Allou Healthcare Inc., a distributor of prescription drugs and consumer personal care products, on Thursday said it discovered that inventory and accounts receivable were substantially overstated and fired its senior executives.
The company, which had four units forced into bankruptcy earlier this month, also said its lenders had filed additional involuntary bankruptcy petitions this week, seeking to place the parent company and two more operating units into Chapter 11.
Allou said the total overstatement may range from $110 million to $115 million. It said it has hired a forensic accounting firm to determine the full scope of the accounting overstatements.
The fired executives include: Chairman Victor Jacobs; Chief Executive Herman Jacobs; Chief Financial Officer David Shamilzadeh; and Executive Vice President Jacob Jacobs, the company said. The four are retaining their seats on the board.
Chief Restructuring Officer Richard Sebastiao will assume the responsibilities of the dismissed executives, the company said.