1996 Mr. Dunlap was hired from Sunbeam.
1996 Sunbeam’s fortunes initially seemed to improve under Mr. Dunlap with a huge write-off in 1996 as Sunbeam closing plants and laid off employees.
1997 profits soared.
1997 S.E.C. claimed “at least $62 million of Sunbeam’s reported $189 million in income for the year did not comply” with accounting rules. SEC Claims included:
millions of dollars in expenses in 1997 were wrongly charged to 1996, when the company had taken the write-off this created ”cookie jar” reserves, which could be used to create fake profits in 1997.
unreasonably reduced the value of its inventory so that it could record large profits when the goods were sold.
– some sales recorded were not real, through a variety of methods, and recorded other sales that came from ”channel stuffing,” putting inventory onto the books of distributors and retailers. [product destined for a retailer sent to a distributor who agreed, in return for a guaranteed profit, to hold the product until the retailer was ready to accept them AND sales were made by offering deep discounts to persuade customers to buy merchandise that they would not need for many months]. The S.E.C. said this should have been disclosed those discounts and that the sales should have been recorded in later quarters.
1998 Mr. Dunlap was fired from Sunbeam.
2011 Sunbeam went into bankruptcy reorganization.
Stock Prices
1997 – $12.50
1998 – $52.00
April 3 1998 – $34.63 (Sunbeam disclosed that it had lost money in the first quarter)
2001 – $0.073
Subsequently the resume of Mr Dunlap and his achievements have been subject to greater scrutiny with questions about how real the benefits were or whether this created long term value for his employers and for shareholders.