Fairchild Corp. / FA

About Fairchild Corp.

1750 Tysons Blvd., Suite 1400, McLean, Va. 22102
www.fairchild.com | 703-478-5800 | Founded: 1956

Industry: Other | Category: Top 100 Companies

Fairchild disclosed in December that its internal controls were inadequate as of the close of its fiscal year on Sept. 30. The shortcomings led to unspecified accounting errors, auditor KMPG LLP said in a statement included in Fairchild's annual report to the Securities and Exchange Commission. Fairchild said it didn't have adequate resources devoted to accounting for complex transactions.
The company reported a $21.3 million loss for its last fiscal year. To improve its "financial flexibility," Fairchild said, it agreed to sell a Long Island shopping center on a site that once housed factories. The pending real estate sale was part of Fairchild's effort to obtain a short-term loan of $20 million.
The company, which is controlled by the family of chief executive Jeffrey J. Steiner, settled a shareholder lawsuit alleging that it had overpaid Steiner. Under the settlement, the company cut Steiner's $2.5 million salary by nearly half.
The settlement called for Steiner to repay $833,000 of the more than $5.6 million the company spent on his behalf in a French court case alleging that he facilitated and benefited from the misuse of funds of a French petroleum company. He received a suspended sentence and fine. The settlement also froze Fairchild payments to Steiner's retirement plan and ended company payment of premiums on a life insurance policy of which Steiner was a shared beneficiary.
Under the settlement, John Flynn retired as chief financial officer. The company reported that he would stay on as senior vice president for tax, but he has since left that position, a company spokesman said.
A Delaware judge had rejected an earlier settlement proposal as too anemic. Yet, where the earlier version called for reductions in Steiner's pay, the final version called for Steiner to renegotiate his pay without specifying terms.
Citing rising auditing expenses under new standards for publicly traded companies, Fairchild reiterated that it might go private. At its annual meeting in March of this year, Steiner said the board had appointed a committee to study the option. Fairchild is also considering "going dark," it said in an SEC filing. A spokesman wouldn't elaborate, but the term can mean deregistering shares and moving to the "pink sheets" of over-the-counter stocks with less financial disclosure.

Chairman and CEO: Jeffrey J. Steiner

Chairman and CEO: Jeffrey J. Steiner

2007 Financial Data

Total employees: 550 | Local employees: 35