In the Region Marriott reverses its decision, drops...


May 04, 2002

In the Region

Marriott reverses its decision, drops Andersen as auditor

Hotel operator Marriott International Inc. dropped Arthur Andersen as its independent auditor yesterday, reversing an earlier decision to stick with the troubled accounting firm.

Bethesda-based Marriott is the latest company to defect from Andersen, which faces prosecution for its role in the Enron accounting scandal. Marriott said in its March proxy statement that it would keep Andersen, its auditor for 43 years. But as the accountant's problems grew in recent months, the hotel giant decided to hire Ernst & Young instead for 2002.

As of yesterday, Andersen had lost 320 of the 2,300 publicly traded companies whose books it audited last year, according to Auditor-Trak, which tracks the accounting industry for Atlanta-based Strafford Publications.

Lockheed plans no layoffs after losing Navy contract

Despite losing out on a share of the $2.9 billion Navy contract to build advanced warships, defense contractor Lockheed Martin says layoffs are not planned for workers at its Naval Electronics and Surveillance Systems plant in Moorestown, N.J.

"We don't see any near-term impact" on the number of jobs, Andrea Lawrence, a spokeswoman at Lockheed Martin, said yesterday.

The company has about 4,000 employees at the plant and 1,000 others in facilities nearby, and has plenty of other work on hand, the spokeswoman said.

On Monday, the Navy said it was giving the $2.9 billion contract to design the new DD-X series warships to a team led by Northrop Grumman and Raytheon Systems Co.


Madden sentenced to 41-month term in 2nd stock fraud case

Steve Madden, who built a $240 million empire designing chunky shoes for teen-agers, was sentenced yesterday to 41 months in prison for stock fraud and money-laundering.

The sentence imposed by U.S. District Judge John Gleeson in Brooklyn, N.Y., will run concurrently with a 41-month term Madden received last month in a related federal stock fraud case in Manhattan.

Madden, 45, pleaded guilty last year to two counts of securities fraud and money-laundering in the two cases. He was arrested in 2000 after an investigation of a scheme to manipulate 23 initial public stock offerings - including the 1993 IPO of his own company - underwritten by two now-defunct companies.

Sears plans more stores outside shopping malls

Sears, Roebuck & Co. plans to open a greater number of stores outside shopping malls as it benefits from shedding unprofitable businesses, Chief Executive Officer Alan Lacy said yesterday.

The largest U.S. department store chain is remodeling stores, plans a new clothing line and will open more stores as it boosts its profit, Lacy told the Executives' Club of Chicago.

Expansion in malls is limited because fewer are being built, and Sears' mall-based stores face competition from companies such as Wal-Mart and Home Depot, whose sites are often between shoppers' homes and malls, Lacy said.

Sales at Sears stores open at least a year fell in 10 of the past 11 months through March, and sales were expected to decline through the end of the year.

Adelphia owes $1.05 million to workers charging racism

Adelphia Communications Corp. has agreed to pay $1.05 million and undergo government monitoring to settle claims that a manager at its Miami office hung a noose on his door and otherwise discriminated against black employees, the U.S. Equal Employment Opportunity Commission said.

The cable television company will pay the money to six employees who said they were subjected to racial harassment and rebuffed when they complained to company managers.

This column was compiled from reports by Sun staff writers, the Associated Press and Bloomberg News.

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