Enron creditors score a win
Judge orders Andersen to produce witnesses and documents; law firm also named.
February 28, 2002: 2:35 p.m. ET
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NEW YORK (CNN/Money) - Enron Corp.'s creditor committee won a key motion Thursday that will force the testimony of several Arthur Andersen witnesses and compel the accounting firm to provide documents regarding its role in the energy trader's collapse.
On Thursday, Judge Arthur Gonzalez of the U.S. bankruptcy court for the Southern District of New York ordered Andersen to produce documents and testimony from eight current or former employees, including fired auditor David Duncan and Michael Odom, the risk management partner responsible for the firm's Houston office.
Law firm Davis, Polk & Wardwell is also named in the order and will have to provide documents and witnesses. However, the names of the law firm's personnel were not revealed in the court documents.
Judge Gonzalez authorized the creditors committee to issue subpoenas or use other processes to force the firms to provide documents and witnesses.
Chicago-based Andersen has come under considerable scrutiny for its role in Enron's collapse. The accounting firm fired Duncan for allegedly instigating a meeting to shred Enron-related documents. Enron filed the largest bankruptcy in United States history last December.
Duncan is reportedly now negotiating with the Department of Justice to provide testimony against key Enron executives in exchange for immunity.
Davis, Polk was included in Gonzalez's order because it advised Andersen "on document and retention issues," court documents said.
Andersen allegedly retained Davis, Polk on Oct. 9, 2001 the same day an accounting firm employee sent an e-mail to Andersen's Chicago office concluding that Enron's financial statements contained a "high risk of fraud," the creditors committee said.
Andersen began a massive effort to destroy Enron-related documents on Oct. 23 but Davis, Polk didn't tell them to stop shredding until Nov. 10, the creditors claim.
Davis, Polk is also conducting an investigating Andersen's destruction of Enron documents, court documents said.
"In light of Andersen's purposeful destruction of documents, despite the fact that it had received advice from DPW on that very issue, the discovery sought by the committee is essential to its identification of potential claims against third parties, including, but not limited to, Andersen," the creditors said in a Feb. 15 motion.
Chicago-based Andersen declined to comment. Davis, Polk was not immediately available for comment. 
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