Andersen Has Shut Down Its Valley Office By SHELLY GARCIA Senior Reporter Arthur Andersen LLP’s Woodland Hills office has closed as a result of the firm’s conviction last month on charges of destroying evidence in the investigation of its client, Enron Corp. The closure follows several rounds of layoffs and client defections at the San Fernando Valley office of Andersen, which had been the smallest of the Big Five accounting firms. One of the office’s founding partners, Anthony E. Radaich, has moved to Ernst & Young’s Woodland Hills office as audit partner along with another partner, Bob Grimes, and about 14 former Andersen employees from its Valley technology practice. Two other partners, Gil Green and Todd Smith, have joined Deloitte & Touche and Scott Sachs has moved to Good Swartz Brown & Berns LLP. Radaich said the Andersen office had begun laying off workers in mid-May, beginning with six employees. “Then every two weeks until June 17, additional people were laid off,” Radaich said. Radaich in March had told the Business Journal that the Andersen Woodland Hills office employed 70 people, but corrected himself in a telephone interview on July 3, saying 61 workers had been “permanently assigned” to the Woodland Hills office. “My understanding is that most of these people have jobs,” he added. Calls to Andersen’s Woodland Hills office were answered by a recording announcing that the phone number was no longer in service. Andersen’s Woodland Hills office serviced about 100 clients as of March, most of them privately held companies. With the addition of the Andersen technology practice workers, Ernst & Young has picked up the accounts of MRV Communications Inc., Semtech Corp., Earl Scheib Inc., Affinity Group Holdings and Stamps.com Inc. and Qiagen, former Andersen clients that had been served out of the Valley location, which housed the firm’s technology practice. Ernst & Young offices in the Pacific Southwest have added about 120 Andersen workers, and 176 public company clients have defected to the company from Andersen nationwide, said Nicole M. Thomas, an Ernst & Young spokeswoman. An undisclosed number of private companies have come over to Ernst & Young as well, she said. Across Southern California, the employee additions have boosted the Ernst & Young media and entertainment practice as well as its technology group. In an interview in March, Radaich insisted he wanted to keep the company together. He said that for the most part, Andersen’s Woodland Hills clients had not been concerned about the charges against the firm because the problems were isolated to the company’s Houston office. With the company’s conviction in federal court in June, however, Andersen said it would stop auditing public companies by Aug. 31, effectively closing the door on Andersen. Securities and Exchange Commission rules bar a firm convicted of a felony from auditing publicly traded companies. Even before the verdict, however, more than 780 Andersen clients had bolted nationwide, and the accounting firm had announced plans to lay off about 7,000 workers. Sherman Oaks-based Worldwide Restaurant Concepts Inc., which operates Sizzler, was one of those that defected from Arthur Andersen several months ago. Next to Ernst & Young, KPMG Consulting was the largest recipient of Andersen’s losses, picking up more than 140 clients nationally.
