Auditor raises Spiegel concerns
Home & Textiles Today Staff -- Home Textiles Today, February 4, 2003
Chicago — Spiegel's auditor has raised red flags about its ability to continue as a going concern.
KPMG LLP raised the concerns in Spiegel's form 10-K filed today for the fiscal year ended Jan. 31 with the Securities and Exchange Commission.
"The audit report on the consolidated financial statements of Spiegel Inc. and subsidiaries referred to above contains an explanatory paragraph that the company was not in compliance with certain restrictive covenants in its debt agreements, and accordingly, substantially all of the company's debt is currently due and payable," the auditor's report stated in the filing. "In addition, the company was not in compliance with certain provisions of agreements with the insurer of its asset-backed securitization transactions and has been unable to negotiate amended agreements with its lenders. These matters raise substantial doubt about the company's ability to continue as a going concern."
KPMG noted management's plans to address those concerns, also noting that financial statements did not include any adjustments that might result from the outcome of such uncertainty.