Arthur Andersen, the once-venerable accounting firm indicted, convicted and destroyed after the collapse of Enron, has reached an agreement to pay $65 million to resolve a class-action lawsuit filed against it by investors in WorldCom in the wake of an $11 billion accounting scandal.
The terms of the settlement, which requires court approval, are to be reviewed at a hearing on Tuesday before Denise L. Cote, the federal judge overseeing the WorldCom securities litigation. Under the terms, in addition to the cash payment Andersen would pay claimants 20 percent of any amount paid by the firm to distribute its remaining capital to its present and former partners.
The settlement would also essentially guarantee that if Andersen pays out a larger amount to settle another lawsuit, the firm must pay the difference to members of the WorldCom class.
The settlement comes five weeks into trial proceedings and would resolve Andersen’s potential liability for its work as auditor of WorldCom.
Andersen was the last remaining defendant in the case; other corporate defendants had already settled. J.P. Morgan Chase agreed to pay $2 billion last month and Citigroup agreed on $2.65 billion last year, for example, to resolve WorldCom investors’ claims against them.
