PracticeAccounting FirmsCourt upholds $US183m award against PwC

Court upholds $US183m award against PwC

A US federal appeals court has upheld a $US183m malpractice award against PwC stemming from 1981-82

PricewaterhouseCoopers (PwC) is reviewing a US federal appeals court ruling
which has upheld a $US183m (£104m) malpractice award against its predecessor
Coopers & Lybrand, stemming from audits in 1981 and 1982 of the collapsed
insurance company Ambassador Insurance Co. About 22,000 creditors are entitled
to share in the award, plaintiffs’ lawyer Richard Whitney said.

Vermont’s insurance department, which seized the company in 1983 after
deeming it insolvent, claimed Ambassador’s financial statements concealed the
company’s weakness from regulators, The Evening Sun reports in the US.

After years of litigation, culminating in a 2005 federal trial in New Jersey,
a jury awarded damages of about $US120m to the creditors, which grew to $US183m
with pretrial interest.

The jury assigned 40% of the liability to PwC and 60% to the insurer’s
founder and president, the late Arnold Chait. But courts said the defendants had
joint liability, leaving the firm responsible for the entire award.
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