Ed Nussbaum, managing partner of Grant Thornton LLP, has met with Arthur Andersen LLP partners and employees across the country, picked up eight Andersen audit clients and talked to 100 more in the past month.
"We don't want to be vultures but at the same time Andersen seems to be falling apart and those clients need service," Nussbaum said. "We're also talking to individuals throughout the country, both partners and staff of Andersen."
Andersen, indicted on a federal charge of obstruction of justice for shredding documents related to its audits of Enron Corp, has lost more than 70 US audit clients this year.
Grant Thornton, the seventh-biggest US accounting firm, and other US rivals from market leader PricewaterhouseCoopers LLP to No. 10 McGladrey & Pullen, see Andersen's troubles as an opportunity. The key is to get Andersen assets, including partners, without assuming Andersen's legal liabilities, mainly from lawsuits connected to its Enron audits.
That may not be possible now, though the obstacles that have so far made Andersen's competitors reluctant to hire partners or buy parts of its US operations, such as its tax and consulting businesses, may soon be removed, executives and analysts said.
Andersen partners may vote to rescind the non-compete clauses in their contracts that prohibit them from going to work at other firms and taking Andersen clients with them. That decision is one of many that Andersen's management must make in days. The firm also must decide on an interim chief executive officer after Joseph Berardino announced his resignation Tuesday.
Unless the clause is revoked, the other firms are unlikely to hire them, because the clause would allow plaintiffs to pursue claims against the partners' new employer, claiming that hiring the partner contributed to Andersen's inability to satisfy claims, said Notre Dame Law School professor Matthew Barrett.
Andersen partners also must decide whether to support a proposal by former Federal Reserve Chairman Paul Volcker that would separate the auditing business from tax, consulting and other units, and install a panel empowered to reshape practices.
The offer is a bid to persuade the Justice Department to drop its indictment, and plaintiffs to reach a settlement of civil suits.
At the same time, Andersen's client defections will increase the need for its competitors to hire Andersen partners and staff.
PricewaterhouseCoopers and Ernst & Young LLP have gained seven S&P 500 clients each this year from Andersen, which require a lot of people with sufficient experience auditing large companies.
"With all this new business coming in, we obviously need to ramp up our resources," said Steven Silber, a spokesman for PricewaterhouseCoopers. "Andersen has many smart, honest people, and we will look at every one of them."
The pressure can be even greater at smaller firms.
"All of a sudden the floodgates are opening up and we're getting our share of calls from clients looking to make changes," said Mark Hildebrand, chief executive officer of Crowe Chizek LLP, the No. 9 accounting firm. "We've hired Andersen people, a couple just recently, though no partners."
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
BULLY TACTICS: Beijing has continued its incursions into Taiwan’s airspace even as Xi Jinping talked about Taiwan being part of the Chinese family and nation China should stop its coercion of Taiwan and respect mainstream public opinion in Taiwan about sovereignty if its expression of goodwill is genuine, the Ministry of Foreign Affairs (MOFA) said yesterday. Ministry spokesman Jeff Liu (劉永健) made the comment in response to media queries about a meeting between former president Ma Ying-jeou (馬英九) and Chinese President Xi Jinping (習近平) the previous day. Ma voiced support for the so-called “1992 consensus,” while Xi said that although the two sides of the Taiwan Strait have “different systems,” this does not change the fact that they are “part of the same country,” and that “external
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source