Albert J. Dunlap Case
In April 1996, Sunbeam hired Albert J. Dunlap as its CEO. Dunlap led the company in a corporate restructuring. This restructuring provided a hefty reserve to protect against future earnings shortfalls. The restructuring reserve included the following: 1) $18.7 million of items that benefited future periods, 2) $12 million in litigation reserves which did not met the criteria of a loss contingency, and 3) $21.8 million in a cooperative advertising reserve which was approximately 25 percent higher than the previous year without a proportional increase in sales.
Sunbeam also implemented various methods of accelerating revenue recognition in an attempt to increase its stock price. These methods included recognizing revenue from the following:
Sunbeam also implemented various methods of accelerating revenue recognition in an attempt to increase its stock price. These methods included recognizing revenue from the following: