BAGEL CHAIN'S STOCK DIVES 34%.Byline: Gregory J. Wilcox Daily News Staff Writer Stock in the nation's second-largest bagel chain tumbled 34 percent Friday after the company said that it has uncovered financial improprieties at its North Hills-based unit. Jack Grumet, chairman and chief executive officer of Eatontown, N.J.-based Manhattan Bagel Co. Inc., said that the problems at its 17-store I&J West Coast subsidiary included improperly recorded franchise fees, payments made for purported public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most work, real-estate finders fees, bonus and vacation pay and inflated receivables and inventory. Six of the stores are in the San Fernando Valley San Fernando Valley Valley, southern California, U.S. Northwest of central Los Angeles, the valley is bounded by the San Gabriel, Santa Susana, and Santa Monica mountains and the Simi Hills. . The stores are called I & Joy Manhattan Bagel. Manhattan Bagel's stock plunged 7 -1/2 to 13 -3/4 on Friday. Volume totaled more than 6.8 million shares, 67 times its three-month daily average of 106,600 shares. Shares traded for a record high of 29 -1/2 on Monday. The discovery of the accounting irregularities will force Manhattan Bagel to restate first-quarter net income, dropping it to 9 cents a share from 12 cents a share. Sales will be reduced to $8.11 million from $8.19 million. The accounting irregularities account for about $350,000 and occurred during the last quarter of 1995 and the first quarter of this year, the company said, and were discovered by new managers hired to run the unit. Manhattan Bagel acquired I&J about a year ago in a deal valued at between $16 million to $18 million. The subsidiary's two former top executives, Allan Boren and Eric Cano, resigned after becoming entangled en·tan·gle tr.v. en·tan·gled, en·tan·gling, en·tan·gles 1. To twist together or entwine into a confusing mass; snarl. 2. To complicate; confuse. 3. To involve in or as if in a tangle. in legal problems associated with another business they owned and reports of gambling debts totaling $80,000 surfaced. Boren bought I&J in 1992 and resigned as vice chairman in December. Cano, the president, left in March. Grumet said that Manhattan Bagel has hired an independent counsel to investigate. He declined to say which I&J employees were the target of the probe. Asked why the irregularities were not discovered while Boren and Cano were still with the company Grumet said: ``When your key employees out there know about it and want to make sure you don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. about it, they can make sure you don't know about it.'' Alvin Segel, Boren's attorney, said that I&J's financial problems arose after his client left the company. ``To the extent that there were any improprieties they were certainly not his,'' Segel said. Cano's attorney could not be reached for comment. Boren and Cano also face 24 criminal counts claiming that they improperly dumped toxic chemicals Any chemical which, through its chemical action on life processes, can cause death, temporary incapacitation, or permanent harm to humans or animals. This includes all such chemicals, regardless of their origin or of their method of production, and regardless of whether they are produced , including cyanide cyanide (sī`ənīd'), chemical compound containing the cyano group, -CN. Cyanides are salts or esters of hydrogen cyanide (hydrocyanic acid, HCN) formed by replacing the hydrogen with a metal (e.g., sodium or potassium) or a radical (e.g. , at a Chatsworth metal plating Noun 1. metal plating - a thin coating of metal deposited on a surface plating coating, coat - a thin layer covering something; "a second coat of paint" gold plate - a thin plating of gold on something firm they formerly ran, said deputy Los Angeles City Attorney The Los Angeles City Attorney is an elected official whose job is to prosecute all of the misdemeanor criminal offenses within the city of Los Angeles, California, United States. Vince Sato. He said that both men have since moved out of the area with the court's permission and that he does not expect a preliminary hearing in that case until later this summer. Manhattan Bagel has been on a rapid growth curve, expanding from four stores in 1991 to about 220 today. They are spread over 15 states. California's operations account for about 75 percent of Manhattan Bagel's earnings in 1995. Investors fretted Friday about the drop in stock value and some questioned the company's due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. procedure in evaluating the I&J acquisition. ``Someone didn't do a very good job of digging,'' said Paul Brahe, an analyst at Apodaca-Johnson Capital Management in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , which holds 193,200 shares. But analyst Matt Patsky at Adams, Harkness & Hill in Boston said that the company has taken the proper steps, which should put the issue behind it. ``I think they have contained the problem and are taking corrective action A corrective action is a change implemented to address a weakness identified in a management system. Normally corrective actions are instigated in response to a customer complaint, abnormal levels if internal nonconformity, nonconformities identified during an internal audit or ,'' he said. ``The opportunity in front of Manhattan Bagel is huge. They are an excellent company and well run.'' CAPTION(S): Chart Chart: Manhattan Bagel company Closed 13 3/4, down 7 1/2 Da ily News |
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