Asbestos Litigation

A common joke among moviegoers in the 1920s was to insist that “asbestos”–the word printed in large letters on the theaters’ fireproof curtains–was Latin for “welcome.”For many companies today, however, asbestos just means curtains.That’s no joke. Asbestos litigation has driven more than 50 U.S. ...

By Tim Reason • May 1, 2002

Crime and Punishment

Arthur Andersen LLP’s punishment will hardly matter if it is found guilty in its obstruction of justice trial, scheduled to begin this month. A guilty verdict would deny Andersen, already hemorrhaging clients, the right to audit public companies, easily the final nail in its coffin.But experts sa...

By Tim Reason • May 1, 2002

Incredible Shrinking Assets

If ever there was a company that didn’t have its numbers tied down, it’s Enron.In October, the company was forced to restate revenues by more than $600 million. That unexpected rejiggering eventually forced the once-powerful energy trader into Chapter 11. Now, in the middle of a massive restructu...

By Stephen Taub • April 23, 2002

Bad Boy Scouts: Companies Unprepared for Big Hits

Is your company prepared for a disruption to its major source of earnings? If not, you’re not alone.More than 50 percent of finance executives say their companies are not well prepared for an interruption to their businesses. And around 25 percent concede their contingency plans are not adequate....

By Stephen Taub • April 22, 2002

Companies Not Prepared for Interruptions, Say CFOs

Is your company prepared for a disruption to its major source of earnings? If not, you’re not alone.More than 50 percent of finance executives say their companies are not well prepared for an interruption to their businesses. And around 25 percent concede their contingency plans are not adequate....

By Stephen Taub • April 22, 2002

Reversal Of Fortune: Terror Risk Comes Home

More than seven months after the September attacks on U.S. soil, finance executives still fear domestic terrorism attacks.In fact, about two-thirds of chief financial officers in the U.S. believe their companies’ domestic assets are more of a target than their assets overseas, according to a rece...

By Stephen Taub • April 16, 2002

Going Belly-Up Going Down

About 200 companies will file for bankruptcy in 2002. Half of those will be in the manufacturing sector.At least those are some of the conclusions of a new study conducted by PricewaterhouseCoopers. According to the forecast, the bulk of public-company bankruptcies will come from the telecommunic...

By Stephen Taub • April 10, 2002

Enron Auditor Will Cooperate with Investigators, Say Reports

David Duncan, the former Arthur Andersen partner who was Enron Corp.’s lead auditor, has reportedly agreed to plead guilty to obstructing justice and will cooperate with the government’s investigation.By agreeing to the deal, Duncan will avoid more serious criminal liability, according to publish...

By Stephen Taub • April 9, 2002

KeySpan Under the Gun

KeySpan CFO Gerald Luterman and two other executives are being investigated by the Securities & Exchange Commission and the U.S. Attorney’s Office for possible illegal insider trading violations.On March 5, the SEC issued a formal order of investigation of the trading activity of a number of ...

By Stephen Taub • April 8, 2002

D&O Insurers Offer Less for More

You know the one about the guy who went to a local diner and then complained, “The food was terrible, and there was so little of it”? The same could be said of directors’ and officers’ liability insurance.“It’s a whole different animal right now,” says Wayne Salen, director of risk management for...

By Kris Frieswick • April 1, 2002

Andersen Assembling Transition Team

The Paul Volcker regime is under way at Andersen.The former Federal Reserve chairman, brought in to save the embattled auditor, named two senior Andersen partners to lead the firm’s transition. The two executives: C.E. Andrews, head of the firm’s worldwide audit practice, and Larry Rieger, anothe...

By Stephen Taub • April 1, 2002

After the Fall

Many observers complain that the financial reforms proposed so far by Congress, the Securities and Exchange Commission, and other government bodies in the wake of Enron Corp.’s collapse are a case of too little, too late. That’s clearly so for Enron’s shareholders and employees. But critics also ...

By A CFO Interview • April 1, 2002

Southern Discomfort

If a recent court case in Georgia serves as precedent elsewhere, it could lower the bar on seeking damages based on what company insiders are expected to know and, as a result, pull more third-party auditors into lawsuits.In January, the Georgia Court of Appeals reinstated a $44 million verdict a...

