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McWATERSHED™:
A Corporate Soap Opera
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Part One: Watershed's Corporate Meltdown
Columbus, OH (AP) - Three weeks ago,
music industry giant, Watershed Inc., was riding high
on a record earnings report and soaring stocks. Today,
the only thing saving the once proud company from filing
Chapter 11 is a humiliating hostile takeover by the McDonald's
Corporation. How could a stock valued at 88.36 on the
NASDAQ as recently as June 14th plummet to yesterday's
closing value of $0.17 per share? Once again, as with
Enron and Worldcom, it appears that shady accounting practices
are to blame.
On the surface, Watershed Inc. seemed
to be flourishing. The company was reporting strong sales
of their latest release, titled "The More It Hurts
the More It Works" and a financially successful string
of personal appearances and shows throughout Mexico. However,
Vice President and CEO Mike "Biggie" McDermott
resigned shortly and unexpectedly Monday June 24th when
SEC Chairman Harvey Pitt announced that his agency would
be filing fraud charges against the company after last
month's exhaustive audit unearthed numerous discrepancies
between earnings reports and actual income.
Among the findings:
Watershed reported a 15 million-dollar profit during
their spring tour of Central and South America making
numerous television appearances and performing a string
of large festival shows. However, SEC findings determined
that the band had, in fact, only made a number of appearances
at local "Donkey" shows in the Juarez, Mexico
region. Each show reportedly cost the band in excess
of 46,000 pesos ($425.00 US).
Watershed's enormous publishing catalog, which contained
over forty three hundred songs, claimed to have been
written and copyrighted by co-chair and founders Joe
Oestreich and Colin Gawel, was determined to contain
numerous stolen works. After eliminating fraudulent
claims such as "OOPS... You Did Me Again",
"Taint Talkin' 'bout Love", and "UN-Suck
My Cock" (claimed to have been re-recorded as the
#1 single "Unbreak My Heart" by Natalie Cole),
the remaining songs were valued at less than fifteen
dollars (120 pesos). Additionally, investigators found
that these publishing copyrights had been sold by drummer
Dave Masica to cover a gambling debt at the Reclining
Fox Nation Casino, in Low Show, South Dakota.
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