Silverman testifies on Walter Forbes' role in Cendant merger

0 Comments | USA TODAY, October, 2006 | by Greg Farrell

BRIDGEPORT, Conn. -- The retrial of former Cendant chairman Walter Forbes took a new twist Monday when Henry Silverman, the hard-driving founder of HFS, testified about his decision to merge HFS in 1997 with Forbes' firm, CUC International, to form Cendant. Following the merger, in April 1998, Cendant disclosed that CUC executives had overstated their company's revenue by hundreds of millions of dollars.

The disclosure shocked investors, who went on a selling spree, wiping out $14 billion, or half the company's market capitalization, in one day. Nine years have passed since the revelation of the fraud. Several former CUC executives pleaded guilty to manipulating the company's earnings and have cooperated with prosecutors. E. Kirk Shelton, the former chief operating officer,...