Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Olympus will settle claim from fired chief executive. Also expected layoffs at Olympus.

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The Wall Street Journal reports Olympus and Ex-CEO Woodford Settle Lawsuit with expected payment to Michael Woodford for approximately $15 million.

The article, behind a pay wall, indicates the settlement is moving towards approval by the Olympus board.

The claim is described in the article as “unfair-dismissal” which seems to be comparable to a wrongful termination claim in the United States.

CNN picked up an article from The Financial Times which reports that the $15M amount is based on what would have been paid over the remaining term of Mr. Woodford’s employment contract.  That means the suit is more like a breach of contract claim.

We will hear more of the chief executives side of the story soon. The WSJ article also says:

Mr. Woodford has written a book about his experience at Olympus, which was published in Japanese last month. A release in English is expected later this year.

The collateral damage from the accounting scandal continues. The WSJ article says efforts are continuing to find some sort of tie-in with another large company to build up Olympus’ equity.  Seems to me that will dilute Olympus’ independence.

Additionally, the WSJ article says that Olympus is planning to cut about 2,500 jobs. The $15 million settlement will pale in impact when compared to laying off 2,500 people.

Update 6-8-12 – Layoffs expected to be 2,700 per Wall Street Journal article: Olympus to Cut Jobs to Bolster Finances. That would be a 7% reduction spread over 2 years.

Written by Jim Ulvog

May 30, 2012, 8:37 am at 8:37 am

Posted in Audits, Fraud

Tagged with ,

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