Al Dunlap agreed to pay the federal government $500,000 to settle charges he oversaw an accounting fraud that led to the collapse of
in the late 1990s.
Dunlap also agreed never to serve as an officer or director of a public company again. He and former Sunbeam Chief Financial Officer Russell Kersh, who will pay a $200,000 fine, neither admitted nor denied wrongdoing under the settlement.
Hired by hedge fund managers Michael Price and Michael Steinhardt to salvage the consumer products conglomerate they purchased from
, Dunlap took over Sunbeam in 1996 with such a reputation for cost-cutting that he was called "Chainsaw Al" at the time. He promptly hired Kersh, a former employee, and fired about half the company's 12,000 workers.
alleges that Dunlap's team also took needless restructuring charges after Dunlap came aboard, then used the reserves to help meet earnings estimates over the next several years. The executives were also charged with overly aggressive revenue recognition involving billing customers for items they hadn't agreed to buy.
Chainsaw Al was fired in June 1998. The company tried to reorganize around new leadership but was forced into bankruptcy in February 2001.
The accounting scandal predated the famous debacles that have marked the early 2000s but did involve auditor-to-the-corrupt Arthur Andersen, whose trial in the blowup is pending.