Boardroom Battle at Children's Place

The board of directors at Children's Place, a clothing retailer, is locked in a battle over the ouster of Ezra Dabah, who resigned as CEO in September but remains on the board.

In a letter to Sally Frame Kasaks, the acting chair of the company, the former chief argued that his resignation was achieved by a power play by certain members of the board, according to a report in the New York Times.

In the letter, obtained by the Times, Dabah boasts of his performance as chief executive. "In  the last fiscal year, my team delivered 38 percent EPS growth (excluding non-recurring items), grew the market share by 40 basis points to 4.2 percent and increased sales per square foot productivity by 8 percent." Read the full letter.

"As the entire Board is well aware, my resignation had nothing to do with the 'issues' surrounding the 'code of conduct' and the Company's most recent inquiry. My resignation as CEO is solely attributable to a 'power-play' by certain members of the board." --Ezra Dabah, Children's Place

Yesterday, the company announced that its auditor, Deloitte & Touch, was resigning. The Big Four firm advised the retailer that it would not stand for re-election as the company’s auditor after its current work is done. "Today's press release incorrectly suggests that Deloitte & Touche is resigning because they determined they could not rely on my representations. As we all know, this is not true. I am no longer the chief executive officer and my certification is not at issue. In fact, Deloitte's senior audit partner relied on my representations for more than 11 years," wrote Dabah.

At the time of his resignation, the company cited "code of conduct violations," by two executives, including Dabah. " In one instance, he did not properly report to the company an immaterial increase in his wife's ownership of company shares as a result of a trust distribution. In the second, on two occasions he pledged shares of the company pursuant to a customary margin account during a 'black-out period' when prior approval of the Company's Board was required for such pledges," the company said in a statement.

Dabah denied the charges. "As the entire Board is well aware, my resignation had nothing to do with the 'issues' surrounding the 'code of conduct' and the Company's most recent inquiry. My resignation as CEO is solely attributable to a 'power-play' by certain members of the board and their discussions with Deloitte & Touche.

At this point it appears that Dabah, who is the largest single shareholder according to the times report, has no intention of stepping down from the board. In the letter he says he will hold those who have "disparaged my good name" responsible.