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Spiegel Taps Geralynn Madonna

NEW YORK — The Spiegel Group Inc. on Friday named Geralynn Madonna president and chief executive officer of its Spiegel Catalog and Newport News direct-marketing units.<br><br>Previously, Madonna held the position of president and chief operating...

NEW YORK — The Spiegel Group Inc. on Friday named Geralynn Madonna president and chief executive officer of its Spiegel Catalog and Newport News direct-marketing units.

Previously, Madonna held the position of president and chief operating officer of Newport News. She succeeds Melissa Payner, former president and ceo of Spiegel Catalog, and George Ittner, former chairman and ceo of Newport News.

The embattled Downers Grove Ill.-based direct marketer and retailer said Payner and Ittner resigned from the company to pursue other interests, but Ittner has agreed to provide consulting services to the company.

Madonna has been with Spiegel for more than 21 years. In her most recent position at Newport News, she oversaw all company-wide operations, including merchandising, financial management, product design and development.

The appointment is just the latest in a string of events at Spiegel, all taking place in a crisis atmosphere. As reported, Spiegel in the last month appointed William Kosturos, managing director at the turnaround firm Alvarez & Marsal, as chief restructuring officer and interim ceo. In the latter post, he succeeded Martin Zaepfel at the firm, which is controlled by German catalog giant Otto Versand GmbH.

Just last week, failure to meet certain financial criteria triggered an early amortization event, which will force Spiegel to divert funds to investors, rather than use them to fund operations. On March 7, Spiegel entered into a consent decree with the Securities and Exchange Commission that, among other conditions, requires the appointment of an independent auditor to review the firm’s financial records going back to the start of 2000.

The SEC sued Spiegel in a Chicago federal district court for failure to disclose information it received from its independent auditor over Spiegel’s ability to continue as a “going concern.”

Spiegel, the SEC said, chose to “conceal” the “going concern” issue by filing notices of late filings for its annual and quarterly reports on the grounds that various lending agreements were not in place.

While the consent agreement partially resolved some of the SEC’s allegations, it also mandated that Spiegel, which alleges it is “cooperating fully” with the investigation, agree to the appointment of an examiner to review Spiegel’s financial records and provide a report within 120 days on Spiegel’s financial condition and identify any material accounting irregularities.