PracticeConsultingEx-Andersen chief’s salary in jeopardy

Ex-Andersen chief's salary in jeopardy

George Shaheen, former managing partner of Arthur Andersen, has been declared an 'unsecured creditor' at Webvan, the online grocer which filed for bankruptcy protection yesterday.

Shaheen resigned as CEO of Webvan in April this year, with the promise of an annual salary of $375,000 (Pounds 266,000) for life.

But his unsecured creditor status places him at the bottom of the pecking order behind ‘secured creditors’, such as financial institutions and ‘preferential creditors’ who will be the first to be paid if a buyer is found.

When Shaheen left Andersen to head the dotcom in 1999, it was the accounting profession’s highest profile departure to a dotcom, at the height of the dotcom goldrush.

Webvan, which raised almost $800m (Pounds 568m) in venture capital when it set up operation, closed after spending nearly $700m (Pounds 497.5m) of the funds. All operations have ceased and 2,000 employees have lost their jobs. And the company has been de-listed from the Nasdaq.

The company, which operated by taking grocery orders online and delivering to customers’ homes, said it has no plans to resume operations and would wind down the business.

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