Saturday, August 13, 2005
Collins & Aikman Corp., the large auto-supplier that filed for bankruptcy protection earlier this year, disclosed that it has received a grand jury subpoena and has been providing documents to the SEC. The company's press release (here) states:
Collins & Aikman Corporation (CKCRQ) announced today that it has received a grand jury subpoena from the United States Attorney’s Office in the Southern District of New York, seeking documents and information relating to the Company’s financial statements for the fiscal years 2000-2005, as well as documents and information pertaining to accounts receivable, customer and/or supplier rebates and other matters. The Company intends to fully cooperate in responding to this request, as it has for similar information requests from the Securities and Exchange Commission. As previously announced, an independent committee of its board of directors initiated and has been conducting an investigation of these issues.
C&A has annual sales in the $4 billion range, so a subpoena for five years worth of financial records will like result in more than a few truckloads of documents.
C&A's former CEO immediately before the bankruptcy filing was David Stockman, former Reagan White House OMB wunderkind (I've always wanted to use that term) whose private equity firm, Heartland Industrial Partners, took a controlling stake in the company a few years ago. Given Stockman's high profile and well-known financial acumen, it will be interesting to see if prosecutors from the Southern District focus on him as they investigate the company's accounting. (ph)