PracticeConsultingAndersen’s De Lorean hopes dashed

Andersen's De Lorean hopes dashed

Arthur Andersen’s hopes that its controversial audit of the De Lorean sports car company would be laid to rest were dashed last week by a US court.

The firm was told it had failed in its application to have a $100m (#62m) claim from the creditors of founder John De Lorean’s US parent company thrown out.

The decision follows a similar action brought by the UK government which pumped #77m into the Belfast-based De Lorean Motor Company before it collapsed in 1982.

Arthur Andersen agreed to pay over #20m in an out-of-court settlement last year, a sum roughly equivalent to the legal bill paid by the UK taxpayer.

The actions arise from allegations that Arthur Andersen failed to spot a massive fraud that led directly to the collapse of the car company. The accountancy firm, on the other hand, has argued that government officials knew the investment was a high-risk venture and put inadequate safeguards in place.

A judge in New York ordered the trial start on 29 January. A spokesman for Arthur Andersen responded: ‘The firm resists the allegation made by the trustees and will present a vigorous defence.’ Insiders expect the dispute will be settled to avoid a costly hearing.

The trustee in the bankruptcy, David Allard, is pursuing the action after Arthur Andersen failed to have him included in the deal with the government.

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