Accounting & Tax

i2 CEO Unexpectedly Resigns

After helping to stabilize the company's financial position following an alleged accounting scandal, McGrath moves on.
Stephen TaubJuly 31, 2007

Michael E. McGrath has resigned as president and chief executive officer of i2 Technologies Inc., effective July 30. McGrath, 57, says he is seeking other opportunities, according to a regulatory filing. The supply chain management consulting company announced in May that McGrath was expected to retire by the end of the year.

McGrath had been CEO and president of i2 since February 28, 2005, and took the helm amid a Securities and Exchange Commission investigation into alleged accounting violations by former i2 executives. McGrath also served as the sole member of the options committee since April 2005.

In February, former i2 Technologies CEO Gregory A. Brady agreed to pay $8.3 million to settle charges with the Securities and Exchange Commission stemming from a scheme to overstate revenues. Brady was one of three former officers of the software company who were charged by the SEC in July 2005. Last October former chief financial officer William M. Beecher agreed to pay more than $2.1 million in a similar settlement.

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In 2004 the company agreed to settle SEC charges by paying $10 million. The commission alleged that, during the four years ending in 2001 and the first three quarters of 2002, i2 misstated roughly $1 billion of software license revenue, including more than $125 million it never should have recognized.

“Michael became CEO during a critical time in our history, and brought a great deal of energy and passion to the position while leading us through many key initiatives, including stabilizing the company financially, improving our management foundation and setting the stage for future growth,” said i2 Founder and Chairman Sanjiv Sidhu. He stressed that under McGrath’s leadership, i2 achieved eight consecutive quarters of profitability and improved liquidity.

In a separate announcement, i2 said that Pallab K. Chatterjee, executive vice president, Solutions Operations, and chief delivery officer, was appointed interim chief executive officer. McGrath is expected to remain employed by i2 in an advisory capacity as CEO emeritus through October 31, 2007, and will continue to assist the board of directors with the search for a new CEO.