NEW YORK (CNN/Money) - David Duncan, the former Arthur Andersen LLP auditor whose shredding of Enron Corp. documents led to his firm's criminal indictment, pled guilty to obstructing justice Tuesday and admitted that he directed the destruction to thwart a federal investigation.

Duncan, who has agreed to serve as a government witness, entered the guilty plea to a single felony charge in federal court in Houston Tuesday afternoon as part of a deal with prosecutors. The former Andersen auditor read a statement to the court in which he admitted to overseeing the shredding of Enron documents while knowing about an investigation by the Securities and Exchange Commission.

"Documents were in fact destroyed so that they would not be available to the SEC," Duncan said.

Duncan was responsible for the destruction of documents between Oct. 23 and Nov. 9, when he was the global managing partner on the Andersen team handling the Enron account, according to a Justice Department document filed with the court earlier Tuesday.

An Andersen employee, right, who got laid off Monday gets help leaving the firm's Chicago offices.

According to the plea deal, the former auditor knowingly and intentionally persuaded other Andersen employees and partners to withhold documents from an investigation conducted by the SEC and also destroyed and concealed documents in an attempt to hamper the federal investigation.

The former Andersen partner waived his right to a trial as part of the plea agreement. Duncan faces a maximum penalty of 10 years in prison and a $250,000 fine, Judge Melinda Harmon said during the hearing. He will be sentenced April 26. Details

Separately, a New York bankruptcy judge ordered the appointment of an independent examiner Tuesday who will investigate Enron Corp.'s thousands of partnerships. The examiner will have the authority and power to investigate all transactions involving the energy trader and any entity controlled by Enron, Judge Arthur Gonzalez said Tuesday.

U.S. Trustee Carolyn Schwartz will appoint the examiner. Once approved, the examiner will have 120 days to file an initial report and will file reports every 120 days thereafter, court papers said.

Gonzalez is overseeing the bankruptcy of the once-mighty energy trader which allegedly used off-the-book partnerships to hide nearly $1 billion in debt and profits. Enron filed the largest bankruptcy in U.S. history on Dec. 2.

Meanwhile, leveraged buyout firm Fox Paine & Co. has launched a bidding war for Arthur Andersen LLP's tax unit, and has signed a memorandum of intent to buy the entire practice, a source familiar with the negotiations told CNN/Money.

The offer would include Andersen's 4,000 professional and support staff across the United States, the source said.

The bid from Fox Paine challenges an offer made by Deloitte & Touche last week. The Deloitte proposal calls for a significant number of Andersen's U.S. tax partners and tax professionals to join Deloitte. Details

Examiner Harrison Goldin said Tuesday that the assets of Enron North America should be kept separate from parent Enron Corp. The Houston-based energy company has enough cash on hand for at least the next 90 days without having to resort to sale of its assets, Goldin said in court documents.

Creditors in February claimed that parent Enron was improperly distributing the assets of Enron North America, which generated a big chunk of Enron's $101 billion in sales last year. Judge Gonzalez appointed Goldin to settle whether the assets should be controlled by Enron Corp. or Enron North America.

On Monday, Andersen said it plans to cut 7,000 jobs in the United States as it struggles to survive a client exodus and continued defections of its member firms all over the world.

Andersen, which has about 26,000 staff in the United States, said the reduction would affect primarily the firm's audit practice and back-office administration. The layoffs will be implemented in the next several months, Andersen said. Details

Also on Monday, nine Wall Street banks, including J.P. Morgan Chase, Citigroup, Merrill Lynch and Credit Suisse First Boston, as well as two law firms were added to the class-action lawsuit against Enron Corp., which accuses the firms of helping the energy trader defraud shareholders and creditors.

The University of California, the lead plaintiff in the Enron shareholders' class-action lawsuit, filed an amended complaint in federal court. In addition to the already mentioned banks, the university named Canadian Imperial Bank of Commerce (CIBC), Bank of America, Barclays Bank, Deutsche Bank and Lehman Brothers. The complaint alleges that the banks helped set up many of Enron's off- the-book partnerships and used offshore companies to disguise loans to Enron. Details