Liberate Fires Operating Chief, Will Restate Results

Liberate Technologies Inc. fired Chief Operating Officer Donald M. Fitzpatrick on Friday, saying the termination resulted from an ongoing internal investigation into questionable accounting.

The San Carlos, Calif.-based company, which makes software for television set-top boxes, in November placed Fitzpatrick on leave after launching an inquiry into the “appropriateness and timing” of $10 million in revenue in the 15 months leading up to Aug 31.

Shares of the company fell 4 cents to $1.42 on Nasdaq.

Liberate said Chief Executive Mitchell E. Kertzman, who planned to scale back his responsibilities at the end of the month, would remain in his current role until the company restates its results.

Citing “the need to conduct a thorough investigation of the facts,” Liberate did not estimate when it would release the corrected results.

Company executives declined to comment further.

In November, Liberate said its internal audit committee began investigating a $1.84-million software licensing deal in October. But the probe turned up other questionable transactions that could cause the company to restate up to 10% of its revenue since mid-2001. It subsequently placed Fitzpatrick, who oversaw the company’s sales operations, on leave. Fitzpatrick could not be reached for comment.

Fitzpatrick, 45, headed the interactive services business in Europe for Oracle Corp. before he joined Liberate in 1999.