Skip to main content

Peeved Dabah fires back at Children's Place

10/12/2007

SECAUCUS, N.J. Ousted Children’s Place ceo, Ezrah Dabah isn’t going down without a fight. In a letter to acting chairman of the board Sally Frame Kasaks, the recently resigned chief executive criticized the company for stating that he was to blame for the departure of its auditor Deloitte & Touche.

In a recent press release, The Children’s Place said that prior to Dabah’s resignation on Sept. 24, Deloitte & Touche “had determined, in its professional judgment, that it was no longer willing to rely on his representations in connection with its audits.”

According to Dabah, the statement in the press release was misleading, Deloitte & Touche’s resignation had nothing to do with his integrity, and they relied on his representations for many years.

The former ceo also took aim at the company for suggesting his resignation was “at the request of the board,” as announced in a press release. Dabah said that his decision to resign was a mutual one between him and the company, and furthermore had nothing to do with the internal investigation into his alleged violations of the company’s code of conduct.

Dabah went on to defend himself in the letter, saying that he never violated securities laws, and that his actions had no effect on the company’s operating results.

“By issuing these press releases the responsible directors and their advisors have disparaged my good name and reputation and, unless the public record is corrected, including the inappropriate assault on my integrity, I intend to hold the company and those individual directors and advisors fully responsible,” said Dabah.

The Children’s Place announced on Sept. 26 that Dabah was resigning as ceo following an investigation that determined that he had violated the company's internal policies related to security trades, citing an instance where he did not properly report to the company in increase in his wife's ownership of shares as a result of a trust distribution. The company also said that on two occasions Dabah pledged shares of the company pursuant to a customary margin account during a “black-out period'' when prior approval of the company's board was required for such pledges. According to the company's board, these actions violated the company's code of business conduct. However, the board also concluded that no improper personal benefit was obtained nor did the violations have a material adverse affect on the company. Dabah is required to reimburse the company for its out-of-pocket costs in investigating the violations.

The company today posted sales for September of $217.8 million, an increase of 4% from $210.3 million last year. The company reported a 3% decrease in comparable-store sales for the month.

X
This ad will auto-close in 10 seconds