Revealed: how Andersen abandoned its UK partners

Seven Andersen Legal partners hung out to dry; TJG in talks with Garretts team

Six Garretts partners and Andersen Legal worldwide managing partner Tony Williams still face potentially ruinous US litigation over Enron. The Garretts partners are also Andersen Worldwide partners and so face class action claims, despite the fact that they had no real connection with the Enron scandal.
It has emerged that all of Andersen Legal's equity partners, including the Andersen Worldwide partners, were virtually abandoned when Andersen UK partners signed a life-saving deal with Deloitte Touche Tohmatsu. Taylor Joynson Garrett may take a significant proportion of Garretts' City practice, but despite this last-ditch deal, the Garretts partners have been left exposed to major liabilities.
When Andersen UK signed up with Deloittes, it is understood that Deloittes immediately injected millions of pounds into the ailing accountancy firm to cover redundancies and ongoing overheads. However, because Andersen Legal was set up as a separate partnership, the partners received no money to cover these costs.
An Andersen UK spokes-person said: “We're a private partnership and we see no reason to comment publicly.” It is understood that negotiations are taking place between Andersen Legal and other Andersen partnerships over a settlement, but the law firm has received no money as yet.
TJG is considering a deal to take on a maximum of 10 Garretts City partners and up to 15 assistants from com-mercial property, corporate finance and employment. But the deal still needs to be cleared by a TJG vote. In a statement to The Lawyer, TJG managing partner Gary Moss said: “I can confirm we're talking to some people from Garretts.” He refused to comment further and it is unclear how many support staff are involved.
It is believed that several of the partners going to TJG, including property partner Keith Barnett and corporate partner Andrew Smith, are among the Andersen Worldwide partners still facing Enron-related US litigation. The other Garretts Andersen Worldwide partners are believed to be Simon Atiyah, James Greig, David Roberts and Lance Feaver.
The Swiss-registered And-ersen Worldwide partnership was added to a claim by Houston class action firm Milberg Weiss Bershad Hynes & Lerach on 8 April. It consolidates most of the Enron class action suits. The Andersen Worldwide organisation maintains that its partnership structure ring-fences liability. But many of the key partners in talks with TJG could face disruptive US litigation through no fault of their own.
The future of the other Andersen partners and staff remains unclear. It is understood that some partners are in talks with former Andersen Legal member Dundas & Wilson. Dundas has confirmed that it is in negotiations, but it is not expected take all the City lawyers outside the TJG deal.
Other Andersen London lawyers are conducting negotiations individually. The Reading, Birmingham and Manchester offices are still in talks with regional firms.