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Diamond Foods, Inc. Message Board

  • shbrom shbrom Mar 25, 2012 12:58 PM Flag

    Part of Execs punishment has already occurred

    After a quick check of Form 4s just before the meltdown late last year, I note that Mendes and Neil have already suffered haircuts in their net worth that may not be recoverable. Mendes owned about $29MM in DMND on 9/27/11 and Neil owned about $8MM, valuing their holdings at about $90/share. You might dispute my valuation, and I accept that.

    But Mendes has already "lost" more than $20MM, and Neil $6MM of their retirement stash. They are likely to never be employable again (Would you send investment dollars to Bernie?).

    Before you pounce with replies, I am NOT saying what they did was proper...we don't know yet. For example, what would be your view if the improper payments were timed according to bad advice from DMND's auditors who might have been consulted prior to the mistimed attribution of costs? In that case who erred: the auditors or the execs, or both? Sometimes advice, even when you pay for it, simply isn't correct.

    And anyone familiar with FASB arcane rules knows that gray areas are present and exploited with some regularity by auditors and audited companies alike. Even honest internal corporate audit committees of BoD's miss major issues (I think of MCK).

    This in no way excuses anything that happened, but might mitigate our view of the departed execs. And for the more cynical among us, I am not Mendes or Neil posting in disguise.

    Good luck to the longs.

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    • "...Before you pounce with replies, I am NOT saying what they did was proper...we don't know yet."

      We do know. The audit committee determined payments were accounted for in the wrong years. How much more proof do you want?

      As for who is to blame. There is no evidence that D&T had anything to do with misdirecting the accounting. If they did, they would have been dismissed. But it was Mendes and Neil who got the boot. What does this tell you?

      Mendes and Neil will lose more when the clawbacks happen.

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