PhillyInc: Montgomery County company's board members are bailing
Within the last three weeks, Conshohocken's Skinny Nutritional Corp. has seen three of its four board members resign, each submitting a letter critical of how the company is being run.
The only board member left is chairman Michael Salaman, who also happens to be the CEO.
Skinny Nutritional makes Skinny Water, marketed as a zero-calorie, zero-sugar bottled water beverage. A tiny, unprofitable company, Skinny Nutritional's shares trade over the "pink sheets" over-the-counter market at a price that's quite near zero itself.
Though the reasons for board departures are generally routine (think demands of other duties), the skinny on Skinny is far from routine.
First out the door was Michael Zuckerman, who resigned Jan. 17 "because I do not have confidence that I am being kept informed of facts and events that involve the company," he wrote in a letter filed with the Securities and Exchange Commission.
One example Zuckerman cited was that Skinny Nutritional's directors and officers' liability insurance coverage had been allowed to lapse because the premium had not been paid. The board was not told until "well after the fact," he wrote.
Eight days later, John J. Hewes and Francis W. Kelly also informed the company they would resign from the board. In Hewes' letter dated Jan. 27, he said the tipping point for him was in mid-December, when he requested full disclosure to the board of the company's accounts payable information. Such information, including bank account records and credit card statements, was not made available, Hewes said.
In a letter Skinny Nutritional received Jan. 28, Kelly also expressed frustration over its unwillingness to provide detailed financial, production, and sales information. "Ultimately, I have had to recognize that, for whatever the reasons, the company will not correct these serious problems," he wrote.
Zuckerman, an executive with the privately held Zuckerman Honickman packaging company; Hewes, a former Sallie Mae executive; and Kelly, an equity trader who worked for Susquehanna International Group, had joined the board of Skinny Nutritional in July 2010.
In a regulatory document the company filed with Hewes and Kelly's resignation letters, Skinny Nutritional said it "does not concur with the characterizations" the directors described about "its purported unwillingness" to provide information.
Contact Mike Armstrong
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