Cascade International says it is "returning to respectability" after months of confusion following the disappearance of its chairman and a federal probe into financial irregularities.
The clothing and cosmetics retailer has launched comprehensive audits, sued former officers and bankers and discounted its stock value to almost nothing, interim chairman Aaron Karp said in a letter to shareholders.
"Right now we're settled in and we're operating very successfully" under Chapter 11 protection, bankruptcy attorney Robert Furr said Friday. "The company has been downsized, and we're buying new merchandise."
The letter to investors in Cascade's nearly worthless stock described how its new management has struggled to get an accurate picture of the company's assets following the Nov. 18 disappearance of Victor G. Incendy and the discovery of clandestine stock sales.
Karp said in the letter that Cascade is suing Incendy's ex-wife, J.B. Van Zanten, and a formerCascade director, Dr. Lawrence D. Moses, to recover cash. Furr said Van Zanten appears to have vanished. There was no answer at Moses' home Friday.
Cascade became one of the nation's hottest over-the-counter stocks, selling for $12 a share last August after reporting years of high growth and consistent profits from 126 stores nationwide.
But the price plummeted to $2.75 last fall after analysts discovered many of the stores didn't exist.
Incendy lost $75-million in paper profits during the plunge and is being investigated by the FBI, Securities and Exchange Commission and other agencies for possible securities violations. Neither agency would comment Friday.
Furr said the company still doesn't know where Incendy is.
Incendy may have profited from the sale of millions of shares of unauthorized stock in the weeks before he disappeared, but auditors have given up trying to determine which outstanding shares are legitimate.
Instead, the company has decided to honor all 26,214,649 outstanding shares at a par value of $.001 per share.