Huron plummets on plans to restate results, chief's resignation

Huron Consulting Group Inc., which provides consulting services to health-care companies and law firms, dropped 68 percent in early U.S. trading after saying it will restate financial results for the past three years and that Chief Executive Officer Gary Holdren resigned.

Huron dropped $30.04 to $14.31 at 8:20 a.m. New York time in trading before the Nasdaq Stock Market opened. Shares of the Chicago-based company had lost 23 percent this year before today.

The restatements will begin with fiscal 2006 and extend through the first quarter of 2009, Huron said in a statement sent July 31 after the close of U.S. trading. The estimated effect on net income is $57 million.

Huron said its audit committee determined that shareholders of acquired businesses redistributed portions of their acquisition- related payments among themselves and to unidentified Huron employees in ways that may have violated U.S. Securities and Exchange Commission guidelines.

Holdren resigned as CEO and chairman July 27 and will leave at the end of August, Huron said.

"Because the issue arose on my watch, I believe that it is my responsibility and my obligation to step aside," said Holdren, who has been CEO since 2004.

James H. Roth replaces Holdren as CEO. George Massaro was named chairman. James Rojas will replace Gary Burge as chief financial officer. Burge will remain treasurer and stay with the company until the end of the year, Huron said. Wayne Lipski, previously chief accounting officer, also will leave, the company said. Huron said it doesn't expect to incur severance expenses as a result of the departures.

The company also reduced its sales forecast to $650 million to $680 million for 2009 from an April prediction of $730 million to $770 million.