The board of Martha Stewart Living Omnimedia was locked in emergency meetings yesterday to determine the future of the company after its founder was last week convicted of lying to federal investigators.
The difficulties facing the company were underlined over the weekend when CBS and UPN, two of the leading television networks in the United States, announced they were dropping the disgraced businesswoman’s series, Martha Stewart Living. Last week the company reported its first annual loss as advertisers turned their backs on its magazines.
Shares in the firm, which fell 23% after the verdict was announced on Friday, were another 7% lower in early trade at $10,14.
Stewart met with a probation officer on Monday morning, the first step towards her sentencing on June 17. She spent an hour in the federal building in lower Manhattan.
As she left the courthouse she made her first public comments since her conviction, thanking her fans. ”I want to thank my readers, my viewers and the internet users,” she said. ”I just want to thank everyone for their support.”
Stewart’s defence has 110 days to file an appeal.
She was found guilty on all four charges she faced: obstruction of justice, two counts of making false statements and conspiracy. She was accused of lying to investigators looking into her suspicious sale of shares in drug company ImClone in December 2001.
Her co-defendant in the trial, the former Merrill Lynch broker Peter Bacanovic, also attended a probation hearing. Having remained calm throughout the trial, he finally showed some emotion, making an obscene gesture to a camera crew from his car.
Stewart stepped down as chief executive in June last year but remains a director of the company. There was some expectation yesterday that she would give up her position.
The company has already been trying to shift the brand away from its founder, whose name appears on its magazines, TV programmes and merchandise. She no longer features on the magazines’ covers and the company is trying to build new brands.
Options for the company include changing its name, putting it up for sale or taking it private. Stewart still has a 61% stake in the company. – Guardian Unlimited Â