PracticeConsultingInsolvency – PW and E&Y settle on BCCI

Insolvency - PW and E&Y settle on BCCI

The auditors of the Bank of Credit and Commerce International, which crashed in 1991 with estimated debts of $17bn, have settled claims made on behalf of the creditors for just $195m (#118m).

Deloitte & Touche accepted the settlement, which amounts to just 2% of the original $11bn (#6.5bn) claim, from former auditors Price Waterhouse (now part of PricewaterhouseCoopers) and Ernst & Young.

The settlement, signalled last week in Accountancy Age, brings to an end the largest ever civil suit against a firm of auditors, following the biggest corporate collapse in history.

Under the agreement, PW will pay $95m and E&Y, $35m. Both payments will be covered by personal indemnity insurance of partners in PW and Ernst & Whinney – now part of Ernst & Young – in the UK, Luxembourg and Cayman Island firms.

The remainder will be paid by principal shareholder, the Abu Dhabi government.

Observers said the relatively small sum was agreed after several significant payouts to creditors. By the end of last year, the claims against each firm had been reduced to $1.8bn.

But it was the prospect of spiralling legal fees and a possible ten-year court wait that finally closed the settlement.

Ian Brindle, senior partner of PW before its merger with Coopers & Lybrand, said he hoped the disparity in the figures demonstrated the original claim’s lack of merit.

Deloittes is disputing a #1.1m reduction in fees, imposed by a Luxembourg court.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer