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Saturday, January 13, 2007

MALDEN MILLS, HEWLETT PACKARD UPDATES

As I mentioned in yesterday's post, Bryan Wagner, the private investigator hired by Hewlett-Packard as part of its efforts to stem the information leaks about the company, pleaded guilty yesterday. He has agreed to cooperate with the government and its investigation. Chairwoman Patricia Dunn and four others (including Wagner) were charged in the case. (Go to http://www.here-now.org/shows/2007/01/20070112_9.asp for an interview about this on yesterday's Here and Now program. A Bloomberg.com story appears at http://www.bloomberg.com/apps/news?pid=email_en&refer=news&sid=a.Tlk_S0xU3w with full details on the case.)

Also in yesterday's news, a federal judge ordered Malden Mills, the makers of Polater Fleece based in Lawrence, Massachusetts, to move its bankruptcy proceedings to Masschusetts, according to a story by Ross Kerber in today's Boston Globe. (http://www.boston.com/business/globe/articles/2007/01/13/creditors_get_malden_mills_win/).

This is viewed as a victory for the company's creditors who hold a minority stake in the company.

One of those owed is former CEO Aaron Feuerstein who tried unsuccessfully to retain control of the company when it emerged from bankruptcy in 2003. According to the Globe, Feuerstein owns 5 percent of the company.

Long-time readers of The Right Thing column may recall that Feuerstein has appeared in the column in the past, including one that appeared on January 20, 2002. In that column I asked the question of whether workers owed Feuerstein anything as he was struggling to emerge from bankruptcy since he had decided to keep them on payroll after the company nearly burned to the ground on December 11, 1995, even though he didn't have to.

Feuerstein told me that he didn't "expect anything of people" in response to what he did in 1995. "You're supposed to do what's right because it's right, not because there's a payoff," he said. So neither employees nor members of the community nor customers nor vendors owed him anything. I asked readers if regardless of the fact that they didn't, whether they thought they should.

Ultimately, I concluded it was an individual choice where without obligation his various constituencies should decide the right thing to do. Unfortunately, it was not enough to enable Feuerstein to hold on to his company or for the company to keep from going into bankruptcy again.

The New York Times charges to view past articles, but if you're interested in seeing the entire column from January 2002, it's available for a fee at: http://www.nytimes.com/2002/01/20/business/yourmoney/20ETHI.html. It is also included as chapter 17 in the collection The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business (Smith Kerr, 2006) which is available at http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?z=y&EAN=9780978689902&itm=1 and http://www.amazon.com/Right-Thing-Conscience-Personal-Responsibility/dp/0978689909/themaxletterA.

1 comment:

MoralHeroes said...

Putting his employees and his community first is such a welcome change to modern business practices. Thanks for featuring him.

Because of the great deed you listed here Aaron is also featured as hero of the week over at MoralHeroes.org

http://moralheroes.org/aaron-feuerstein