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CNN Live At Daybreak

Arthur Andersen Facing Problems In Trying To Sell Parts Of Company

Aired March 13, 2002 - 05:34   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: More fallout from the Enron collapse. The company's auditor, Arthur Andersen, is facing a new threat from Congress and more loss of business.

Our Financial News Correspondent Alan Chernoff has details for you.

(BEGIN VIDEOTAPE)

ALAN CHERNOFF, CNNFN CORRESPONDENT (voice-over): Oil and gas firm, Kerr McGee, is the latest company to dump Andersen as its auditor. The steady loss of clients is heightening the urgency of Andersen's efforts to sell itself. A source close to the situation confirms Andersen is in talks with several accounting firms to sell or merge portions of the company, adding it's possible a deal could be struck this week.

Only Deloitte Touche Tohmatsu will confirm it is talking with Andersen, saying, "The scenario planning exercise currently underway by our firm continues." Last week, Deloitte & Touche CEO James Copeland kept his cards close to the vest.

JAMES COPELAND, CEO, DELOITTE & TOUCHE: And I think they are just -- it's probably a separation of interest right now, because Andersen is working primarily on survival issues, and the rest of us are working on long-term issues that affect the profession and our firms individually.

CHERNOFF: The big problem Andersen confronts in trying to sell at least part of its business is potential liability. Price Waterhouse Coopers wants no part of that, saying, "We are not and have not been negotiating with Andersen either to merge or acquire them."

Meanwhile, Andersen's attorneys continue their effort to avoid an obstruction of justice charge from federal prosecutors.

A source close to the investigation says the negotiations may be completed as early as Wednesday. Former prosecutors say Andersen faces a tough battle with the Justice Department.

GREGORY WALLANCE, KAYE SHOLER: They tend to react harshly punitively. So I'm not surprised, assuming the evidence supports an obstruction of justice charge, that they would be reacting in the way that they are doing.

CHERNOFF (on camera): Congressional investigators are considering issuing subpoenas to Andersen to find out the results of its internal investigation into Enron-related document shredding. The House Energy and Commerce Committee has already granted Andersen two delays in briefings with committee officials. A Capitol Hill source says the committee is now growing impatient.

Alan Chernoff, CNN Financial News, New York.

(END VIDEOTAPE)

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