Scandal Claims Top Brass At MiMedx

(RTTNews) - MiMedx Group Inc. (MDXG) said Monday that its Chairman and Chief Executive Officer Parker "Pete" Petit as well as President and Chief Operating Officer William "Bill" Taylor have resigned.

The resignations mark the latest executive departures amid an ongoing investigation of the tissue-graft developer's accounting practices. The company's shares are falling more than 31 percent in the regular trading session.

However, Petit will continue as a member of the MiMedx board, while Taylor has resigned from the board as well. These resignations follow the recent departures of the company's CFO as well as Corporate Controller and Treasurer.

According to MiMedx, the latest resignations arise in part from information identified by its Audit Committee through its previously announced independent investigation. The company noted that while this investigation is ongoing, it may take other actions, based at least partly on information from the investigation.

MiMedx's board named lead independent director Charles Evans as Chairman of the Board, with immediate effect, and also appointed David Coles, a Managing Director with Alvarez & Marsal, to serve as interim CEO.

The company has commenced a search to identify and evaluate internal as well as external candidates to serve as permanent CEO. It is also conducting a formal search for a permanent CFO and looking to fill the newly created positions of chief accounting officer and internal auditor.

The Audit Committee has already concluded that MiMedx's financial statements from fiscal year 2012 need to be restated.

According to the company, the need to restate the financial statements was based on investigation results that focused on the accounting treatment afforded to such sales and distribution practices for two distributors "for which certain implicit arrangements modified the explicit terms of the contracts, impacting revenue recognition during specified periods."

MiMedx said it continues to provide documents in response to a subpoena it received from the Securities and Exchange Commission last year.

MiMedx was named the fifth-fastest-growing public company in the U.S. by Fortune magazine late last year. The company makes skin grafts and injectable products from human placental tissues donated by new mothers, post-delivery.