Friedman’s Inc. Board of Directors made several announcements on Monday regarding the management of the Savannah-based specialty retailer.
As announced on May 5, five new directors were elected to the company’s board of directors by the holder of Class B Common Stock: Peggy J. Brockschmidt, Allan M. Edwards, Thaddeus S. Jaroszewicz, Joseph D. McSweeney, and Alan L. Stanzler. Two days later, Stanzler and McSweeney resigned from the board. No other changes have been made to the composition or structure of the Board.
Friedman’s Inc. Board of Directors is currently set at eight members, with five seats filled by Brockschmidt, Cruickshank, Edwards, Jaroszewicz, and Parshall. The board is searching for additional directors, including directors necessary to satisfy New York Stock Exchange rules relating to the independence and experience of the members of the Audit Committee.
The board is also continuing its search for a permanent CEO, and has initiated a search for a new CFO through an executive search consulting firm. In the interim, the company plans to engage the services of an outside consultant to assist in the duties formerly conducted by the CFO. Douglas D. Anderson will continue to serve as the president and chief operating officer.
On May 5, the board removed John E. Cay as company director. A few hours later Richard Cartoon, Friedman’s CFO who was hired in December to replace Victor M. Suglia, turned in his resignation. Suglia was placed on leave of absence in November by the board when the company announced that it was under investigation by the U.S. Justice Department and the Securities and Exchange Commission. The investigations were the result of a lawsuit filed by receivables factoring company Capital Factors for alleged misrepresentation of the accounts receivable of Cosmopolitan Gem Corp., a Bangkok jewelry maker and a former vendor of Friedman’s.
The board confirmed that the company will continue to cooperate with the federal investigations.
The board also expressed continued support for the completion of its internal audit and restatement of the company’s financial statements at the earliest possible date. And it expressed continued support for the work of Ernst & Young LLP as the Company’s independent auditors.
The backgrounds of the new board members are as follows:
Brockschmidt currently serves as a director of Crescent Jewelers Inc., an affiliate of Friedman’s, and also serves as a consultant to Crescent on operational issues. From 1998 through 2004, she served as a project manager for Flight-Ware LTD., a software development company, assisting with the testing and implementation of certain sales and reporting systems, financial statement preparation and long- term financial planning. From 2000 to 2003, she served as a consultant to Morgan Schiff & Co., Inc., an investment bank affiliated with the Friedman’s control stockholder, where her duties included serving as the CFO of RTHPort, Inc., an internet jewelry company and also analyzing proposed acquisitions as well as the operations of existing portfolio companies.
Edwards is currently president of Morgan Schiff & Co., Inc., a position he has held since 1985. He also currently serves as a director and member of the Compensation Committee of Albermarle & Bond Holdings PLC and as a City Commissioner on the Board of Investments for the City of Providence, R.I. He is a registered broker-dealer.
Jaroszewicz is currently the CEO of Tab Products, which sells records management services, products, and equipment, a position he has held since 2002. He also serves as CEO of Workstream Inc., which manufactures and sells mailroom and office furniture and fixtures, a position he has held since 1991. Tab Products and Workstream, Inc. are affiliates of Friedman’s controlling stockholder.
Friedman’s Inc. currently operates 711 stores in 20 states, of which 224 were located in power strip centers and 487 were located in regional malls.