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Just months after grabbing the wheel of Take-Two Interactive and throwing the CEO and CFO into the street, hedge funds put a new CFO in the finance driver's seat.
Stephen Taub, CFO.com | US
June 12, 2007
Take-Two Interactive Software moved interim CFO Lainie Goldstein up to a new level, naming her the company's permanent CFO.
The circumstances of Goldstein's appointment seem fitting for a company whose flagship product features a character who takes the wheel of a car after yanking out the existing driver. Back in April, a group of hedge funds and other investors banded together to oust five directors from Take-Two's board and replace them with their own slate — a feat they accomplished without launching a formal proxy fight.
The investor group, which included hedge fund giants D.E. Shaw, SAC Capital, and Tudor Investment, as well as Oppenheimer Funds, teamed up to nominate their own candidates for the board and issued a statement saying that they planned to replace CEO Paul Eibeler and review the performance of CFO Karl Winters.
Eibeler, who had originally nominated the ousted directors, was fired by their replacements immediately after the annual meeting. Winters resigned as CFO 10 days later.
Goldstein has been with the video-game maker — best known for its Grand Theft Auto games — since 2003 and was most recently its senior vice president of finance. Her appointment — and the Eibeler and Winters — were part of a series of moves by new management designed to put the company back on track after a number of restatements. The company has also announced a restructuring plan that includes a $25 million reduction in its fixed overhead.
"When our management team took on a leadership role at Take-Two, we committed ourselves to making this the most creative, the most innovative and the most efficient company in our industry," said chairman Strauss Zelnick, in a statement. "We also pledged to our shareholders and employees that we would present a detailed action plan within our first 100 days. With over one month remaining, we have already made significant progress in assessing the organization and launching a major restructuring initiative."
Last December, Take-Two said it would revise prior results after discovering that stock option grants had been assigned dates that differed from the actual date of the grant. That was the company's fourth restatement since December 14, 2001.
Earlier that year, in October, Ryan Brant, who founded the company, resigned from a non-executive position. In 2005, Brant had agreed to pay more than $3.6 million while Take-Two agreed to pay $7.5 million to settle a Securities and Exchange Commission complaint that it overstated results from 2000 to 2003. Brant also agreed to be barred from serving as an officer or director of a public company for five years.
Goldstein has more than 15 years of financial and business experience in the software, entertainment, retail and apparel industries. Prior to joining Take-Two, she served as Vice President, Finance and Business Development with Nautica Enterprises. She also held positions in the audit and reorganization departments at Grant Thornton.