Andersen broke off the talks aimed at settling charges stemming from the firm’s alleged destruction of documents related to its work for now-bankrupt Enron. A lawyer for the embattled accounting company notified the U.S. Justice Department that the settlement as proposed could not be accepted.
“We just agreed that we’re just not there right now,” Rusty Hardin, an attorney for Andersen, said late Thursday. “We rejected certain proposals by the government and agreed to continue to review other proposals of the government, but we could not complete that review within the time frame the government was demanding.”
Hardin did say the firm was leaving the door open to future talks, but that any deal would have to allow Andersen to continue operating.
“Arthur Andersen is willing to agree to any reasonable conditions as a settlement that will allow the firm to continue to exist and function for those who wish to participate in a successor firm,” Hardin said. “What happened here is both sides negotiated in good faith, but they reached an impasse because each has very different views of what Arthur Andersen can be reasonably expected to do in the future and survive.”
The Justice Department, which had set the deadline for an agreement from Andersen, said it would begin readying for the court case slated to begin May 6.
“We are continuing to prepare for trial,” Justice spokesman Bryan Sierra said.
The talks ended after the two sides had reportedly reached agreement on the outline of a deal. Newspapers had reported an announcement of a settlement was hours away before the sudden collapse occurred.
According to published reports, lawyers for the two sides were at an impasse over the specific language admitting guilt for the destruction of Enron documents.
Other sources said the talks broke down in part because of divisions within the beleaguered accounting firm.
“The firm is clearly fractured,” one person involved in the situation told the New York Times. “And at this point, it is not speaking in a single voice.”
Andersen has been hemorrhaging clients and money since the news of the Enron scandal broke late last year and many have said a criminal conviction and even a trial could mean the end of the company.