MILLFELD TRADING REPORTS INVESTIGATION
MILLFELD TRADING REPORTS INVESTIGATION LONG ISLAND, N.Y., Feb. 24 /PRNewswire/ -- Millfeld Trading Co. Inc.
(NASDAQ-NMS: SHOE) announced today that, as previously disclosed, in September 1991 the company made a voluntary disclosure to U.S. Customs that an internal audit of its imports, which covered the period since 1986, indicated that the company may have incorrectly calculated import duties owed to Customs. At that time, the company accrued a non- recurring charge of $1,627,300 and Barry Feldstein agreed to indemnify the company for all Customs duties owed as a result of that disclosure and any subsequent audit by Customs for that period. Feldstein also granted the company a security interest in the common stock of the company owned by him (which is subordinate to the security interest of the company's institutional lender) to secure his indemnification obligations to the company.
In connection with the previously announced continuing customs audit, the company has been advised that the U.S. Attorney's Office for the Southern District of New York is, along with U.S. Customs, conducting an investigation of the activities of certain former employees of the company. The company has agreed to cooperate with both the U.S. Attorney's Office and U.S. Customs. The company is unable to determine what the outcome of any such investigations will be; however, as previously announced, Customs may assert that additional significant import duties are payable by the company, which amounts, when coupled with interest and penalties, may exceed the company's ability to pay and Feldstein's ability to indemnify the company pursuant to his contractual obligation. Feldstein has been suspended as president and chief executive officer of the company pending the outcome of its internal investigation. Feldstein, Glenn Feldstein and Dale Whitney have resigned from the company's board of directors. In the interim, and in connection with the company's previously announced letter of intent contemplating a restructuring of its operation (the terms of which may be subject to modification), the company has appointed Neil Cole, president and chief executive officer of New Retail Concepts, Inc., a publicly traded company, as interim president and chief executive officer of the company. Cole has also agreed to act as a director of the company. -0- 2/24/92 /CONTACT: Michael Callahan of Millfeld Trading, 516-367-3711, or Debra Berliner of Mallory Factor, 212-242-0000, for Millfeld Trading/ (SHOE) CO: Millfeld Trading Co. Inc. ST: New York IN: SU:
KD-TS -- NY013 -- 1751 02/24/92 09:27 EST
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|Date:||Feb 24, 1992|
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