NEW YORK( TheStreet) - The consulting firm that is advising Eastman Kodak (EKDKQ) on its bankruptcy reorganization is now contributing its financial savvy to Diamond Foods (DMND) after an audit investigation revealed two years of accounting misstatements at the company, leading to the dismissal of two top executives.
On Wednesday, Diamond Foods hired Michael Murphy, a managing director at restructuring specialist Alix Partners to be the firm's CFO, replacing Steven Neil effective immediately as part of a sweeping management and board shakeup.
Neil and Michael Mendes, who had served as Diamond Foods' CEO and chairman, have been placed on administrative leave. Board director Rick Wolford was named acting CEO, while independent director Robert Zollars will become the snack foods company's chairman.
For Alix Partners, the hiring is another high-profile role after Eastman Kodak hired managing director James Mesterharm to be the camera maker's chief restructuring officer through its bankruptcy process, replacing FTI Consulting. Alix Partners also worked on the restructuring of Borders in 2011.Kodak has secured $950 million in financing as it seeks to monetize its patents and exit bankruptcy with a focus on its digital operations. Diamond Foods shares were halted on the news of the management change and the company's earnings restatements, announced after the market closed on Wednesday. Shares fell by over 44% to $20.70 in after-market trading.
Murphy of Alix Partners has previously worked as chief operating officer and chief administrative officer for NextWave Wireless and as chief financial officer and treasurer of Office Depot's China operations in projects for the firm, according to Alix Partners' web site. He's also acted as an adviser to the creditors of Pacific Lumber and served as an interim officer for bankrupt subprime lender Accredited Home Lenders. A Procter & Gamble (PG) spokesman said the company will consider its options on the $2.35 billion sale of its Pringles brand to Diamond Foods after hearing news of the accountancy irregularities and management change. The Securities and Exchange Commission and Justice Department are currently also investigating Diamond Foods and its financial statements, however no findings have been released. -- Written by Antoine Gara in New York
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