'Reconstituted' Arthur Andersen closes U.S. offices amid trademark infringement suit

The U.S. offices of a recently relaunched Arthur Andersen network have shut down as part of a legal settlement to partially resolve trademark infringement claims by U.S.-based Andersen Tax.

In March, French businessman Stéphane Laffont-Réveilhac announced that he had “reconstituted” the former Big Five firm in 16 countries, including the United States, with offices in Chicago, Houston, New York and San Francisco (later changed to Monterey). Laffont-Réveilhac called himself global managing partner of Arthur Andersen. His former company was the consulting firm Quatre Juillet Maison Blanche, a French translation of Fourth of July White House.

The original Arthur Andersen and Andersen Worldwide collapsed in the wake of the Enron and WorldCom accounting scandals of the early 2000s. However, the new entity's rights to the Andersen brand and trademark were challenged by Andersen Tax, a firm founded by a group of 23 former Andersen partners that has been growing its presence around the world after buying the rights to the Andersen name and changing its name from WTAS to Andersen Tax in 2014 (see Firms vie over rights to Arthur Andersen name).

Andersen Tax CEO Mark Vorsatz filed suit against Laffont-Réveilhac and several of his colleagues in France and the U.S. accusing them of trademark infringement, as the legal battle grew more contentious (see Dispute over Arthur Andersen name heats up). With former CEOs and managing partners of the original Arthur Andersen throwing their support behind Andersen Tax, along with the founder's great-granddaughter Kristin Andersen, the new Arthur Andersen canceled a press conference that was scheduled for last month in New York in which it had promised to answer questions about the dispute and provide testimonials from several Andersen alumni (see Former Andersen chiefs support Andersen Tax in dispute over Andersen name and Dispute over Arthur Andersen legacy continues).

On Wednesday, Andersen Tax announced a settlement with the firm running Arthur Andersen's offices in the U.S., MoHala Enterprises, also known as Sundial Consulting, which is headed by Imad Hala, who had been named by Laffont-Réveilhac in March as North America managing partner for the new Arthur Andersen.

“MoHala Enterprises doing business as Sundial Consulting, and Andersen Tax today announced that they have reached an amicable settlement to a trademark infringement dispute that began in March, 2017,” Andersen Tax said in a news release. “Although the specific terms of the resolution are confidential, MoHala Enterprises d/b/a Sundial Consulting has agreed never to use the terms 'Andersen' or 'Arthur Andersen' to promote its professional services consultancy, and has withdrawn its membership as an affiliate of the French society calling itself 'Arthur Andersen & Co.' Sundial Consulting will also be dissolving Arthur Andersen LLP, a California limited liability partnership it previously formed for purposes of serving as the U.S. member and affiliate of this French society. Andersen Tax, which is the owner of multiple trademark registrations incorporating the name 'Andersen' for tax and business consultation services around the world, filed suit against MoHala Enterprises based upon those rights last month, resulting in today’s announced settlement.”

Litigation is continuing, however, against Laffont-Réveilhac, his co-founder Véronique Martinez and the new Arthur Andersen & Co.

Andersen Tax managing director and associate counsel Oscar Alcantara told Accounting Today that the settlement and injunction only deal with the U.S. market, specifically the former U.S. affiliate of the French network. “Because trademark law is territorial in nature, we must enforce our rights country-by-country,” Alcantara said in an email. “The U.S. is obviously a significant one for us in the international marketplace.”

He noted that the Arthur Andersen website no longer lists any contact information for offices in the U.S. and the phone numbers formerly listed for those offices don't work anymore either. But Arthur Andersen still claims to be operating in other countries, particularly Europe.

“Our litigation against Laffont-Reveilhac, Martinez and Arthur Andersen & Co., SaS continues in multiple jurisdictions, including in the United States,” Alcantara added.

Hala confirmed the settlement, but declined to provide details. “I do not have any comments, as the nature of our settlement is confidential,” he wrote in a LinkedIn message. “Though I will let you know that we are on good terms with Andersen Tax.”

Vorsatz told Accounting Today he is continuing to expand Andersen Tax in Latin America. “I am actually in Argentina meeting with firms,” he wrote in an email. “I will be here for two days and then to Uruguay for more discussions. Actually meeting with about 27 firms in 8 countries this month as we continue our evaluation, due diligence and expansion plans.”

He said Hala's firm had actually pursued the settlement with Andersen Tax.

“As indicated, we own the trademark to Andersen brand globally and we intend to enforce our legal rights,” said Vorsatz. “This group (in the US) that had affiliated with the individual in France approached us regarding a settlement as soon as the complaint was filed. I understand that they have taken themselves off the website and agreed to an injunction to avoid any further potential litigation and damage claims.”

Other firms that have affiliated with the new Andersen may follow suit, he hinted. “We have been approached by a couple of other groups who had paid fees to this individual in France and did not realize that they did not own the brand,” said Vorsatz. “I think the actions and reactions speak for themselves and make a statement about the individual in France and the payments that have been made to him under these arrangements.”

Laffont-Réveilhac, Martinez and a U.S. spokesperson did not respond to requests for comment. However, Laffont-Réveilhac posted an announcement on LinkedIn last week indicating that Arthur Andersen is looking to Europe to advance its expansion strategy. “The European continent is the next step of our ambitious strategy of development,” he wrote. “It is crucial to have a significant presence in the coming months in Europe. We are in contact with various structures that wish to join us, including France, Italy, Spain, Germany and the UK. Therefore, we strive for a rapid increase in power, while taking all the time necessary for a rigorous selection of our future affiliated members for a network of first quality.”

JOHN ZICH/BLOOMBERG NEWS