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Stewart meets with probation officials

Domestic maven thanks supporters after session; Revlon confirms her departure from its board; Omnimedia shares continue to fall

By Erin McClam | The Associated Press

5:34 PM EST, March 8, 2004

NEW YORK - Martha Stewart met with a probation officer and thanked viewers and readers for their support today as the board of her namesake empire met to discuss her fate.

Stewart briefly addressed a horde of camera crews outside a Manhattan courthouse where she spent about an hour with probation officials who will make a sentencing recommendation for lying about a well-timed stock sale.

"I want to thank my readers, my viewers and the Internet users," Stewart said as she stepped into a sport utility vehicle. "I just want to thank everyone for their support."

The courthouse appearance came as stock in Martha Stewart Living Omnimedia continued to slide and the board was gathering to discuss her future, according to a source close to the company who spoke on condition of anonymity. Her syndicated television show, "Martha Stewart Living," was taken off the air Monday on Viacom-owned CBS and UPN stations.

Stewart, wearing a black overcoat and carrying a Martha Stewart Living umbrella, was accompanied by her lawyer, Robert Morvillo, and another member of her defense team.

The remarks were her second since being convicted. As Stewart left the courthouse on Friday after the verdict, the Daily News asked her to comment on the fairness of the trial. She replied, "The unfairness of the trial, that's the right comment."

The meeting with probation officials is the first step toward Stewart's sentencing in June.

After a series of meetings, officials will hand up a report to U.S. District Judge Miriam Goldman Cedarbaum recommending a range of prison time for Stewart. Most legal experts expect that to be 10 to 16 months.

The judge can allow Stewart to spend part of her sentence in a halfway house, or in home confinement. The law also calls for up to $1 million fine for the four counts on which she was convicted -- conspiracy, obstructing justice and two counts of making false statements.

Stewart, 62, and former stockbroker Peter Bacanovic, 41, were found guilty of lying to investigators about why Stewart sold her shares of ImClone Systems stock on Dec. 27, 2001, the day before a disappointing government report on its cancer drug Erbitux.

Stewart told investigators in April 2002 that she had no memory of being tipped that ImClone CEO Sam Waksal was trying to sell his shares. Morvillo later admitted in court that Stewart was tipped.

Bacanovic also met briefly with probation officials Monday, but did not address reporters.

Stewart stepped down from the board of cosmetics giant Revlon Inc. today, Revlon spokeswoman Catherine Fisher confirmed. She would not comment further. Stewart had served on Revlon's board since 1996.

With her conviction, the government will likely press to have Stewart removed from the board of her own company, but the big question is how involved she will be. Stewart's name, now tainted with a conviction, is stamped on a wide variety of products, from TV shows to magazines and merchandise.

Stewart stepped down from her role as chief executive and chairman of the board in June after being indicted but remains as chief creative officer and a member of the board.

Dennis McAlpine, a managing director of the research firm McAlpine Associates, said the company has a number of options as it digests the verdict, from Stewart taking the company private to a complete name change.

Shares in the company continued to fall, closing Monday at $9.90 on the New York Stock Exchenge, down 96 cents. That added to a nearly 23 percent tumble on Friday after the verdicts. The stock had traded at about $19 a share before the ImClone investigation.

Stewart owns about 30 million shares of the company and has lost millions of dollars as the stock has fallen.

Both Stewart and Bacanovic have vowed to appeal, but legal experts have predicted they will have a difficult time persuading the appeals court to overturn their convictions.

Immediately after the verdict, her Web site featured a statement in which Stewart vowed to clear her name. In an initial version, Stewart said she knew that "I have done nothing wrong" -- but that part of the statement was quickly pulled off the Web site.

Under federal guidelines, defendants can receive lighter sentences if they show remorse for their crimes.