Court to Andersens: You Can Go Your Own Way

By Nick Wakeman, Staff Writer


AUG. 7 ? With both sides claiming victory, Arthur Andersen and Andersen Consulting are severing all ties to each other.


An arbitrator with the International Chamber of Commerce ruled that Andersen Consulting could split away from parent company Andersen Worldwide and does not have to pay the $14.5 billion Andersen Worldwide claimed was owed under a contractual agreement. Instead, Andersen Consulting will pay about $1 billion and will have to drop the Andersen name by the end of the year.


Andersen Consulting also will have to give back any technology jointly developed by the firms.


The decision announced Aug. 7 takes affect immediately.


Andersen Consulting filed for arbitration in December 1997 after several years of tension between Andersen Consulting and Arthur Andersen, also part of Andersen Worldwide. All three companies are headquartered in Chicago.
Part of the acrimony resulted from Arthur Andersen's moves into the consulting market. Andersen Consulting claimed that Arthur Andersen, by competing in the consulting market, violated the terms of the restructuring agreement that created Andersen Worldwide in 1989.


"This is a total win for Andersen Consulting," said Joe Forehand, global managing partner and chief executive of Andersen Consulting. "We won. Itís over."


Arthur Andersen, meanwhile, is claiming victory because Andersen Consulting has to return technology, pay $1 billion and stop using the Andersen name.


"We are pleased that the arbitration has upheld our position, and we are now prepared to move ahead with our own business plans," said Jim Wadia, worldwide managing partner for Arthur Andersen.


Those plans will not include Wadia, who resigned to take earlier retirement.


"It has been three years since I stepped into this role, time that has been spent helping our organization focus on being a leading service provider in the new economy," he said. "We are at a point following this decision to head forward into another period of exceptional growth and development."


Andersen Consulting has until the end of the year to come up with a new name, but it is something the company already had been contemplating, officials said. "This just accelerates the process," Forehand said.