Five Things You Should Read

June 14, 2018

Steinhoff's Dutch shareholders file lawsuit against Deloitte and how private equity killed Toys ‘R’ Us.

Steinhoff's Dutch Shareholders File Lawsuit Against Deloitte

Reuters

Dutch shareholders are suing accountants Deloitte & Touche seeking damages for alleged failures in Deloitte’s vetting of the books of retailer Steinhoff International NV. VEB, the Dutch association of shareholders, said on Wednesday it had filed a suit against Deloitte at the District Court of Rotterdam. It is preparing the Dutch legal equivalent of a class action suit under which it will try to hold the company, its directors, accountants, and possibly the banks that assisted in its stock market listing responsible for damages.

GM Names Its First Female CFO

Bloomberg

General Motors Co. is about to have two of the auto industry’s highest-ranking women in the upper echelons of its management team. Dhivya Suryadevara, GM’s vice president of corporate finance for the last 11 months, will become chief financial officer on Sept. 1, replacing Chuck Stevens, the company said Wednesday. GM will join a very short list of S&P 500 companies, including Hershey Co. and American Water Works Co., with women serving as CEO and CFO.

1 in 5 Public Companies Spent or Expect to Spend $1M to Comply With Rev Rec

WSJ - Paywall

For finance chiefs of some companies, adopting the new revenue recognition standard means adjusting their business operations to be in line with the new accounting framework. Finance teams spent months rewriting accounting processes and procedures and preparing new financial statements to comply with the new rules. Roughly one in five public companies surveyed by PwC said they spent or expected to spend $1 million or more on this effort.

Is a Private-Equity Takeover to Blame For Toys ‘R’ Us' Demise?

The Atlantic

In its court filing, the company laid the blame at the feet of Amazon, Walmart, and Target, saying it “could not compete” when they priced toys so low. Less attention was paid to the albatross that private-equity firms Bain Capital and Kohlberg Kravis Roberts and real-estate firm Vornado Realty Trust placed around the company’s neck. Toys “R” Us had a debt load of $1.86 billion before it was bought out. Immediately after the deal, it shouldered more than $5 billion in debt and, saddled with its new debt, however, the company had less flexibility to innovate. “Had these companies remained publicly owned,” Thomas Paulson, founder of the investment firm Inflection Capital Management, said, “they would have had a much higher probability of being able to adapt, to invest, and to withstand” the ups and downs of the economy.

7 Toxic Words a Leader Should Never Use

LinkedIn

The words a manager uses really, really matter. Even something said in jest or in the moment can stick with an employee for a long time. LinkedIn Learning Instructor Todd Dewett suggests avoiding the words cant, no, wrong, fault, never, stupid, and impossible at the office.