Opting Out, Or How To Try and Wring Blood From a Stone

Over at the WSJ Law Blog today, Peter Lattman has a post here on the recent spate of announcements by institutional investors that they were opting out of the recently settled securities class action against Qwest.

A press release from the New York State Comptroller Alan G. Hevesi regarding the individual case brought by the New York State Common Retirement Fund (NYSCRF) can be found here. NYSCRF is represented in the Qwest litigation by Lieff, Cabraser, Heimann & Bernstein, LLP.

Of interest (at least to me) - the decision to name Qwest's former outside auditor, Arthur Andersen LLP, as a defendant.

Andersen, of course, was famously convicted of obstruction of justice in 2002 in charges stemming from document preservation issues regarding the auditor's Enron files. That conviction was overturned by a unanimous Supreme Court in 2005.

Following the conviction in 2002, Anderson for all intents and purposes wound down business and while it still exists, press reports indicate that only 200 of Andersen's 28,000 employees remain with the firm.

Indeed, in this release from Comptroller Hevesi regarding Andersen's 2005 settlement in the WorldCom litigation:

The settlement follows intense scrutiny of Andersen's financial status. Anderson only agreed to show us its financial condition after we had finished presenting our case. The $65 million represents a substantial amount of Andersen's remaining assets.

Thus, Andersen:

1. Is essentially out of business.
2. Has little to no assets remaining.
3. Likely has little or no income at this point.
4. Potentially has burned through any insurance policies it carried that covered the relevant period.
   

The logical question - Why name Andersen as a defendant?

Readers, please send in your thoughts.