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Bankruptcy

Apr. 28, 1999

Ernst & Young To Pay Big For Bad Bankruptcy Advice

The accounting firm of Ernst & Young has agreed to pay the Chapter 7 bankruptcy estate of Merry-Go-Round Enterprises Inc. $185 million to settle claims that the firm provided incompetent and fraudlent advice to the debtor while attempting to reorganize under Chapter 11. A $3.8 billion lawsuit was filed by the bankruptcy trustee after the case was converted to Chapter 7. The trustee accused the accounting firm of contributing to the failure of the business by using inexperienced staff and

        The accounting firm of Ernst & Young has agreed to pay the Chapter 7 bankruptcy estate of Merry-Go-Round Enterprises Inc. $185 million to settle claims that the firm provided incompetent and fraudlent advice to the debtor while attempting to reorganize under Chapter 11. A $3.8 billion lawsuit was filed by the bankruptcy trustee after the case was converted to Chapter 7. The trustee accused the accounting firm of contr...

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