This international business case involves an inappropriate partnership formed between a senior executive of a large wholesale company and a retailer in Oregon. The Defendant in this case is the former CEO of a large fabric wholesaler who discovered that another senior executive had entered into undisclosed partnerships with a retail distributor. These partnership discounts were not reported, and were designed in a manner that deferred payment, creating the potential for a budget shortfall and jeopardizing the company’s finances. The defendant learned of this after the executive had been terminated and his replacement discovered the deferred accommodations owed to the retailer and brought it to Defendant’s attention. The SEC alleged the defendant should have taken a more proactive approach upon learning of the executive’s actions in advising the board and the financial department. The Defendant maintained that his budget was set and his employees had a duty to adhere to the restrictions of the budget.
Question(s) For Expert Witness
- 1. Please describe your experience working with retail partnership accommodations
- 2. Do you feel qualified to discuss professional standards for retail partnership accommodations?
Expert Witness Response E-013213
I am a seasoned executive with more than 35 years of experience leading and advising retail and consumer products companies. I have served as interim CEO, interim COO, and financial advisor for many well-known companies. I have hands-on experience in multiple specialty-wholesale categories, including apparel, home furnishings, and accessories, and I am comfortable working for management and sponsors to create plans and execute strategies. In addition to my turnaround management activities, I have provided strategic advisory, due diligence and expert witness consulting services to retailers, financial institutions, and consumer product companies including Ford Motor Company, Castle Harlan, Whippoorwill Associates, and AIG.
Expert Witness Response E-013178
Retail accommodations, discounts, kickbacks, in this industry are a main area of focus in my current accounting practice. I have worked with some of the nation’s largest apparel retailers throughout the years on very similar issues to the ones in this case and have a great deal of familiarity with the SEC issues at hand. Additionally, I know a great deal about this issue from the retailer side. I have some colleagues at a major retail chain, and other companies like it, so I have an understanding of the issues at hand from the wholesaler and the retailer perspective.