How's PwC doing?
I was traveling yesterday so I bumped this Open Item asking "Is PwC facing an existential threat?" to the front page to help keep things interesting. And, yes, there's been quite a bit of talk about PwC facing three civil trials, most notably the the Taylor Bean & Whitaker case entering its third week. The three cases — the bankruptcy trustee of Colonial Bank and MF Global are the other two — seek $7.5 billion in damages, an amount that threatens the firm's very existence according to an analysis by Jim Peterson:
The Florida trial could be damaging for PwC, said Jim Peterson, a former Arthur Andersen partner who has written a book questioning the ability of the Big Four to withstand a big shock like a litigation judgment or a law-enforcement sanction.
He estimates that damages of $2bn to $3bn could be “a tipping point” for PwC, prompting partners to scatter rather than give up current and future earnings.
“To serve global clients, you’ve got to be viable,” he said. “PwC is in a case for its life.”
It's probably worth noting that if PwC does lose the case in Florida, the firm will only have to post $50 million bond, per state statute. Yes, that was enough to take down Gawker, but I reckon PwC can cough that up to live through the appeals process.
However! Facing an additional $2 billion in claims is not something to take lightly and you get the sense that PwC knows the seriousness of the situation. I mean, why else would you hire an attorney with a "Bet-the-Company" litigation award?
Has Donald Trump released his tax returns?
Nope! But lots of his supporters think he should, including South Carolina Representative Mark Sanford. But perhaps more importantly, a Washington Post-ABC News poll found that 41% of Republican registered voters and 60% of independent voters think he should release them.
Programming note
I'm in San Francisco for Xerocon, so the newsletter will be on Pacific Time this week. And if you're near Pier 27 and want to say hello or get a beer, shoot me an email.
Previously, on Going Concern…
The EY compensation thread got rolling.
In other news:
- Tax-exempt state fair tickets
- What Apple CEO Tim Cook Really Thinks About Corporate Taxes
- Blockchain and bitcoin companies raised $290 million in the last 6 months
- This Supercomputer Will Try to Find Intelligence on Reddit
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