Counsel for the defense retained Cornerstone Research in the criminal action filed in the Southern District of New York, against David A. Stockman, former CEO of Collins & Aikman Corporation (C&A), an automobile parts manufacturer.
Retained by Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer
Counsel for the defense retained Cornerstone Research in the criminal action filed in the Southern District of New York, against David A. Stockman, former CEO of Collins & Aikman Corporation (C&A), an automobile parts manufacturer. The federal prosecutors alleged that, in response to pressures on the automotive industry, Mr. Stockman and other former executives of C&A improperly accounted for rebate transactions with vendors and manipulated the company’s financial results in an effort to defraud C&A’s investors, banks, and creditors.
The U.S. attorney dropped the charges.
Cornerstone Research worked with Mr. Stockman’s attorneys and three experts. Timothy Lucas, former director of research and technical activities at the Financial Accounting Standards Board and former chairman of its Emerging Issues Task Force, addressed federal prosecutors’ accounting allegations. Professor Christopher James of the University of Florida addressed issues surrounding loan covenants. An expert in finance addressed the reasonableness of consideration paid for certain acquisitions and the materiality of accounting disclosures to investors.
The attorneys submitted an extensive white paper addressing the government’s allegations. After reviewing the white paper and meeting with attorneys for Mr. Stockman, the U.S. attorney dropped the charges, concluding that further prosecution of Mr. Stockman “would not be in the interests of justice.”