Seeking to pull itself out of the Enron quagmire, Arthur Andersen reportedly is attempting to negotiate a settlement with Enron shareholders, unsecured creditors and employees in Enron’s 401(k) retirement plan, according to a story this morning in the Wall Street Journal.

The current settlement offer is between $700 million and $800 million, the Journal says, relying on “someone involved in the process” for its information. Andersen is looking for a one-time settlement that will encompass any potential civil claims by the Securities and Exchange Commission. The firm has been accused of botching its job as Enron’s auditor and shredding documents relating to the audits after Enron’s bankruptcy, when it appeared there would be an investigation.

In attempting to put the Enron case behind them, sources say the firm may have to pay as much as a billion dollars, with the money coming from Andersen itself, its insurers and possibly from individual partners. The company has lost clients since the Enron debacle surfaced and is concerned a continuing scandal also will harm its recruiting efforts.

In another action, two insurance companies are attempting to avoid paying out on policies on Enron directors, telling the bankruptcy court in New York City there were “material misrepresentations” involved in initiating those policies, according to an article in the New York Times. If the two firms, the St. Paul Mercury Insurance Co. and the Royal Insurance Co. of America, are successful in nullifying the policies, nine other insurance companies with similar policies on officers and directors of Enron could follow suit. The Times said directors and officers have an estimated $350 million in insurance coverage.

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