Andersen in Alan Bond payout

THIRTEEN years after the spectacular collapse of Alan Bond's business empire, the liquidators of his main company, Bond Corporation, have finally settled with its auditor, Andersen.

Andersen has agreed to an out-of-court payment, believed to be about A$120m (£45m), to settle a legal action stemming from its 1988 audit of Bond Corp.

The liquidators had claimed A$1bn from Andersen, claiming that the 1988 audit was negligent and incompetent. The initial statement of claim was for A$300m but interest on that amount since the case was launched in the mid-1990s brought the claim figure up to A$1bn.

The case, which was expected to last two years, was settled today five months into the trial. Bond's 1988 accounts were audited by Perth-based Andersen partner Terry Underwood, who has left the company and could not be traced to give evidence. Bond Corp collapsed in 1989, owing billions of dollars.

The settlement, which could prove to be Australia's biggest audit litigation payout, clears the way for the Australian merger of Andersen with big-five rival Ernst & Young, which is expected to take place by the month end.