iVillage on the defensive

With its initial public offering imminent, women's site iVillage today staunchly defended its accounting practices, following an accusation by a former executive and other legal wrangling.

"We fully stand behind our company, our position regarding the Kenner suit, and our financials, which have been fully audited by PriceWaterhouseCoopers," iVillage spokesman Jason Stell said, referring to a lawsuit filed last month by former iVillage executive Todd Kenner. Stell declined to elaborate because iVillage is in a Securities and Exchange Commission-mandated quite period.

Kenner alleges in the suit that iVilliage's chief executive Candice Carpenter reneged on her promise to give him stock options for his work. Once the company goes public, the options could be worth millions of dollars.

In support of Kenner's suit, iVillage's former chief financial officer Joanne O'Rourke Hindman made accusations in an affidavit regarding the company's accounting practices. She said she was fired last year after she began to voice her concern about the accounting practices. Excerpts from the affidavit were published in the New York Times and on the National Post Web site.

Hindman and Kenner were joined by another former iVillage executive, Steven Carter, who also filed an affidavit in which he accuses the company of denying him stock options.

iVillage, which targets women and is backed by television broadcaster NBC, plans to go public "as soon as practical," according to its filing with the SEC. Most analysts expect that to take place in the next few days. Whether investors are scared off by the legal trouble remains to be seen.

Hindman declined to comment on the case or her affidavit, referring all questions to her lawyer Paul Yetter. Yetter did not return calls to his office.

Carter said in his affidavit that there are several other former executives in the same position.