Andersen Settles With Department 56

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EDEN PRAIRIE, Minn. (AP) -- Arthur Andersen has paid $11 million to Department 56 Inc. to settle a lawsuit alleging that the consulting firm botched a computer systems project for the manufacturer of collectibles.

"We're very satisfied with the settlement," David Weiser, Department 56 senior vice president for legal affairs and human resources, said Tuesday. "It puts closure to the litigation and allows us to move forward with our business."

Eden Prairie, Minn.-based Department 56 had asked for $6 billion in its original complaint filed last year because it could not have increased the damage claim once the lawsuit was filed, Weiser said.

Department 56 had alleged it incurred substantial losses and customers and dealers became angry because Arthur Andersen gave the company bad advice as it tried to upgrade its computer systems.

A nonpayment lawsuit filed against Department 56 by Arthur Andersen was dismissed as part of the settlement, Weiser said.

A consolidated shareholder lawsuit is still pending against the company. It claims that Department 56 didn't reveal the full extent of its financial woes to investors until after the lawsuit against Arthur Andersen had been filed. Weiser said the shareholder lawsuit is "without merit."

Department 56 received the settlement payment from Arthur Andersen on March 1, according to a document filed late Monday with the U.S. Securities and Exchange Commission.

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