The following timeline steps through the events leading up the audit review of Sunbeam Corporation and the potential restatement of 1997 earnings. Sunbeam hired Al Dunlap in 1996 as chairman and chief executive. Dunlap, also known as "Chainsaw Al," is the notorious slash and burn downsizing executive known for creating shareholder value while eliminating thousands of jobs. He was fired in June of 1998 amid speculation of accounting irregularities.

July 19, 1996	Al Dunlap is named chairman of Sunbeam. The stock surges almost 50% from $12.5 to $18.625.
November 13, 1996	Dunlap announces management strategy to cut 12,000 Sunbeam employees and close two thirds of its 18 manufacturing plants.
October 23, 1997	Sunbeam hires Morgan Stanley investment bank to explore possible acquisitions or a sale of the company.
January 28, 1998	Dunlap publicly declares corporate turnaround when Sunbeam reports record sales and earnings for 1997.
March 2, 1998	Sunbeam announces three acquisitions on the same day: Coleman, First Alert, and Signature Brands.
March 4, 1998	Sunbeam stock closes at a record $54 a share up from $12.5 pre-Dunlap.
April 3, 1998	Paine Webber downgrades Sunbeam as the company shocks Wall Street with a warning that first-quarter earnings will be below expectations. Stock falls 25% to $34.375.
May 11, 1998	Sunbeam reports first quarter loss of $44.6 million ($0.52 per share). Dunlap tells investors that he let down his guard and that it will never happen again.
June 8, 1998	Sunbeam responds to accusation in a Barron's article over the weekend alleging that the company "manufactured" its 1997 earnings through creative accounting measures.
June 9, 1998	The external pressure from Ronald Perelman and the Barron's article forced Dunlap to call an impromptu board meeting so he could explain his position. The discussion turned to the ability for Sunbeam to meet its second quarter 1998 earnings forecast. This prompted Dunlap to give the board of directors an ultimatum regarding his leadership. Dunlap proclaimed that Ronald Perelman was secretly driving the price of the stock down and planning an acquisition. He and active CFO, Russell Kersh, would quit immediately if the company did not give them the right level of support.
June 13, 1998	The board of directors voted to oust chairman and CEO Al Dunlap twenty three months after recruiting him for the job.
June 14, 1998	Investor Ronald Perelman files a 13D statement with the SEC indicating a 14% ownership stake in Sunbeam.
June 15, 1998	Sunbeam's board agrees to hire Jerry Levin to replace Dunlap. Levine is a former aide to Sunbeam's largest investor, Ronald Perelman.
June 18, 1998	Mutual fund manager Michael Price also files a 13D statement with the SEC indicating a 17.4% ownership stake in Sunbeam. Between Perelman and Price, the two investors controlled almost one-third of the common voting rights.
June 30, 1998	Sunbeam announces that they retained Deloitte & Touche to audit the 1997 financial statements. This is in addition to Arthur Andersen, Sunbeam's normal auditing firm. The company also noted that pending the completion of the review, 1997 financial statements and the review by Arthur Andersen should not be relied upon and could result in a restatement of 1997 and first quarter 1998 financial results.

Sunbeam's stock performance compared to the S&P 500 for the past five years can be found here.

Conclusion: The results of the financial review have not been disclosed at the time of this summary, but based on the company's response to the allegation, the 1997 financial results will most likely be restated. Al Dunlap will take the brunt of the blame regardless of where the actual blame should fall. Expectations from shareholder, institutional investors, and the board of directors might just have exceeded Dunlap's ability to cut costs and raise firm value. When this was his sole purpose as CEO, creative accounting might have been the only (and illegal) alternative.

FinanceProfessor.com

Chainsaw Al's Fall From Glory