Andersen reneges on settlement with Arizona

PHOENIX — The Enron collapse has reared its head in an Arthur Andersen announcement that the accounting firm is backing out of a $217 million settlement with victims of the Baptist Foundation of Arizona’s (BFA) 1999 collapse.

The Arizona Republic said 13,000 BFA investors had been told the March 1 settlement would, by the end of the year, help recoup 44 percent of an overall $585 million loss in the nonprofit agency’s collapse.

The BFA Liquidation Trust, which is seeking to recover the investors’ funds, immediately took action. In a March 29 statement, the trust said “one of the first steps will be to ask the mediator who presided over the settlement negotiations, retired federal judge Layn Phillips, to rule that Andersen has breached the agreement and to order Andersen to pay the $217 million as promised.”