many experts expect a bankruptcy filing unless Andersen can soon settle criminal obstruction-of-justice charges with the Justice Department over its shredding of Enron-related documents.
Talks with KPMG on a global merger fell apart this week, prompting several of Andersen’s non-U.S. units to merge with rivals. Its Singapore arm agreed to link up with Ernst & Young on Wednesday, a day after its Spain unit signed on with Deloitte & Touche.
Rep. W.J. “Billy” Tauzin (R-La.), chairman of one of the key congressional committees investigating Enron, said Wednesday that he is considering legislation that would impose tighter quality standards on accounting firms.
Earlier this week, Tauzin’s House Energy and Commerce Committee released documents showing that one of Andersen’s internal quality review auditors had objected to some of Enron’s accounting methods, but was overruled by other Andersen auditors working on the Enron account.
Tauzin said he is considering whether Congress should give the Financial Accounting Standards Board more power to enforce the rules it sets, or require that decisions made by internal quality review boards of accounting firms not be overruled by other auditors.
“One option is to make certain that the decisions of the [internal] boards are mandatory,” Tauzin said. “We’re looking at a possible separate piece of legislation on accounting standards and practices.”
The Louisiana congressman said his committee would postpone hearings into Andersen’s role in the Enron collapse in light of the Justice Department’s indictment. But he is investigating Enron’s own shredding of documents and other potential wrong-doing.
Tauzin made the comments during a trip to California this week to meet with Hollywood studio executives and Silicon Valley leaders to discuss digital technology, content protection and copyright issues.
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Reuters was used in compiling this report.
