Andersen Pays Baptist Foundation
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PHOENIX (AP) _ Arthur Andersen LLP’s insurance company paid off the remainder of a $217 million settlement with investors in the failed Baptist Foundation of Arizona on Wednesday, assistant attorney general Tim Nelson said.
The foundation’s 1999 bankruptcy is the largest by a nonprofit agency in U.S. history. The collapse cost more than 10,000 mostly elderly investors about $570 million. Andersen was the foundation’s auditor.
Nelson said the balance of the payment, which was $205 million, was deposited Wednesday morning.
Attorneys for Andersen and the foundation did not immediately return messages left by The Associated Press.
The settlement resolves civil cases against the accounting firm related to the foundation’s collapse and pending cases brought by state regulators and the Arizona attorney general’s office.
Andersen backed out of an earlier $217 million settlement, saying its insurance company couldn’t afford to pay it. The firm then agreed to the new deal one week into a trial where the foundation’s liquidation trust sought $150 million in compensatory damages and more in punitive damages.
The insurance company, Hamilton, Bermuda-based Professional Services Insurance Co., is owned by Andersen Worldwide, the global umbrella that oversees U.S. arm Arthur Andersen LLP.
Andersen Worldwide provided additional money to the insurance company so it could meet the settlement obligation. Andersen would have been responsible for paying the money if the insurer didn’t pay.
After attorneys fees and expenses, investors will get back about $170 million from the settlement, said foundation lawyer Sean Coffey. He said another $170 million remains in trust assets.