Albert J. Dunlap

Dunlap was born in Hoboken, New Jersey in 1937.[2] He entered West Point in 1956[12] and graduated with a degree in engineering in 1960.[2] He then served in the United States Army for 3 years.

In 1963, Dunlap entered the business world at Kimberly-Clark as part of its manufacturing operations.[2] He worked there for 4 years before being taken on at Sterling Pulp & Paper where he was put in charge of the family-run business.[12]

He engineered a massive accounting fraud at Nitec, a paper-mill company in Niagara Falls, New York. He was the company's president from 1974 to 1976, when he was fired owing to his abrasive management style. An audit by Arthur Young (now part of Ernst & Young) revealed numerous irregularities, including inflated inventory and nonexistent sales—circumstances similar to the later Sunbeam case. The final result was that Nitec's $5 million profit for 1976 was actually a $5.5 million loss. Nitec sued Dunlap for fraud but was ultimately forced out of business. However, Dunlap never mentioned Nitec on his resume, and these scandals were not widely known until reported by The New York Times after the scandals at Sunbeam.[13]

Lily Tulip Cup hired him as the president and CEO in 1983. In 1985, he was given the additional title of chairman of the company.[14]

From 1991 to 1993, he was CEO for Consolidated Press Holdings (CPH), a private company belonging to the Packer family, after Kerry Packer took a leave of absence due to health reasons. At the time, CPH had a diverse portfolio in media and publishing as well as chemical and agricultural operations. While there, he had mentored James Packer for the three years.[15]

In 1994, Dunlap became the CEO of Scott Paper after Philip E. Lippincott stepped down from the position.[16] In 1995, he sold Scott Paper to Kimberly-Clark for $9 billion and made $100 million from the deal via stock options and appreciation of his holdings.[17][18]

Dunlap took over as chairman and CEO of Sunbeam in 1996.[19] His methods resulted in Sunbeam's reporting record earnings of $189 million in 1997.[20]

On March 3, 1998, Sunbeam announced the acquisitions of camping gear maker Coleman Company, coffee machine maker Signature Brands (best known for making Mr. Coffee), and smoke detector maker First Alert. Sunbeam's stock rose 9% on the news.[21]

In the second quarter of 1998, the board of directors of Sunbeam investigated aggressive accounting practices and extreme discounting carried out at the direction of Dunlap. On June 13, 1998, Dunlap was fired.[22] As the fraud was further uncovered in late 1998, Sunbeam was forced to restate financial results dating back to 1996 multiple times.[23][24][25]

In 2001, the U.S. Securities and Exchange Commission sued Dunlap, alleging that he had engineered a massive accounting fraud. Also named in the suit were four other former Sunbeam executives and Phillip E. Harlow, the lead partner for Sunbeam's account with Arthur Andersen.[26] An SEC investigation revealed that Dunlap and others had created the impression of a greater loss in 1996 in order to make it look like the company had experienced a dramatic turnaround in 1997. By the SEC's estimate, at least $60 million of Sunbeam's 1997 earnings were fraudulent. He also offered incentives for retailers to sell products that would have otherwise been sold later in the year, a practice known as "channel stuffing," and used illegal bill and hold practices. The SEC also argued that the purchases of Coleman, Signature, and First Alert were made to conceal Sunbeam's growing problems. Sunbeam never recovered from the scandal and was forced into bankruptcy in 2002.[20]

Dunlap was also suspected of irregularities at Scott Paper. Not long after the shareholder settlement, he agreed to pay $500,000 to settle the SEC's charges. He was also banned from serving as an officer or director of any public company.[17][27] The United States Department of Justice investigated Sunbeam's management during Dunlap's tenure but ultimately did not file any charges.[28]

The shareholder lawsuit against Dunlap dragged on until 2002, when he agreed to pay $15 million to settle the allegations.[29]

Dunlap died at his home in Ocala, Florida, on January 25, 2019, following a short illness. His death was announced by Florida State University, of which he was a major benefactor.[19]

He is survived by his wife Judy Dunlap and son Troy Dunlap.[3]

A documentary film was made about Dunlap in 1998 called Cutting to the Core—Albert J. Dunlap.[30]

A documentary film by the BBC about business titans in Britain prominently featuring Dunlap called The Mayfair Set was released in 1999.[31]

In 2001, he was caricatured in Titans of Finance (Alternative Comics, 2001, ISBN 1-891867-05-9)[32] by Rob Walker and Josh Neufeld. The comic book is a collaboration between a cartoonist and a finance columnist, which casts Wall Street executives and traders as heroes and villains. The lead story features Ronald O. Perelman, and Mike Vranos and Victor Niederhoffer are among those included.[33]

In 2002, a documentary film by the U.S. TV program Frontline was released named Bigger than Enron. It detailed the events that occurred at Sunbeam when Dunlap was CEO and investigated the accounting practices that were implemented.[34]

By Dunlap:

• Dunlap, Albert J.; Bob Andelman (1997). Mean Business: How I Save Bad Companies and Make Good Companies Great. New York: Fireside. ISBN 0-684-84406-0.[35]

About Dunlap:

• Byrne, John A. (1999). Chainsaw: The Notorious Career of Al Dunlap in the Era of Profit-at-Any-Price. New York: HarperBusiness. ISBN 0-06-661980-7.[36]
• Byron, Christopher M. (2005). Testosterone Inc.: Tales of CEOs Gone Wild. New York: John Wiley & Sons. ISBN 0-471-70623-X.[37]

• Highlights of Dunlap v Sunbeam (2000-2001)
• How Al Dunlap Self Destructed by John Byrne
• Dunlap Student Success Center at Florida State University