Andersen Consulting split from its parent business, the accounting firm Arthur Andersen, in 2000.
The consultancy business was started by the accounting firm and gradually become more independent of its parent firm. Eventually it became bigger than its parent firm and started to resent paying large contractual transfer payments to the accounting firm for business which it had generated itself.
Arthur Andersen said it would only agree to a separation if Andersen Consulting paid $14.5 billion in compensation. The matter was referred to an arbitrator who rejected this claim but required Andersen Consulting to pay a much lower capitalised sum as commuted transfer payments, and to surrender its name. As Arthur Andersen has already set up its own successful in-house consultancy business, this could cause confusion for the 65,000 customers of Andersen Consulting.
After the settlement, both sides claimed victory in this bizarre dispute of a child wanting to be free of its parent. In reality, both businesses could be damaged.
[2000]