2 Shareholders’ Suits Filed Against Sirena
Two shareholders’ suits were filed Thursday against Sirena Apparel Group Inc. accusing the El Monte company of filing false financial statements for the first three quarters of fiscal 1999.
Sirena said Monday that it had fired its chief executive and its chief financial officer “following the discovery of accounting irregularities” and would restate its financial results for the first three quarters of the fiscal year ending June 30.
Maurice “Corky” Newman, who held the titles of chairman of the board, chief executive and director; and Richard Gerhardt, Sirena’s chief financial officer, were also named in at least one of the suits. Both suits were filed in U.S. District Court in Los Angeles.
In its announcement Monday, Sirena said it has appointed a special committee of the board of directors, headed by lawyer and former Coopers & Lybrand partner William J. Welsh, to reexamine the company’s financial results with auditors Ernst & Young.
Sirena said its restated financial reports will include a charge from the write-down of inventory and the write-off of some deferred expenses, as well as about $700,000 related to the bankruptcy filing of retailer Loehmann’s Inc.
The company’s stock on Monday fell to a 52-week low of $2, a 19% loss, before Nasdaq halted trading. Trading has not resumed.
A designer and manufacturer of top-name and private-label swimwear, intimate apparel and casual clothes for such brands as Anne Klein, Liz Claiborne and Hang Ten, Sirena has worked to boost its cadre of licenses and its profile, touting an online store in connection with Yahoo Shopping as well as each new brand name or product line.
Neither Newman nor Gerhardt could not be reached for comment.
Before taking the helm at Sirena, Newman, a veteran of the Los Angeles apparel scene, served as president of CaliforniaMart, where he presided over the facility’s $20-million remodeling effort and a growth period in which the ailing mart’s tenant base grew by 16%.
Before leading CaliforniaMart in 1994, Newman had held executive positions at Cole of California, Calvin Klein Industries and Cherokee Group. He also had served as Sirena’s executive vice president before leaving in 1977.
