Cendant’s Chairman, 9 Others Are Out
Walter Forbes resigned Tuesday as chairman of Cendant Corp. along with nine members of the troubled company’s board of directors, less than a week after senior executives called for Forbes’ resignation because of accounting fraud at businesses he once led.
Forbes maintained he had no knowledge of the accounting irregularities at discount services provider CUC International Inc., which merged with hospitality company HFS Inc. last December to form Cendant.
“However, the people of Cendant and its shareholders have suffered in recent months as a result of fraudulent conduct and the uncertainty it has created,” Forbes said in a statement. “I now believe it is in the best interest of our shareholders and employees to resolve this uncertainty.”
The nine directors who resigned were all associated with CUC International. A 10th director, Audit Committee Chairman Frederick D. Green, said he would resign after completing the committee’s report on Cendant’s accounting troubles.
The remaining 18 members of the board unanimously elected President and CEO Henry R. Silverman as chairman.
Forbes, who will leave Cendant with a $35-million severance package, last week blamed Silverman for a letter signed by 44 senior executives calling for his resignation. He said Silverman had been trying to wrest control of the company from him since Stamford, Conn.-based CUC and Parsippany, N.J.-based HFS merged.
“We must do everything we can to put this episode behind us, to eliminate the cloud hanging over this company . . . ,” Silverman said Tuesday. “As others have noted, it has been difficult for Cendant to rebuild trust in our company while this uncertainty exists.”