Isco, et al. v. Arthur Andersen, LLP and Jack Henry
Published: Jan. 1, 2000 | Result Date: May 10, 1999 | Filing Date: Jan. 1, 1900 |Case number: CV9508941 Verdict – $0
Judge
Court
Maricopa Superior
Attorneys
Plaintiff
Robert S. Green
(Green & Noblin PC)
Defendant
Michael L. Cypers
(Glaser Weil LLP)
Frank John Burke Jr.
(ADR Services)
Facts
The plaintiffs were a class of former shareholders of UDC Homes Inc. who bought stock in UDC three years before the company filed for bankruptcy. During those three years, the defendant Arthur Anderson LLP, an accounting firm, audited UDCÆs financial statements. The plaintiffs sued Arthur Anderson and Jack Henry, the Managing Partner of defendantÆs Phoenix office, seeking $95 million in compensatory and $1.3 billion in punitive damages for alleged negligence in the audits. The defendants claimed that the audits were performed to generally accepted auditing standards (GAAS), and that the UDC financial statements Arthur Anderson audited were fairly presented in accordance with generally acceted accounting principles. The defendants also asserted that UDCÆs failure was due to its capital structure which predated defendantÆs audit work, that UDC was mismanaged, and that UDCÆs decision to declare bankruptcy was due to a self-interested decision made by the former directors and officers.
Settlement Discussions
The plaintiffs demanded $55 million. The defendants made an offer of $7 million to $12 million with high-low binding arbitration.
Deliberation
9½ hours
Poll
7-2
Length
66 days
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