Borden Chemicals and Plastics warns of possible financial inaccuracies

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Is this a 20 million y2k glitch? Hmmm

Borden Chemicals and Plastics warns of possible financial inaccuracies Doug Buchanan

Borden Chemicals and Plastics LP is warning that its financial statements could be off by up to $20 million because of accounting errors it made while installing new management software 18 months ago.

The Columbus-based limited partnership said the potential problems relate to how accounts receivable and inventory have been reported at Borden Chemicals and Plastics Operating LP, a resin manufacturer based in Geismar, La.

Borden Chemicals and Plastics Operating LP is 98 percent owned by Borden Chemicals and Plastics LP, whose partnership units are publicly traded. BCP Management Inc., the general partner, owns the remaining 2 percent.

Patrick Gallagher, a spokesman for the partnership, said problems ­ if any ­ likely occurred around late 1999, when the partnership switched to new enterprise-resource planning software from J.D. Edwards & Co. of Denver in preparation for then-feared computer problems from the changeover to the year 2000.

"Apparently, these inaccurate or erroneous entries took place then," he said. "What they don't know and are still looking at is were they carried forward or did they just affect it back then."

The partnership said its preliminary investigation showed overstatements of between $10 million and $20 million. Gallagher said the impact of any errors likely would be on the balance sheet, necessitating a recalculation of some items, but they could also affect its income statements.

The partnership said it would delay its latest quarterly financial report with the Securities and Exchange Commission. Borden Chemicals and Plastics Operating LP also will delay its monthly report to U.S. Bankruptcy Court in Delaware, where the company filed for protection from creditors in April in a measure it says was unrelated to the possible accounting errors.

"We advised these constituencies of the issues and that we and our external auditors have begun a full investigation," Mark J. Schneider, president and chief executive officer of BCP Management, said in a statement. "We appreciate their understanding."

Gallagher said the accounting glitch would have no effect on Borden Chemicals and Plastics Operating LP's credit facility from its lenders or on its efforts to find a partner for a joint venture or merger.

Borden Chemicals and Plastics Operating LP was created in 1987 as a spin-off from Columbus-based Borden Inc. but it no longer has a relationship with Borden or its Borden Chemical Inc. subsidiary. It used to supply products to privately held Borden Chemical, a maker of resins and adhesives, but that relationship ended last year.

http://columbus.bcentral.com/columbus/stories/2001/07/30/daily27.html

-- Martin Thompson (mthom1927@aol.com), August 02, 2001

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-- spider (spider@web.com), August 03, 2001.

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