One Settlement in Ongoing Legal Battle over Andersen Name

By:
Chris Gaetano
Published Date:
May 3, 2017

enrons-auditor-arthur-andersen-is-sort-of-making-a-comebackFifteen years after the collapse of Arthur Andersen, two firms are now battling in court over which is the true heir to its brand name, despite its associations with the Enron scandal, one of the largest accounting frauds of all time.

Arthur Andersen had, before its spectacular fall, been one of the largest and most successful CPA firms in the world, and its ultimate end as a functioning business reduced what previously had been the Big Five into the Big Four that people know today. The meltdown came about due to the role played by some of Arthur Andersen’s leaders in Enron’s multibillion-dollar accounting fraud, which led to the firm’s 2002 conviction on charges of obstruction of justice for shredding documents related to the scandal. While the U.S. Supreme Court overturned the conviction in 2005, the firm’s association with Enron had already severely damaged the brand, and it carried on as a holding company mainly to oversee lawsuits and its own orderly dissolution. It appeared that this was the end of the Arthur Andersen brand.

In 2014, however, the tax firm WTAS, which included many Andersen alumni, decided to change its name to Andersen Tax LLC, directly referencing the former Big Five firm. Then, this year, a Paris-based firm announced its own formation under the name Arthur Andersen International. The March disclosure, however, sparked off a legal battle between the two entities over which firm should get to use the name as a trademark. In March, Andersen Tax sued the French firm in France and in federal court in San Francisco. Statements released by both firms at the time indicated that neither intended to stand aside on the matter. However, on April 19, Andersen Tax announced that a settlement had been reached with MoHala Enterprises, which was running the French firm’s U.S. offices. MoHola Enterprises agreed never to use the terms “Andersen” or “Arthur Andersen” to promote its professional services consultancy. It also agreed to withdraw its membership as an affiliate of the French organization and to dissolve Arthur Andersen LLP, a California limited liability partnership that it had previously formed for the purpose of serving as the U.S. member and affiliate of the French organization. Litigation against other firms affiliated with the French firm over the name is ongoing.

Arthur Andersen International did not respond to a request for comment.

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