PracticeConsultingAndersen readies split

Andersen readies split

The two warring factions of Andersen Worldwide have appointed an arbitrator to oversee the firm's divorce.

Colombian lawyer Guillermo Gamba, whose final decision is expected to be binding, took on the gruelling full-time challenge last month and is not expected to resolve the issue until the end of next year.

Gamba’s first task is to establish terms of reference for the split between Andersen Consulting and Arthur Andersen, which centres on the practice of pooling profits. Consulting partners complained that Andersens partners are ‘creaming off’ $100m (#60.8) annually.

Jim Wadia, Arthur Andersen Worldwide’s managing partner, was vexed when Consulting filed for arbitration last December after rejecting a conciliatory set of proposals by Andersens.

Consulting, which was spun off in 1989, lodged a detailed claim for an irrevocable ‘divorce’ with the International Chambers of Commerce in Paris at the start of the year. It wants $400m (#238.8) compensation for a series of alleged abuses that includes Andersens trading on its reputation, poached staff and use of pooled fees.

The compensation claim is roughly equal to the income paid from Consulting to its sibling since 1989. Countering that is a claim for $9bn by Andersens, which is equivalent to 18 months’ fee income.

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