From the course: Running a Profitable Business: Revenue Recognition

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Story of ZZZZ Best

Story of ZZZZ Best

From the course: Running a Profitable Business: Revenue Recognition

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Story of ZZZZ Best

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- Barry Minkow started operating his carpet cleaning business out of the Minkow family garage when he was fifteen years old. At its peak, six years later, the company, called ZZZZ Best, had a market value of over $200 million. - On paper, Minkow himself was worth $109 million. Minkow was a celebrity. In February 1987 he was selected as one of the Top 100 Young Entrepreneurs in the United States. He spoke of making ZZZZ Best the General Motors of carpet cleaning. He talked of running for president one day. - But in a July 1987 press release, ZZZZ Best announced that Minkow had resigned as Chief Executive Officer because of a severe medical problem. Shortly thereafter, ZZZZ Best filed a Chapter 11 bankruptcy. The rapid growth of ZZZZ Best had been a fraud and Barry Minkow was eventually sentenced to 25 years in prison. - The major aspect of this fraud involved reporting fictitious revenue from fire damage restoration jobs. - For example, ZZZZ Best filed a registration statement with the…

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