November 25, 1999

The management shakeup prompted by questionable stock deals at Navigant Consulting Inc. is painful for Richard Metzler, who founded the niche energy-consulting firm as Metzler Group. The company went public in 1996 with new management, broadened its consulting expertise and changed its name earlier this year to Navigant.

Some of that new wave of management, including Chairman and Chief Executive Robert Maher, were fired or asked to resign this week because of questions over loans to them from company coffers. The money was used to buy Navigant stock; the timing has come under scrutiny because the transactions occurred shortly before the company said it was considering seeking a merger partner, an announcement that sent the stock price up.

But at least Metzler is able to watch events unfold from the outside.

"I stepped down as CEO four years ago and I left the company nearly two years ago," Metzler said. "I really don't have any stock left."

He said he was happy to turn his company over to a new generation of management. "It's a young man's business. "I'm 58 years old. I spent 30 years on the road. It's just time to do something different. I left because the last thing you want to do is hang around and be a pain. Who needs the old boss, for crying out loud?"

Today Metzler still is in the energy business - sort of. He founded Trove Partners ("as in treasure trove"), which has two hedge funds invested in utility stocks. So far the funds have $10 million in investors' capital, he said.

Big Jim: It'll be up to Navigant's auditor, KPMG, to determine whether those loans and stock purchases pass muster under accounting and legal standards. Whether they pass ethical muster under company standards will be determined by new Chairman Mitchell H. Saranow and the two outsiders on the board, former Gov. James Thompson, now at Chicago's Winston and Strawn, and Peter Pond of Donaldson, Lufkin and Jenrette Inc.

But Stephen Novack, of Chicago law firm Novack and Macey, questions just how "outside" Thompson really is. Novack notes that less than a week ago, Navigant settled a dispute with a client for almost $1.3 million. And the lead lawyer for Navigant in the case was none other than Thompson, Novack said.

Novack's client was . . . president of [a] firm that Navigant acquired in 1997 [and was] paid in restricted shares of Navigant stock, Novack said.

The dispute concerned when [the client] legally could sell her shares. In September, a judge ruled in favor of [the client], but by the time Navigant lifted its restrictions, the value of her shares had dropped, Novack said. Last week's settlement compensated her for most of that loss, he said.

Thompson acknowledged his role in the dispute, but said the amount of work he does on behalf of Navigant is "so small it's not material." He described the dispute . . . as "a small piece of litigation."