In an international arbitration, Cornerstone Research supported the claimants, the Andersen Consulting firms (Andersen Consulting), in their breach of contract claim against the Arthur Andersen firms (Arthur Andersen) and Andersen Worldwide.
Retained by Simpson Thacher & Bartlett
In an international arbitration, Cornerstone Research supported the claimants, the Andersen Consulting firms (Andersen Consulting), in their breach of contract claim against the Arthur Andersen firms (Arthur Andersen) and Andersen Worldwide. Andersen Consulting claimed that Arthur Andersen and Andersen Worldwide breached their contractual obligations to Andersen Consulting by establishing and growing a Business Consulting group within Arthur Andersen that competed directly with Andersen Consulting.
Andersen Consulting requested an arbitration hearing with the International Chamber of Commerce to decide whether a breach had occurred and, if so, to grant Andersen Consulting the right to terminate the contractual relationship. Andersen Worldwide and Arthur Andersen maintained that according to a clause in the agreement, Andersen Consulting would be required to pay approximately $14 billion in liquidated damages to sever such contractual relationships.
Cornerstone Research worked with three business school experts. Professor George Foster of Stanford University opined on the transfer payments between the respective business units of the separate firms. Professor Kevin Keller of Dartmouth College valued the Andersen Consulting brand and opined as to the damage caused to the brand by the competition from Arthur Andersen. Professor Jay Lorsch of Harvard University addressed the responsibility of Andersen Worldwide to minimize competition from Arthur Andersen and the harm done as a result of the creation of the Business Consulting group within Arthur Andersen.
The arbitrator ruled in favor of Andersen Consulting, releasing them from the contractual relationship without any payment of liquidated damages.