By Marie Leone • April 1, 2002

New Reality: Less for More

You know the one about the guy who went to a local diner and then complained, “The food was terrible, and there was so little of it”? The same could be said of directors’ and officers’ liability insurance.“It’s a whole different animal right now,” says Wayne Salen, director of risk management for...

By Kris Frieswick • April 1, 2002

Say It Ain’t So, Joe: Berardino Out at AA

You knew somebody at Andersen would fall on their sword.Turns out, it was CEO Joe Berardino. Late Tuesday, he resigned as managing partner and chief executive at Andersen Worldwide. Berardino had served a little more than a year on the job at the global professional services company.Berardino, 52...

By Stephen Taub • March 27, 2002

Volcker to the Rescue?

You’ve got to hand it to Paul Volcker. He cuts to the chase.On Friday, the man who was brought in to revise Arthur Andersen’s audit practices did a little revising of his own. Rather than advise Andersen top management on how to reform the company, Volcker offered to kick those managers out—and t...

By Stephen Taub • March 25, 2002

Selling Andersen, Bit By Bit

It’s starting to look like a tag sale.Executives and employees at seemingly every unit at Arthur Andersen are trying desperately to save their jobs. To do that, they are forging deals with regional units of their Big Five counterparts.Here’s the score so far: on Thursday, Andersen’s affiliates in...

By Stephen Taub • March 22, 2002

Andersen Defiant

It may not be up there with Bruno Haupman, but the upcoming trial of Arthur Andersen looks like it’s going to be high drama nonetheless.On Wednesday, lawyers for the besieged Big Five firm entered a not guilty plea to a federal obstruction of justice charge. That charge stems from Andersen’s alle...

By Stephen Taub • March 21, 2002

Keep on Truckin’: DOJ Says Andersen Destroyed Tons of Evidence

Call it March Madness. It looks like the Big Five may soon become the Final Four.A federal grand jury has indicted accounting firm Andersen for obstruction of justice for shredding sensitive documents related to the bankruptcy of energy trader Enron Corp.Ironically, neither Enron nor any of its e...

By Stephen Taub • March 15, 2002

No Terror Coverage, No Dice

While economists and pundits debate whether the economy is truly coming out of recession, one thing is certain: You’d be hard pressed to find a better time for investing in new capital projects. Inventories are finally down to where demand is starting to outstrip supply. Interest rates are lower ...

By David Katz • March 13, 2002

Don’t Shred on Me: Justice Department to Charge Andersen

The Justice Department may indict Andersen as early as today for its role in shredding key documents related to the Enron Corp. investigation, according to several published reports.U.S. prosecutors are expected to bring obstruction of justice charges against Andersen to a grand jury in Texas, ac...

By Stephen Taub • March 8, 2002

Disclosure Rules

The Securities and Exchange Commission’s 2001 end-of-year meeting gave investors an unexpected bonus– and corporate finance departments additional work. The SEC ruled that starting in April, companies must include tables in their 10-K reports disclosing information about all employee stock option...

By Tim Reason • March 1, 2002

Report: AA Offering Enron Plaintiffs $750 Million

Management at Arthur Andersen is determined to put the Enron debacle behind it and move on. That is, if it can.The embattled auditor is said to have offered $750 million to cover civil lawsuits and is trying to convince the Justice Department not to indict the firm, according to Thursday’s Washin...

By Stephen Taub • Feb. 28, 2002

Grilling Skilling, Take Two

Former Enron president Jeffrey Skilling took off the kid gloves during his more than five hours of testimony before a Senate panel Tuesday.“The entire management and board of Enron have been labeled everything from hucksters to criminals,” said Skilling in his opening statement. “These untruths s...

By Stephen Taub • Feb. 27, 2002

Andersen: Staying Alive?

One by one, Andersen is seeking to settle claims in an attempt to survive the Enron disaster.The embattled auditor is currently negotiating with the bankrupt energy company to settle claims that Andersen mishandled Enron’s books, according to Saturday’s New York Times. The Times cited a voice-mai...

By Stephen Taub • Feb. 25, 2002