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Non-Tech : Cendant Corporation (NYSE:CD) -- Ignore unavailable to you. Want to Upgrade?

To: Frank who wrote (1191)	7/23/1998 9:12:00 AM
From: John Carragher	Read Replies (2) \| Respond to of 3627

July 23, 1998 Group of Top Cendant Executives Call For Board to Remove Chairman Forbes By EMILY NELSON Staff Reporter of THE WALL STREET JOURNAL In a sign of further strife within the ranks of Cendant Corp., 44 senior executives sent a letter to the company's board calling for Chairman Walter Forbes to be removed because of the accounting fraud uncovered at businesses he led. "We simply cannot go forward under these circumstances," the letter states. "The continuation of Walter Forbes's employment as chairman of Cendant, or in any other capacity, represents the probability of substantial irreparable future damage to the company's respective business units ..." The letter asks the board, which has been split between directors who support Mr. Forbes and those who back Cendant Chief Executive Officer Henry R. Silverman, to call a special meeting and "vote to relieve" Mr. Forbes. A spokeswoman for Mr. Forbes questioned the intent behind the letter and said it doesn't change Mr. Forbes's commitment to remain chairman or his plan to become Cendant's chief executive in two years. Mr. Forbes says he didn't know of any alleged accounting problems. "Walter believes this is an orchestrated campaign by Henry Silverman to take control of the company," the spokeswoman said. Mr. Silverman said he had nothing to do with the letter. "I think the letter speaks for itself," he added. He said he wasn't aware of any plans to hold a special board meeting. Mr. Forbes's CUC International Inc. merged with Mr. Silverman's HFS Inc. in December, forming the marketing and franchising concern that owns brands such as Days Inn, Ramada hotels, Century 21 real estate and Avis rental cars. As part of the merger, Mr. Silverman and Mr. Forbes were to swap jobs in 2000. Directors, who are said to have received the letter by fax Wednesday, couldn't be reached for comment Wednesday night. Cendant said last week it discovered nearly $300 million in phony revenue over three years at CUC businesses, among other accounting trickery. The company said the U.S. attorney's office in New Jersey and the Securities and Exchange Commission are investigating. The letter is signed mostly by executives who head businesses that were previously part of HFS, though it also includes signatures from some former CUC executives. Former HFS executives now make up most of Cendant's senior management. For example, it is signed by Tony Menchaca, co-chairman and chief executive of the former CUC club membership businesses, where much of the accounting fraud occurred, the company has said. Mr. Menchaca, who was hired by Mr. Forbes, declined to comment last night. It isn't clear how so many executives could sign the letter because their offices are scattered between Cendant's dual headquarters in Parsippany, N.J., and Stamford, Conn., as well as units in Virginia and England. A Cendant spokesman said he wasn't aware of a recent meeting that included all these executives. Removing Mr. Forbes would require a vote of at least 80% of the company's 28 directors. Return to top of page \| Format for printing Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved.