Sunbeam Corporation and Chainsaw Al
OTTAWA UNIVERSITY
FINANCE ADMINISTRATION
POST-CLASS ASSIGNMENT
MODULE 5
FAHRIAN C.H. CHOE
STUDENT ID: 128370
MELAKA # 03
DUE: JULY 5, 2004
FINAL CASE IN FINANCIAL DECISION MAKING
SUNBEAM CORPORATION AND CHAINSAW AL
Prepared For
Richard Brewington
Instructor
Ottawa University International
Prepared by
Fahrian C.H. Choe
Student
Ottawa University International
June 30th, 2004
CONTENTS
Page
Executive Summary……………………………………………………….i
Introduction………………………. ……………………………………...1 Dunlap’s Action Plan……………………………………………………..2 Accounting Practices Raise Questions…………………………………....4 Lawsuit …………………………………………………………………...5 Discussion………………………………………………………………...6 Conclusion ……………………………………………………………….9 Reference ………………………………………………………………..10
Executive Summary
This report is based on Sunbeam Corporation and Albert Dunlap, the CEO from 1996 till 1998. In July of 1996, Michael Price and Michael Steinhardt hired Dunlap as the CEO and chairman of the board for Sunbeam Corporation. As two of the original investors who bought Sunbeam from bankrupt Allegheny International, Price and Steinhardt together own 42 percent of its stock. Prior to hiring Dunlap they had tried, unsuccessfully, to sell Sunbeam. They believed that he was the one person who could turn the company around and increase stock prices and profits. The increase in stock prices did occur, almost instantly. The turnaround took just fifteen months. On July 19, 1996, the day Dunlap was named chairman and CEO of Sunbeam, the stock jumped 49 percent. The jump increased the share price from 12 ½ to 18 5/8, adding $500 million to Sunbeam’s market value. The stock continued to increase and reached a record high of $52 per share in March 1998.
Corporate turnaround specialist Al
FINANCE ADMINISTRATION
POST-CLASS ASSIGNMENT
MODULE 5
FAHRIAN C.H. CHOE
STUDENT ID: 128370
MELAKA # 03
DUE: JULY 5, 2004
FINAL CASE IN FINANCIAL DECISION MAKING
SUNBEAM CORPORATION AND CHAINSAW AL
Prepared For
Richard Brewington
Instructor
Ottawa University International
Prepared by
Fahrian C.H. Choe
Student
Ottawa University International
June 30th, 2004
CONTENTS
Page
Executive Summary……………………………………………………….i
Introduction………………………. ……………………………………...1 Dunlap’s Action Plan……………………………………………………..2 Accounting Practices Raise Questions…………………………………....4 Lawsuit …………………………………………………………………...5 Discussion………………………………………………………………...6 Conclusion ……………………………………………………………….9 Reference ………………………………………………………………..10
Executive Summary
This report is based on Sunbeam Corporation and Albert Dunlap, the CEO from 1996 till 1998. In July of 1996, Michael Price and Michael Steinhardt hired Dunlap as the CEO and chairman of the board for Sunbeam Corporation. As two of the original investors who bought Sunbeam from bankrupt Allegheny International, Price and Steinhardt together own 42 percent of its stock. Prior to hiring Dunlap they had tried, unsuccessfully, to sell Sunbeam. They believed that he was the one person who could turn the company around and increase stock prices and profits. The increase in stock prices did occur, almost instantly. The turnaround took just fifteen months. On July 19, 1996, the day Dunlap was named chairman and CEO of Sunbeam, the stock jumped 49 percent. The jump increased the share price from 12 ½ to 18 5/8, adding $500 million to Sunbeam’s market value. The stock continued to increase and reached a record high of $52 per share in March 1998.
Corporate turnaround specialist Al