Settlement in one of the final HIH Insurance legal actions is being postponed by the demands of a former Arthur Andersen partner to be released from the threat of future legal action.

The demand has stalled the $500 million settlement claim for HIH’s disastrous acquisition of FAI Insurance.

With a deal already struck by other parties, including Goldman Sachs, reinsurance broker Guy Carpenter and two subsidiaries of Berkshire Hathaway, lawyers representing Arthur Andersen have requested an additional two weeks to find a solution.

Parties agreed in the NSW Supreme Court last year to settle with McGrathNicol partner Tony McGrath, the liquidator, for an undisclosed sum.

The unidentified partner’s reluctance to sign the agreement has been reinforced by separate legal advice.

The case has been adjourned until next Monday.