Cendant feels pinch of accounts scandal
Cendent, one of the world's biggest hotel franchisors, is to pay $2.83b (£1.75b) to settle lawsuits from shareholders over an accounting scandal.
The settlement, said to be the largest resulting from a shareholder lawsuit in US history, relates to accounting irregularities unearthed at CUC International, which merged with HFS in 1997 to create Cendant.
The group, known for hotel chains such as Howard Johnson, Days Inn and Ramada, has claimed that the huge cost of the settlement will not affect its plans to expand its European hotel interests.
The company is now going to pursue counter-claims against CUC's former auditor, Ernst & Young LLP.
Following the discovery of the irregularities, nine directors, including former chairman Walter Forbes, resigned from the board (Caterer, 6 August 1998, page 10).
