Tax

KPMG Shelter Deal May Be Revised

More than 20 percent of the eligible investors decided not to participate in the settlement.
Stephen TaubFebruary 9, 2006

It’s back to the negotiating table for KPMG and its tax-shelter investors.

A federal judge postponed approval of a proposed $195 million settlement so the two sides could restructure the deal, according to The New York Times. It seems that officials at KPMG want the deal revised because too many people chose to opt out of it, according to the paper.

Reportedly more than 60 of 284 eligible investors decided not to participate, which is widely regarded to be a high rejection rate. So it is likely that the accounting firm’s lawyers want to reduce the size of the settlement fund.

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The settlement, reached in September, covered four tax shelters offered by KPMG, noted the Times. Under the deal, Sidley Austin Brown and Wood, the law firm that signed off on the shelters, agreed to kick in about 20 percent of the settlement.

A spokesman for the accounting firm told the Times that “KPMG’s goal has always been a fair settlement, and we are continuing discussions towards that goal.”

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