Dennis P. Callahan.  Few may remember the name, even
fewer what he did.  

William Patrick Crowley founded the
Crowley Department
Store in Detroit in 1912. Two years later a partner joined
and became the Crowley, Milner and Company. The
company experienced growth throughout its history, but
never to the degree of other department store giants like
Dayton, Hudson, Macy or Sears.    Still the company was
strong enough to expend throughout southeastern Michigan
and north into Flint.  

Controversy and allegations raged in 1986 when Anthony
Franco, chairman of the public relations firm representing
Crowley, heard they had a deal to sell the company at $50 a
share.  Franco was able to come up with a more sound deal,
but at only $41 per share.  The Security Exchange
Commission investigated and Franco, in a settlement, was
banned from the stock market, never being able to complete
the purchase.  Because of the circumstances regarding
insider trading, the seeds of distrust were planted in the
Crowley, Milner and Company organization.  

Despite this distrust of the leadership, Crowley, Milner and
Company continued to grow and in February, 1997,
purchased 14 Steinbach stores in New Jersey. This was the
beginning of the end for Crowley as they would learn the
weed of distrust had not been removed from the garden.

Ten days shy of two years following the Steinbach purchase,
Crowley, Milner and Company filed for bankruptcy. Just as
stake holders had felt betrayed by Franco and those that
tipped him off to the 1986 sale, creditors and other
shareholders felt they had been betrayed due to the short
period between purchase and chapter 11.  A lawsuit was
filed in Detroit saying that Callahan and his chief financial
officer had failed in their fiduciary duties.

Interestingly, Callahan was not with the company when the
bankruptcy was filed. But there was a strong belief the new
leadership had been tainted by the growing weed of distrust
from the seeds planted by Franco and Callahan.

The situation has been devastating to Callahan.  The Detroit
Free Press reported he has had legal expenses in the
millions and that Shottenstein reneged on his severance
package.  

Today Callahan is a Realtor.

According to Callahan, it was the company’s loss of
customer focus caused its demise.  Those filing the lawsuit
apparently felt it was lack of trust in Callahan.  They evidently
did not consider that Shottenstein may have purchased the
chain to merge it into Value City.  They did not consider that
they mall operator may have fallen victim to the downturn in
mall traffic.  

They only looked to Callahan.

When distrust enters into any organization it must be dealt
with immediately.  Failure to do so allows confidence to
erode rapidly, which leads to employee dissatisfaction, lost
productivity, and weaker earnings.

Related topics:
Dennis Callahan
and lack of trust
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