KNOXVILLE, Tenn. — Goody’s Family Clothing Inc. reported Tuesday that Robert M. Goodfriend has been removed as chairman and chief executive officer and placed on indefinite leave of absence.
The move was made immediately after Goodfriend told the board of directors Tuesday morning he was dissatisfied with the retailer’s status as a public company.
Hours later, a spokeswomen said the board interpreted Goodfriend’s statement as a possible prelude to an offer to take the 157-store chain private. Goodfriend, who owns 63 percent of Goody’s stock, did not elaborate on his statement.
Goodfriend, whose father founded the company 41 years ago, will remain on leave of absence but still hold his board seat until a newly formed special committee of the board of directors determines how serious Goodfriend’s purchase overtures are.
In the meantime, John H. Weitnauer, one of three nonmanagement directors, will serve as chairman. Roger L. Jenkins will continue to serve as president and chief operating officer, the board noted.
The spokeswoman said Tuesday’s move was totally unrelated to an accounting scandal that broke last November. The retailer said at the time that Goodfriend purchased from Goody’s a stake in a separate company in March 1992 for $6.6 million. Goody’s, however, failed to cash Goodfriend’s check until the eve of a yearend audit.
Goody’s said it loaned Goodfriend the money for the purchase and then repaid the loan several months later without the knowledge of the board. A Goodfriend check to reimburse the company for the loan was uncashed for about six months but carried on corporate books as cash.
Eventually, the check was deposited and Goodfriend paid an additional $447,000 in interest.
— Fairchild News Service