Tuesday, February 08, 2005

Bally report blames former CEO and CFO for errors

Bally Total Fitness said Tuesday that its audit committee found that former chief executive Lee Hillman and former chief financial officer John Dwyer were responsible for the company's previously disclosed accounting errors going back to 2000 and for creating a "culture of aggressive accounting."

The gym chain also fired two executives still working for the company - vice president and controller Ted Noncek and treasurer Geoff Scheitlin - who it said acted improperly in relation to the accounting. Bally stopped severance payments to Hillman and Dwyer.

Meanwhile, the company named David S. Reynolds as its new controller. Most recently, he was senior vice president and controller of Comdisco Inc.

Bally said Hillman and Dwyer were responsible for multiple accounting errors between 2000 and the first quarter of 2004 and encouraged aggressive accounting within the accounting and finance groups. The other two executives also acted improperly, Bally said. Hillman left Bally in 2002 and Dwyer left the company in 2004.

Bally report blames former CEO and CFO for errors

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