Two former managing partners and chief executives of Arthur Andersen are weighing in on the legal wrangling over the Arthur Andersen name between Andersen Tax and a new firm based in Paris that claims to hold the trademark, as the dispute escalates further.
Lawrence A. Weinbach, who was managing partner and chief executive at Andersen Worldwide from 1989 to 1997, vouched for the Andersen Tax side. “These people have been longtime Andersen partners and many of the key leadership now in the firm of Andersen Tax worked for me,” he told Accounting Today. “I go back a long time with these people.”
Weinbach was also chief operating officer at Andersen from 1987 to 1989 and managing partner starting in 1983. In contrast, he said he’s unfamiliar with the French firm laying claim to the Andersen name.
“What’s surprising to me is the firm in France which alleges that they own the Arthur Andersen name, that’s not a group of people who were partners,” said Weinbach. “I was a partner in the firm from 1970 to 1997 when I left, so for 27 years with all kinds of positions around New York, chief operating officer, chief executive, and so forth. There was a manager there in Paris, I believe, who now claims that he’s the reincarnation of Arthur Andersen.”
Last week, a Paris-based firm calling itself Arthur Andersen announced it had reconstituted the former Big Five firm in 16 countries, including the U.S., but its rights to the brand are being challenged by Andersen Tax, a firm founded by former Andersen partners that changed its name in 2014 from WTAS to Andersen Tax (see
Firms vie over rights to Arthur Andersen name). The global managing partner of the new Arthur Andersen, Stéphane Laffont-Réveilhac, and the CEO of Andersen Tax, Mark Vorsatz, have been trading accusations over the past week (see Dispute over Arthur Andersen name heats up).
Duane Kullberg, who was CEO and manager partner of Arthur Andersen from 1980 to 1989, also expressed skepticism about the French firm. “The French firm presumably believes it has some rights to the name, but we believe they don’t,” he said. “It’s a litigation issue at the present time. Andersen Tax bought the rights to the name from the residual holders of the old Arthur Andersen firm. The legal arguments go back and forth, but the French firm in any event has a narrow ownership. It doesn’t cover the world certainly. That’s going to have to be settled. Maybe their objective is to get a settlement. I’m not involved in the legal theory of it, but that’s not atypical.”
Anderson Tax CEO Mark Vorsatz told Accounting Today that Laffont-Réveilhac had emailed him repeatedly and demanded $87 million from him. “They did ask us for $87 million and of course we declined,” he said. He said Laffont-Réveilhac continued to email him until he cut off contact. He said the only former Andersen person he knows of at the new firm is someone who was a former manager, but not a partner.
Laffont-Reveilhac disputed Vorsatz’s account and promised to provide evidence at a press conference next Wednesday in New York. “Mr. Vorsatz tells lies and we will share evidence at the press conference,” he said in a statement emailed to Accounting Today. “In 2015, Mr. Vorsatz asked to buy our rights. Amount announced is pure affabulation and pure delirium. By the way, all of our discussions were covered by an NDA. Mr. Vorsatz has no limit and does not respect the NDA either. He asked me to come to Houston in August 2015 to make them a proposal to buy our rights. If they already have the rights, why did they ask to buy them from us? We have already transmitted emails to the judge in France. They are now under criminal investigation for organized fraud. All relevant documents will be shared with the press in New York.”
His spokesperson said the press kit that will be distributed at the press conference next week will include quotes from some former Andersen alumni, ranging from associate to senior partners who worked at Arthur Andersen offices around the world and have now rejoined Arthur Andersen.
In last week’s
announcement, Laffont-Réveilhac said the newly reconstituted Arthur Andersen has 26 offices in 16 countries on five continents. Andersen Tax, in contrast, has 58 locations around the world. Weinbach is doubtful about the existence of all the offices claimed by the new Arthur Andersen.
“My bottom line is I would be very surprised to hear that a person who had been a manager in a French firm has been able to create this worldwide firm which he is now calling Arthur Andersen, for which it’s very difficult to find an office,” said Weinbach. “You’ve also got to wonder when they set up an office is it an answering service, or is it a fully staffed office? Do they have any names of clients that they would refer you to or what kind of services are they doing? None of that. I would have heard about it just because of my background with Andersen. It’s shocking, whereas I do know the Andersen Tax people. They’ve been quite successful. They’re growing. A lot of firms have come to them. The reason I know is that a lot of those people were partners in the firm when I was still there.”
Kullberg believes the legal dispute will be worked out eventually and Andersen Tax will continue to expand around the world. “I think the French issue is in my mind an aggravation, but a relatively minor aggravation,” he said. “It’s been going on for more than a year, I think, but we believe that the rights we acquired and what we did in France preempts their claim for use of the name. Now, as is typical with arguments like that, it takes time and it takes legal back and forth in order to solve it. But I don’t look at the French issue as something that is an impediment to the progress of Andersen Tax. There are so many other areas of the world that Andersen Tax has been successful in that it shouldn’t be a major stumbling block. The basic strength of Andersen Tax is the people who started it and the people who joined it have a background of working under an Andersen system and the culture that goes along with that. That’s what attracts them. Any new business is going to have its startup issues, but so far it’s been doing very well.”
The Chicago building housing the headquarters of Arthur Andersen in 2002
John Zich/Bloomberg News