Key Andersen Legal partners, including senior partner Tony Williams, face massive claims as they are members of the unlimited Andersen Worldwide Partnership.
The setback comes as the network was saved from collapse by merger talks between Andersen and KPMG parent companies. Several Andersen Legal members, including Garrigues and Andersen Luther, indicated to The Lawyer that they were kept in the network by the merger talks (see box). But the major impediment to a merger is the potential liability of And-ersen’s non-US partners.
Seattle-based class action firms Hagens Berman and Keller Rohrback represent former Enron employees who saw their shares and pension funds wiped out as Enron collapsed. Joint lead counsel Steve Berman said: “We intend to attack the Worldwide Partnership. We have a deadline of 1 April to file an amended complaint.”
In a blow for Andersen’s UK-based partners, Berman also said: “The document shredding in London is the main reason for attacking the worldwide partnership.” Berman declined to comment on how he would prove the supposedly ring-fenced Andersen Worldwide liable.
Finers Stephens Innocent partner and partnership expert Michael Simmons said: “We’re in a whole new world of litigation. This has never happened before, but it could well be that the whole umbrella structure of the Andersen partnerships comes crashing down. Andersen was using various vehicles for channelling its work, but the partnerships were trading together with a view to a profit and using common branding. I see no reason why a Houston court would not be swayed by this.”
Simmons warned that as the litigation is US-based, Andersen partners could be liable for triple damages. The attempt to extend liability has been restricted to class action firms which try to join as many defendants as possible to a claim. Should Enron’s creditors attack non-US partners, it could sound the death knell for any merger.
|Merger talks: latest|
| The KPMG merger talks arrived just in time to prevent the collapse of the Andersen Legal network. But several member firms are still investigating alternatives to the merger.
Andersen Legal Russia
Andersen Luther, Germany
Dundas & Wilson, Scotland
Kwok & Yi, Hong Kong
Rajah & Tann, Singapore