Former Sunbeam CFO Russell A. Kersh is guilty only of a longtime association with an infamous CEO, says his attorney, Donald Zakarin. Kersh and former Sunbeam CEO “Chainsaw” Al Dunlap, who have worked together at various companies for more than 15 years, were charged in May by the Securities and Exchange Commission with perpetrating “a fraudulent scheme to create the illusion of a successful restructuring of Sunbeam and thus facilitate a sale of the company at an inflated price.”
“The SEC’s theories are baseless and nonsensical,” says Zakarin, attorney for both men. He claims the SEC is pursuing his clients because of Dunlap’s high profile. Although Kersh did not share Dunlap’s notoriety, says Zakarin, “they can’t go after Al unless they go after Russ. Russ was much more at the operational level on the finance side.”
Zakarin says Kersh is busy with consulting work and his ownership of Nascar truck-racing teams. “This [lawsuit] has obviously impinged upon his ability to go out and work,” Zakarin says. “While these proceedings are ongoing, that is a cloud that exists over his career.”
And what a cloud it is. The SEC alleges that $60 million of Sunbeam’s record-breaking $189 million in 1997 earnings from continuing operations were the result of accounting fraud.
The SEC says their turnaround tricks included the use of inappropriate accounting reserves, channel stuffing, recording revenue on contingent sales, booking future sales in the current quarter, and improper bill-and-hold transactions.
The SEC seeks to bar either man from acting as an officer or director of any public company.
Michael Newman, 44, is making a connection at consumer electronics retailer RadioShack Corp. The Fort Worthbased concern chose Newman to replace former CFO Dwain Hughes, who passed away in January. Newman had been VP and CFO of Intimate Brands Inc.
Finance must make Stephen Smith blush. The 41-year-old was named EVP and CFO at Elizabeth Arden Inc. Before joining the Miami- based maker of beauty products, Smith was with PricewaterhouseCoopers LLP.
HOME AWAY FROM HOME
Carol Tome thinks it’s good to be home. Tome, 44, became CFO of home-improvement retailer Home Depot Inc. She assumes duties left behind by Dennis Carey, who was promoted to EVP of business development, strategy, and corporate operations at the Atlanta-based company.
The new chief of roast beef is Francis McCarron, 44. The former SVP for taxes is now CFO of New Yorkbased Triarc Cos., franchiser of Arby’s fast-food restaurants. He replaces John Barnes, who retired in June.
Former Knight Ridder Inc. CFO Jean H. Mordo is no longer newsworthy. After just two months as CFO, Mordo, 56, has resigned. Succeeding Mordo at the San Jose, Calif.-based newspaper publisher is Gary Effren, VP and controller.