Monday, January 07, 2008

Was Overstock President's Resignation Backdated?


Say, didn't that fellow quit the day before?

More weird tidings from my favorite corporate train wreck, the ever-slippery Overstock.com.

Seems that documents filed with the SEC raise a troubling question: Was the company president's resignation backdated? The company says he quit on Dec. 31, and produced a "resignation letter" with that date. But the company's own SEC filings provide evidence that he hadn't quit as of Jan. 1.

Indeed, I get the impression, from reading through all the documentation, that Lindsey didn't quit until the day of the announcement, Jan. 2.

Sam Antar's blog has all the details. Jason Lindsey showed up on a significant SEC filing--a revolving line of credit note -- that was signed by Overstock's CFO, David K. Chidester, that was date Jan. 1.

If Lindsey had left Dec. 31. Chidester (right) presumably would have known that, even in a joke of a company like Overstock. Remember that this is not some routine piece of paper, and that Lindsey was not mentioned in passing. He is listed as one of three executives authorized to request cash payments under that note. That is a crucial provision of that very important document.

Sam also notes that Overstock's SEC filings are inconsistent on when the amendment to the credit agreement was signed.

The the 8-K filing says it was Dec. 31, even though the amendment itself says Jan. 1.

Sam observes:
The key question is who lied: Jason C. Lindsey, Patrick Byrne, David K. Chidester, Overstock.com's disclosures, or the company's documents? For at least one of those persons, disclosures, or documents to be truthful, the others need to be lies.
Byrne's message board posting, at 8:41 p.m. Utah time on Dec. 31 -- a few hours after Lindsey supposedly resigned -- provides further evidence that Lindsey didn't quit on New Year's Eve. Not only does the post fail to disclose that the company's No. 2 had resigned -- with Byrne taking on his duties -- but talks about Byrne's "calender clearing up a bit."

That forward-looking statement (to use SEC jargon) is either false and misleading-- or Lindsey was still on the payroll.

Still more lies and inconsistencies for the SEC to sort out, in its continuing investigation of Overstock.com.

© 2007 Gary Weiss. All rights reserved.

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Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

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