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Shortly after becoming petitioner's CEO, Mr. Ruf undertook a
study of petitioner's inventory. In connection with that study,
he temporarily stopped all buying for petitioner's stores and
systematically determined what items of inventory it would dis-
continue selling. He decided to eliminate pet food, televisions,
video-cassette recorders, and automotive parts. In order to
obtain cash for petitioner, he started conducting sidewalk sales
to sell its unwanted inventory. Within approximately 90 days
after Mr. Ruf became petitioner's CEO, its inventory was reduced
by approximately $2 million.
Shortly after becoming petitioner's CEO in March 1986, Mr.
Ruf made a number of changes in the management and administrative
structure of petitioner. Mr. Neiman was named chairman of its
board of directors and relieved of responsibility as its CEO.
Mr. Ruf also terminated petitioner's president, CFO, director of
merchandise, director of personnel, and director of operations.
In addition to terminating petitioner's top management, Mr. Ruf
also discharged, inter alia, its director of real estate, direc-
tor of finance/controller, field merchandising manager, director
of advertising, and director of security. He also reduced the
number of buyers for petitioner from seven to four. As a result
of Mr. Ruf's efforts, in approximately three to six months after
Mr. Ruf became petitioner's CEO, petitioner's office staff was
cut in half from approximately 120 employees to approximately 60
employees.
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