ABSTRACT
Sunbeam Corporation’s board hired Albert Dunlap in July 1996 hoping he could revive the struggling home appliance maker. Their decision was rewarded immediately as Sunbeam’s stock jumped from $12.50 to $18.63 on the day Dunlap’s hiring was announced. Sunbeam was one of the most widely recognized brand names in America during the second half of the twentieth century. Unfortunately for Sunbeam, it got caught up in the merger wave of the early 1980s and was acquired in 1981 by conglomerate Allegheny International. Investment fund managers Michael F. Price and Michael H. Steinhardt gained control of Sunbeam after Allegheny filed for bankruptcy protection following the stock market collapse of October 1987. Sunbeam had indeed used a variety of accounting tricks to inflate its 1997 revenues and profits. When Sunbeam eventually revised its financial statements, it restated 1997 net income to $38.3 million from the $109.4 million originally reported.
