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KPMG reaches settlement in audit dispute

KPMG LLP, a provider of audit, tax and advisory services, became the auditor for Miller Energy Resources, Inc. one year after Miller acquired oil and gas reserves and fixed assets in Alaska from a bankrupt entity. Plaintiffs then made claims against Miller regarding its valuation of the assets it acquired. After purchasing the assets out of bankruptcy, Miller estimated the fair value of the assets at $480 million and recorded a net bargain purchase of approximately $275 million in its 2010 financial statements.

Plaintiffs alleged that this valuation overstated the fair value of the Alaska Assets by hundreds of millions of dollars. KPMG became Miller’s auditor in 2011, the year after the acquisition. Relatedly, the plaintiffs alleged that KPMG’s audits were not in compliance with applicable auditing standards and that KPMG fraudulently made material misrepresentations in relation to the sale or purchase of securities. Plaintiffs also asserted a series of strict liability and negligence claims against KPMG.

Waller represented KPMG in the case and reached a settlement at mediation of $35 million.

For more information, see media coverage [here](here and [here](here.


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