FORM 8-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 29549
CURRENT REPORT
Pursuant to Section 13 of 15(d) of the Securities Exchange Act of 1934
Date of Report: October 18, 2001
Name of Registrant: GIANT GROUP, LTD.
Registrant's Address: 9440 Santa Monica Blvd.
Suite 407
Beverly Hills, CA. 90210
Registrant's Phone Number: (310) 273 5678
State of Incorporation: Delaware
Commission File Number: 1-4323
IRS Employer Identification Number: 23-0622690
Item 4. Changes in Registrant's Certifying Accountant.
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GIANT GROUP, LTD.'s ("Company") management and the Company's Audit
Committee of the Board of Directors determined that it would be in the best
interest of the Company to dismiss its independent accountant BDO Seidman, LLP
("BDO") effective October 18, 2001. BDO acted as the Company's independent
accountant for the year ended December 31, 2000 and for the quarters ended June
30, 2001 and March 31, 2001.
The termination of BDO was approved by the Company's Audit Committee of the
Board of Directors and is not the result of any disagreement with BDO on any
matter of accounting principles or practice, financial statement disclosure or
auditing scope or procedure.
BDO issued a Report dated February 13, 2001 on the Registrant's
Consolidated Financial Statements for the three years ended December 31, 2000.
This Report included an unqualified opinion on the Company's Consolidated
Balance Sheet as of December 31, 2000. BDO could not express an opinion on the
Company's Consolidated Balance Sheet as of December 31, 1999 and the
Consolidated Statements of Operations, Retained Earnings and Cash Flows for the
three years ended December 31, 2000. BDO was not able to apply any audit
procedures related to these financial statements due to the unavailability of
records of Periscope Sportswear Inc.'s ("Periscope"), one of the Registrant's
wholly-owned subsidiaries. Periscope delivered peaceful possession of its assets
and records to a third party and also filed a voluntary petition under Chapter 7
of the bankruptcy code in the fourth quarter of 2000. The Bankruptcy Trustee
also received Periscope records.
The Registrant's prior independent accountant, Arthur Andersen, LLP
("Arthur Andersen"), issued a Report dated April 12, 2000 on the Registrant's
Consolidated Financial Statements for the year ended December 31, 1999 and a
Report dual dated March 12 and 25, 1999 for the year ended December 31, 1998.
Arthur Andersen's Report dated April 12, 2000 was modified to include a
paragraph on the Registrant's ability to continue as a going concern. Arthur
Andersen's Report did not contain an adverse opinion or a disclaimer of opinion,
and was not qualified or modified as to audit scope or accounting principles.
The Company's Audit Committee of the Board of Directors approved the dismissal
of Arthur Andersen on July 19, 2000. This dismissal was not the result of any
disagreement with Arthur Andersen on any matter of accounting principles or
practice, financial statement disclosure or auditing scope or procedure. The
Company filed Form 8-K on July 26, 2000 reporting this event. The Company
requested that Arthur Andersen give its consent for the Company to include their
audit reports for the two years ended December 31, 1999 in any Company public
filings and allow BDO to review Arthur Andersen's prior years working papers.
Arthur Andersen declined this request. GIANT's management believes this request
was declined because of the litigation between Arthur Andersen and the Company,
related to the Company's acquisition of Periscope in 1998.
During the Registrant's fiscal year ended December 31, 2000 and the
subsequent interim periods:
(a) BDO has not advised Registrant that internal controls necessary for
the Registrant to develop reliable financial statements do not exist;
(b) BDO has not advised Registrant that information came to BDO's
attention that led BDO to no longer rely on Company management's
representations, or that has made BDO unwilling to be associated with
the financial statements prepared by Company management;
(c) BDO has not advised Registrant that BDO needed to expand significantly
the scope of its audit, or that information came to BDO's attention
during such time period that if further investigated may (i)
materially impact the fairness or reliability of either a
previously-issued audit report or the underlying financial statements,
or the financial statements issued or to be issued covering the fiscal
periods subsequent to the date of the most-recent financial statements
covered by an audit report or (ii) cause BDO to be unwilling to rely
on Management's representations or be associated with the Registrant's
financial statements; and
(d) BDO has not advised Registrant that information came to BDO's
attention of the type described in Subparagraph (c), the issue not
resolved prior to BDO's dismissal.
Information required in Subparagraph (a) thru (d) above for the Company's
fiscal year ended December 31, 1999 is disclosed in the Company's Form 8-K filed
on July 26, 2000.
The Company retained Stonefield Josephson, Inc.("Stonefield") on October
19, 2001 to act as its independent accountant for the third quarter ended
September 30, 2001 and the year ended December 31, 2001. Prior to the change of
accounting firms, both Company management and the Company's Audit Committee of
the Board of Directors did not consult Stonefield or any other accounting firm
regarding the application of accounting principles to a specific completed or
contemplated transaction, or the type of audit opinion that might be rendered.
Item 7. Financial Statements and Exhibits.
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Exhibit 16. Letter of BDO Seidman, LLP regarding change in certifying
Accountant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 24, 2001 By: /s/ Pasquale A. Ambrogio
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Vice-President and Chief Financial Officer