A foundering Spiegel races for life

Staff -- Home Textiles Today, 3/3/2003 12:00:00 AM

DOWNERS GROVE, IL —

Two years after assuming the helm, Spiegel's president, chairman and ceo Martin Zaepfel retired suddenly last week, handing over the reins to William Kosturos, a managing director at Alvarez & Marshal Inc., a turnaround and management consulting firm, who was named chief restructuring officer and interim ceo.

The news came just days after the company reported it may not have adequate funds to continue operations much longer. It also announced a new cfo, and the search for a permanent ceo.

Kosturos assumed his new position Saturday, March 1. Over the course of his nearly 20-year career, Kosturos has helped companies improve their operations and navigated turnaround, restructuring and reorganization situations.

"We are delighted to have someone with Bill's depth of experience join our team," said Michael Otto, chairman of Spiegel's board of directors.

On Feb. 25, Spiegel filed a form 8-K with the SEC stating it will fail to meet the minimum performance requirements for two debt offerings for the period ended Feb. 28. It also said it may not be able to meet other debt payments. That will trigger a series of payout requirements beginning in early March and continuing into April.

That might effectively block the company's cash flow and its ability to operate, unless it can find alternate sources of financing. But, as the company previously disclosed, it has been in default on its existing revolving credit facility since fiscal 2001 and is not permitted to borrow additional amounts under that facility.

Last Thursday, Spiegel announced the appointment of James Brewster as senior vp and cfo, replacing James Cannataro, who resigned in early February as executive vp and cfo. For the past 10 years, Brewster served as senior vp and cfo for Spiegel's Newport News subsidiary.