Riverstone postpones statement yet again

Riverstone Networks will not be filing a quarterly statement on time, the company revealed Oct. 11 in a Securities and Exchange Commission filing.

The California-based spin-off of Cabletron Systems – once New Hampshire’s largest employer — has not filed a quarterly statement since September 2004, when Riverstone admitted it improperly inflated revenue. At that time, it filed three quarterly statements, none of which have been audited

The reason for the delay, the company said, is that it switched accountants in 2004, replacing Ernst and Young with Grant Thornton in October 2004. Grant Thornton raised accounting issues over the timing of revenue, and not whether the transactions occurred, did not constitute irregularities and have no impact on the company’s cash position, the company said.

The SEC has been investigating Riverstone for several years about the reporting of dubious sales, practices similar to those that led Enterasys Networks CEO Enrique “Henry” Fiallo to plead guilty to securities fraud, and the indictment of Enterasys executives on related charges. Enterasys is another Cabletron spin-off.

Last month, executives’ trial – originally scheduled for November – was delayed until March of 2006.

Both companies engaged in the practices shortly after being spun off from Cabletron, co-founded by former New Hampshire Gov. Craig Benson. Both have since been drastically downsized and have moved out of state.

Riverstone would not provide a date when it would file with the SEC. The lack of timely filing resulted in Riverstone’s delisting from the Nasdaq. On Oct. 13, it was being traded on the Internet “pink sheets” for about 65 cents a share. – BOB SANDERS