What happens if Arthur Andersen is sold?

Discussion in 'Archived Threads 2001-2004' started by Brian Perry, Mar 12, 2002.

  1. Brian Perry

    Brian Perry Cinematographer

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    It appears more and more likely that Andersen is not going to survive the Enron debacle. Besides facing bankruptcy, they are exploring the sale of the firm to one of the other Big Five (soon to be Big Four) accounting firms, such as Deloitte & Touche. If this happens, are all the people suing AA out of luck? In other words, can D&T purchase all of the assets and wash its hands of any of AA's legal liability?
     
  2. Michael Reuben

    Michael Reuben Studio Mogul

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  3. Jason Handy

    Jason Handy Second Unit

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    Don't analysts do a value analysis when considering a purchase? Assets to liabilities? I am sure some smart weenie has come up with a way to estimate a worst-case scenario for litigation. Personally, I would basically take the 100 million (or 1 billion, whatever that amount was) in overvalue, and apply it directly to the liabilities, assuming the litigation forces the money to be paid back.

    But I am just a simple engineer, with no knowledge of the business world!

    Jason
     
  4. Michael Reuben

    Michael Reuben Studio Mogul

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    Sounds like you're talking about Enron. The question was about Arthur Andersen. They aren't the same.
    M.
     
  5. Deane Johnson

    Deane Johnson Supporting Actor

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    Given the potential magnitude of the liabilities, I should think a likely scenerio might be that AA will be driven into full bankruptcy and someone will buy the assests out of that.

    Trouble is, the assets could erode pretty badly going through the bankruptcy, since the greatest assest would be their customer list and which of them will stick around.

    Just my uneducated guess.

    Deane
     

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