Litigation and Disputes
Duane Reade and its executives have been involved in various disputes with federal and local governments and labor unions over its business practices.
Its embattled CEO Cuti, along with former CFO William Tennant, were indicted on October 9, 2008 in Manhattan federal court for falsely reporting company income and conspiring to commit securities fraud from December 2000 to June 2005. Cuti had already been replaced in November 2005 by industry veteran Richard Dreiling, COO of San Francisco-area-based Longs Drugs stores.
Two unions and Duane Reade Inc. struck a deal on April 11, 2006 to close a five-year contract dispute. The three-year deal covers "all of Duane Reade's clerks, cashiers, pharmacy clerks, pharmacy technicians, and photo technicians", and it closes a dispute dating from September 2001, when their previous contract expired. As part of the deal, Duane Reade and the unions settled all outstanding union and company claims before the National Labor Relations Board.
In November 1997, the company settled charges that it sold drugs and other products in its New Jersey stores that were expired or overpriced. It agreed to pay a total of $200,000 in civil penalties, investigative costs, and fees, and to comply with the state's laws and regulations, but did not admit wrongdoing.
In June 2010, former Duane Reade Chief Executive Officer Anthony Cuti and Chief Financial Officer William Tennant were convicted of securities fraud occurring between November 2000 and June 2005. They faced up to 20 years in prison. Cuti was sentenced on November 15, 2010, to three years in prison; Tennant was sentenced in September 2011 to time served, supervised release for three years and a $10,000 fine.
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