Investors in the bankrupt Baptist Foundation of Arizona (BFA) will receive $217 million from accounting firm Arthur Andersen under an out-of-court settlement announced March 1.
The settlement, the second largest ever paid by a “Big Five” accounting firm, headed off a trial scheduled to begin March 4. A lawsuit filed by a BFA liquidating trust had alleged negligence and breach of fiduciary duty by Andersen in audits of BFA.
Similar allegations are being leveled against Andersen in the Enron investigation.
Andersen denied any wrongdoing in the settlement, which resolves a class-action lawsuit by investors, along with a civil suit and disciplinary proceedings by state regulators. Andersen officials said they settled the lawsuit in an effort to avoid a long, costly legal battle.
“This settlement is an important step in building confidence in our firm,” the company said in a statement.
The lead lawyer representing the BFA trust, Sean Coffey, said the settlement is larger than normal in such cases and would put money in the hands of investors sooner instead of later.
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