FINANCE

Judge Rules Against Wal-Mart in Tax-Shelter Case

BY CSA STAFF

New York City A North Carolina state judge ruled against Wal-Mart Stores Inc. in a tax-shelter case where the retailer paid itself rent and later counted that amount as a tax deduction.

Wal-Mart had transferred ownership of its stores to various in-house real-estate investment trusts (REITS), and then cut its tax obligation by taking deductions for rent payments that never left the company.

In a judgment signed on Dec. 31, Emergency Special Judge of Superior Court Clarence Horton Jr. ruled “there is no evidence that the rent transaction, taken as a whole, has any real economic substance,” other than for cutting Wal-Mart’s taxes.

The judge dismissed the retailer’s suit, where it sought a refund of the $33.5 million in taxes, interest and penalties it paid the state after authorities determined it underpaid by that amount.

Wal-Mart said it hasn’t decided on how it will proceed in the aftermath of the ruling, and declined to comment on the case’s specifics due to a possible appeal.

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Weis Markets names new CEO

BY CSA STAFF

SUNBURY, Pa. Weis Markets has named David Hepfinger as the company’s new president and CEO, succeeding former CEO Norman Rich, who has retired.

Prior to becoming CEO, Hepfinger was the company’s president and COO.

Prior to joining Weis Markets in March, Hepfinger was SVP of retailing and administration at Price Chopper, a 116 store supermarket company based in Rotterdam, New York. In this position, he oversaw Price Chopper’s warehouse, distribution, procurement and store operations.

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New CEO tasked with Borders turnaround

BY CSA STAFF

ANN ARBOR, Mich. Borders Group announced that Ron Marshall, who most recently was Principal of Wildridge Capital Management, a private equity firm he founded approximately three years ago, has been appointed president and CEO and will serve as a director. Marshall, replaces George Jones who served in that same capacity since July 2006.

Prior to founding Wildridge Capital, Marsahall was CEO for eight years with Nash Finch Company, a $5 billion food distribution and retail organization, where Marshall was responsible for a turnaround that included the quadrupling of earnings over a six-year period as well as a 40% improvement in EBITDA over the same period.

“Borders is a powerful brand with millions of loyal customers who love to shop in the stores,” said Marshall. “These are tremendous assets that can be built upon once the balance sheet is strengthened and the company is on more solid financial footing. I’ve led turnarounds at other retail organizations and look forward to leading a new management team at Borders to drive profitability and help ensure lasting success for this great name in retail.”

In addition to Marshall’s appointment as CEO, other management changes were announced. Mark Bierley has been named CFO and EVP of finance. Anne Kubek has been appointed EVP of merchandising and marketing. Additionally, Dan Smith has been named to the new position of chief administrative officer.

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