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Cornell Cos.


named a new chairman and said it was reviewing its accounting treatment for a 2001 real estate transaction.

The government corrections and education contractor named Harry Phillips Jr. chairman, succeeding Steve Logan, who remains the company's chief executive.

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The appointment coincides with a review of an August 2001 sale/lease back transaction that included a nonrefundable $3.6 million fee paid to an investment bank under a retainer agreement. The company formed a special committee of its board to examine whether the fee affected the original accounting for the sale/lease back, and whether its financial statements properly reflected the fee.

Cornell said it paid the fee for advice on future financing vehicles and the strategic development of its business and agreed that it would be applied toward future contingent fees associated with possible future investment banking services.

Cornell's stock was halted on the New York Stock Exchange at $17.48 and was recently indicated at $10-$12 a share.