Partners mayArthur Andersen Hawaii, dragged into a quagmire by its embattled parent, is preparing to distance itself from what has become the worst accounting scandal in U.S. history.
buy local Arthur
Merging with another
Honolulu accounting firm is
also under consideration
By Dave Segal
Ross Murakami and Randy Karns, partners of the accounting firm's lone office in the state, are negotiating with Arthur Andersen LLP to take over the Hawaii office as well as considering options to merge with another Hawaii accounting firm.
The buyout deal, which likely would close within a month, would result in a name change if the partners buy the firm. No layoffs are expected, Murakami said.
The Bishop Street office, in the Pacific Guardian Center, has about 45 employees -- about 20 less than it had less than two months ago. Murakami said the firm intends to remain in that office if the buyout goes through.
"We haven't come to a definitive agreement and we're still looking at various options," Murakami said. "I think we're relatively close to an agreement. It's just that nothing's done until it's done."
Murakami said he intends to make the retention of the current employees a condition if they merge with another firm. He said he is currently talking with several Hawaii companies.
"Our concern has always been to provide opportunities for our people to go forward in their chosen career and also to continue to serve our clients the way we've always been servicing them -- with integrity and a high level of professional service," Murakami said. "That's our goal and we are evaluating the different options in order to achieve those goals."
Most of the firm's clients have agreed to remain with the new owners despite the Chicago-based parent's mounting problems, Murakami said.
"I can count on one hand the number of clients who have left," he said.
A federal jury in Houston deliberated for nine hours yesterday without reaching a verdict on obstruction-of-justice charges that Andersen is facing for shredding Enron Corp. documents. The jury resumed deliberations today and will continue tomorrow if no decision is reached.
"Whatever the verdict, that's not going to have a significant impact as we consider our various options," Murakami said. "Unfortunately, the firm's reputation has been damaged from this whole Enron issue."
The Hawaii office's effort to shed the Arthur Andersen name mirrors moves taking place around the world as the company appears headed for extinction.
Just today, accounting firm Grant Thornton LP reached a deal to acquire Andersen's Albuquerque, N.M., and Orlando, Fla., offices, paying Andersen an undisclosed fee for the offices and negotiating individually with the partners and staff. It also hired Andersen employees in other cities. Among other top accounting firms, Deloitte & Touche LLP has hired 191 Andersen tax partners as well as audit staff in Las Vegas. KPMG LLP acquired Andersen offices in Philadelphia, Seattle and Salt Lake City. Ernst & Young hired Andersen employees in Baltimore; Chicago; Detroit; Nash-ville, Tenn.; and Pittsburgh.
More than 650 of the parent firm's 2,300 clients have left since the charges were handed down March 14. Many of those severing ties are publicly traded companies. All of the Hawaii office's clients, however, are privately held companies.
"The firm is considering many options that is best for its people and its clients," said Jennifer Frost, spokeswoman for Arthur Andersen's North America operations. She declined to provide any information about the Hawaii office.
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