Wednesday, October 04, 2006

More trouble at Penn Traffic

I commented a week or so ago about Deloitte & Touche resigning as auditors for Penn Traffic. The company has failed to issue any financial reports for about a year and a half, and I concluded that, "You gotta wonder what's in those reports."

There's more reason to wonder now. Yesterday , the CEO quit very suddenly.
The company didn't say why Chapman decided to retire. Chapman could not be reached for comment.
Not a good sign, especially when combined with the collection of bad news packed in this paragraph:
Penn Traffic's biggest investors, the private equity firms that invested in the company, are firing salvos. The company has not released any financial statements since it reorganized in 2005. Its reasons include ongoing internal and external audits and investigations by the Justice Department and the Securities and Exchange Commission over promotional allowance practices.


Anonymous said...

It couldn't have been a very sudden retirement considering the company already had 2 people to takeover the position.

Bob Houk said...

You may very well be right. I was going by the news article, which referred to his departure as "sudden" twice. Here's one: "Chapman's sudden and full departure from Penn Traffic, he also resigned from the board of directors, caught others off guard."

It also seems that when a CEO's departure is expected there is usually a successor named in advance. No prior announcement makes splitting the job look like a quick fix.

But I could be wrong.