ST. LOUIS -- SAVVIS, Inc. (NASDAQ:SVVS), a leading global IT utility services provider, today announced that its Audit Committee is conducting a full investigation into matters relating to a lawsuit brought by American Express Travel Related Services, Inc. against SAVVIS and its Chief Executive Officer, Robert A. McCormick, for nonpayment of charges on a corporate credit card issued to Mr. McCormick.
The company also reiterated that Mr. McCormick did not submit the charges in question to SAVVIS for reimbursement and that SAVVIS has not made any payment to American Express related to the charges.
Pending completion of the investigation, Mr. McCormick has been placed on an unpaid leave of absence effective October 24, 2005. Jack M. Finlayson, the company's President & Chief Operating Officer, has been appointed as Acting Chief Executive Officer.
To assist in its investigation and to expedite a comprehensive review, the Audit Committee has engaged Sullivan & Cromwell LLP as independent counsel. Upon completion of its investigation, the Audit Committee will recommend appropriate action to the Board of Directors. SAVVIS officials do not intend to comment further on this matter pending completion of the investigation.
"SAVVIS continues to lead the industry in delivering innovative IT solutions to businesses," said Finlayson. "Our Board of Directors takes the concerns of stockholders very seriously. I am confident that the Audit Committee will conduct a fair, prompt and thorough investigation that protects the interests of SAVVIS, its investors, customers, and employees."
Mr. Finlayson added, "We will not allow these internal matters to affect our ability to deliver superior services for our customers and continued improvements in financial performance for our shareholders."
You hit the nail on the head. You've got to hand it to Scores for knowing the score, re attorney's fees. But to be clear, its about a wash for Savvis.
The pupose of the internal investigation will be to determine the CEO acted outside his authority and discretion, thereby sticking him with the bill and the lawsuit. Since he hasn't submitted the bill, they will argue he knew it was his personal bill all along. That means he used the corporate card for personal expenses, that sort of thing.
Savvis sacked their CEO for causing a stink in a whorehouse. Fair enough.
But to spend $200K on a high priced Law firm to hire Jim Rockford, Private Investigator, to confirm the CEO's indescretion? Come on Board, can't you open the Yellow Pages and queitly hire a Private Investegator without making a Press Release that you are spending your last 2 bucks on a Law Firm to to the same?
Didn't they just sack the clown? What's to investigate? Pay the damn bill. Avoid the bad PR and the Lawyer fees.
Talk about sleazy incompetence. Savvis' Board of Directors should resign in embarassment over the upcoming $200,000 legal bill they will be receiving around Christmas time for the results of the "investigation".
The CEO is gone. Hiring a Law firm to confirm this just to stave off "he might sue us for Millions" is stupid. You are right. He will not win. Wall Street will read this PR and reach the same conclusion, "Savvis is about to be sued by the ex-CEO for Millions for wrongful termination" and Savvis will be DONE.
St. Louis is not only out of the World Series, but batting Zero on the Board of Directors knowledge of Business scale.
Damage Control fellas. Ya coulda done it quietly, but you had to make a Press Release showing that "We Are Spending Our Last Two Dollars on Lawyers". Way to go.
My heart goes out to the Savvis Employee team for your Board's idiocy.
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