> -> Snipped From
> TRUSERV VALUES SILENCE IN ACCOUNTING ERRORS CASE
> Susan Chandler
> December 2, 2000
December 2000? It's taking a while for some of these IT problems to
escape from the cone of silence.
Quote:> True Value Hardware Store owners have been waiting for months for an answer to
> an important question. How did their buying cooperative--Chicago-based TruServ
> Corp.--make more than $100 million of accounting errors without anyone
Accounting errors? Who would have expected accounting errors happening
without anyone noticing? ...as in, "Where did our money go?" Why does
it take months to resolve? Aren't these kinds of problems quickly
> The errors, which were uncovered by a new TruServ chief financial officer in
> January, wiped out the 1999 "patronage dividends" that hardware store owners
> normally receive each year for buying their merchandise from TruServ.
-gasp- They risk angering guys with chain saws.
> Obviously, True Value owners weren't happy that their dividend evaporated, but
> TruServ created a task force to investigate and promised a full accounting of
> the fiasco.
> The task force completed its work this summer and made a report to TruServ's
> board of directors in late August. Yet TruServ says it can't release the report
> to members because it is being sued over the accounting glitch in Delaware
> Chancery Court.
> In a September memo to members, TruServ Chairman Bill Blagg acknowledged that
> "members are anxious to hear the results of the task force's efforts." But he
> said TruServ's legal counsel has advised the co-op to keep the report to
> itself. "Nor can we comment on the contents of the report at all," Blagg wrote.
> The lawsuit, which seeks class-action status, accuses TruServ's executives and
> directors of a number of misdeeds, including misrepresenting the true state of
> the co-op's finances, not adequately supervising the accounting process and
> wrongly withholding the 1999 patronage dividend. Its further charges TruServ's
> officers and directors with failing to exercise their fiduciary
OK, this is Doc's cue to point out how this *isn't* obviously a sort key
or date computation error. Just because 1999 transactions disappeared
exactly as expected by the Y2K doomers (especially Jo Anne), heck, don't
let that spoil the polly-festival.
After all, Y2K was about riots, train crashes, muties looting and not
about back room batch systems that lose transactions, accounting errors,
1Q, 2Q, 3Q reports.
The pollies focus on the fun part of Y2K, how quality 7.62
semi-automatic battle rifles with high capacity box magazines proved to
be unnecessary but they aren't too interested in accounting errors,
incorrect invoices, payments, receivables, batch runs.
I can't blame them. I can hardly stand to read about attorneys, co-ops,
patronage dividends, fiduciary responsibilities, accounting errors but
if someone starts yapping, "You doomers were wrong about your
Springfield Armory M1As, blah, blah." that's some fine USENET arguing.
Quote:> The suit's plaintiff is Hudson City Properties Inc., a TruServ shareholder in
> Hudson, N.Y. Hudson has terminated its membership in TruServ but it has not
> been allowed to redeem its shares because of a moratorium established by the
> co-op's management in March. Hudson's attorneys did not return phone calls.
> Following its attorneys' advice, TruServ declined to comment on the suit or its
> allegations, except to say it will defend itself "vigorously."
> The ironic thing is the task force report will undoubtedly be one of the first
> documents requested by the plaintiff's attorneys when they get to the discovery
> phase of a trial.
> That may mean that TruServ's loyal members will have to read the court
> transcripts if they want to know what went wrong at the company they own.
Of course, the economy continues to unravel as expected but that's
duller than dull. How much better to be a polly and focus on the fun
stuff. No World War III, no asteroid hit, no looted grocery stores.
All we got was PSI-net falling from $60 to a buck twenty a share, a
whole bunch of accounting errors, and some vague economic consequences
that no one could have predicted.
cory hamasaki - no one could have predicted accounting errors taking
months to recognize, no one.