A jury last week found in favor of former Enterprise Rent-a-Car controller Thomas P. Dunn. As CFO.com reported earlier in the week, Dunn had sued Enterprise for wrongfully terminating him in 2001.
In a 9-3 verdict, the jury awarded Dunn $4 million in damages late last Friday. Dunn’s suit charged that Enterprise dismissed him for objecting to certain business practices. Enterprise, denying the charges, claimed that Dunn was fired based on performance.
Winning the suit seemed like a long shot for Dunn, particularly after Judge Jack Koehr threw out his claims that he refused to sign off on improper accounting related to Enterprise’s planned public offering. Under Missouri law, it’s illegal to fire someone for refusal to go along with illegal acts.
But Judge Koehr threw out Dunn’s claim under this clause, reasoning that since the offering was nixed and nothing was filed with the Securities and Exchange Commission, the statute didn’t apply.
Dunn did pursue the claim that he tried to blow the whistle on certain business practices — surcharges on rental cars, disproportionate licensing of rental cars in lower-tax states, and collection of sales taxes on leased cars.
But during the trial, Enterprise trotted out a number of former employees who testified that Dunn was a brute as manager. In the end, however, no substantial evidence pointed to his behavior during the last year of his employment at Enterprise — the crucial period after which Dunn claimed management ambushed him with his dismissal.
Though Dunn’s team disagrees with Koehr’s action in throwing out Dunn’s claim on improper accounting, it is satisfied with the verdict overall.
Matt Ghio, of Van Amburg, Chackes, Carlson & Spritzer LLP, the firm representing Dunn, says the case has important implications for private-company whistle blowers. He says finance executives at public companies who stand up to management on improper accounting now have Sarbanes-Oxley to protect them.
“This case addresses the question of what protection is there for executives at private companies,” he says. Dunn pursued his case under Missouri law, says Ghio, but most states have very similar provisions to protect whistleblowers.
Florida Bill Aims to Change Homestead Statute
Former WorldCom CFO Scott Sullivan was hit with new bank fraud charges on Wednesday.
In addition to his previous accounting-fraud charges, he’s now accused of lying on financial statements to secure $4.5 billion in credit for the company. Sullivan allegedly falsified financial statements to get loans in 2001 from Bank of America, Chase Manhattan Bank, Citibank and other lending banks.
According to the Associated Press, the new charges add another 120 years to his potential sentence.
Meanwhile, Sullivan received bad news on another front yesterday. As you may know, the ex-WorldCom CFO is in the middle of building a new home, valued at $22.5 million, in a tony section of Boca Raton, reports the Palm Beach Post. He even used the house as security for his $10 million bail bond.
Unfortunately for Sullivan, the house is still under construction. Why unfortunate? Because if he was already living there, he might qualify for an exemption from a proposed new law rescinding Florida’s homestead statute.
The homestead statute protects a homeowner from some real-estate taxes, caps the amount of annual reassessments, and offers protection from third-party creditors and — here’s the punch — the Federal government. The only catch: to qualify for the protection, a house must be a owner’s principle residence.
The legislation, HB 39, makes it a felony to claim homestead exemption on a house costing more than $200,000 if it was purchased with illegally obtained money. The bill was passed unanimously in a state legislative subcommittee in Tallahassee on Tuesday, according to the Post.
Rep. Roger Wishner, the Democrat who sponsored the bill, makes no bones about targeting corrupt executives who have used their mansions as a shelter from the elements — and government authorities.
Wishner told the Post: “We need to send a message to corporate America that if you steal and get away with it, and want to live lavishly on the dollars you stole, don’t come to Florida.”
Now there’s a tourism campaign.
CFO/Whiz Kid Tabbed for Hall of Fame
Retired Ford Motor Co. CFO Edward Lundy was among the seven inductees for 2003 to the Automotive Hall of Fame. The inductees were announced at the New York International Auto Show on Wednesday.
Lundy, 88, was one of 10 new executives recruited as a team by Henry Ford II when he assumed the Ford presidency in 1945. Dubbed the “Whiz Kids” by the press, the former Air Force intelligence officers brought quantitative analysis, financial discipline, and modern management to the company in the post-War era.
In case you’re wondering, the other 2003 Automobile Hall-of-Famers are Andy Granatelli, Max Hoffman, Alec Issigonis, Henry Joy, Harry Miller, and Louis Renault. The honorees will be inducted in October.