De Lorean deal nets pounds 3m for taxpayer

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The Independent Online
The taxpayer is to get back just pounds 3m after the Government yesterday settled its 12-year battle to extract damages from the auditors of the failed Belfast car company, De Lorean.

The two sides yesterday agreed to settle their long legal tussle outside court with Arthur Andersen, the international firm of accountants agreeing to pay the Government pounds 18m compared with its claim of pounds 300m. However, the Government's legal costs since the case began in 1985 are estimated to have reached pounds 15m.

It will have to shoulder these itself, having decided to continue action against Arthur Andersen in the US courts after a New York judge threw out its lawsuit alleging conspiracy, fraud and negligence in February.

The Government's case was that Arthur Andersen failed to alert it to frauds taking place at De Lorean and the parlous state of its finances. The company set up by John De Lorean in West Belfast to build his gull- winged sports car collapsed in 1982 after soaking up pounds 77m of taxpayers' money.

Arthur Andersen's defence was that the Government had been aware early on of the company's financial problems but had been determined to keep it open for political reasons.

The case had been due to begin in New York early next year. Arthur Andersen is still fighting a $100m claim brought in parallel by David Allard, the trustee in bankruptcy for the De Lorean company. A spokesman for Arthur Andersen said: "Since we have reached a sound, sensible and reasonable agreement with the Government perhaps there is scope for a similar agreement with the trustee."

Arthur Andersen has paid a heavy price in other ways. It has not had a government contract for 12 years.