business news in context, analysis with attitude

The Washington Post reports this morning that U.S. Foodservice threatened to sue a web site that was posting critical statements about the company, serving as a public forum for disgruntled present and former employees of the Ahold division.

US Foodservice is under federal investigation after it was revealed it had overstated its revenues by a half-billion dollars. The site,, actually has been in existence for five years, but only was seen as a threat since the accounting scandal hit at Ahold. Lawyers for US Foodservice said that the site was posting “false and defamatory statements,” while the site’s owner said the company’s actions were “petty.”

The owner of the site shut down its message board yesterday under threat of the suit.

Of course, US Foodservice also is having a disagreement with its Dutch parent company over culpability. It says that the departure of Ahold’s CEO and CFO had nothing to do with its own actions, and Ahold’s current chairman has disagreed.

The Post also reports that the federal probes into the company -- being conducted by the US attorney in Manhattan, the US Securities and Exchange Commission (SEC), and the FBI – is now “focusing on discrepancies between what an executive told suppliers and what the company reported in financial statements about rebate payments.”

The investigation has centered on the roles played by Mark P. Kaiser, US Foodservice's chief marketing officer, and Tim Lee, a purchasing executive, both of whom are currently under suspension. Investigators are also looking at James Miller, the company’s CEO, and Michael Resnick, the CFO, to find out what they knew and when they knew it.
KC's View:
And the company’s response to all this is to make sure disgruntled employees can’t talk about it online?

They’ll be coming after MNB next…

One man’s “false and defamatory” is another man’s “petty.”

We just think US Foodservice ought to have better things to do than going around trying to suppress criticism of its actions. That sounds so…draconian.

It could be doing other, more productive things. Like investing in math lessons for senior executives. Or ethics training.