Verdict erodes Stewart empire

MARTHA STEWART’S felony conviction rattled through her rapidly eroding business empire as shares of her namesake company continued to fall, Viacom cancelled her syndicated television show and she quit the board of cosmetic giant Revlon.

But the big question was the future of the domestic diva's bread-and-butter job as a leader of the company that bears her name.

Martha Stewart Living Omnimedia's board met on Monday to discuss Stewart's future, but the company made no announcement.

CEO Sharon Patrick said last week that plans had been made, but some could take months to execute.

One question was whether Martha Stewart, 62, who resigned in June as chairman and CEO, will remain a board member. She owns more than 60% of company shares and has 93.9% voting control. But her employment contract with the company allows Omnimedia to void it for, described in the contract, "Ms Stewart's conviction of a felony or willful gross misconduct, which in either case results in material and demonstrable damage to our business or reputation".

Stewart stepped down as chairman and chief executive after being indicted in June but remains a board member and chief creative officer. With her conviction, the government will likely press to have Stewart removed from the board.

Meanwhile, other businesses linked to the Stewart brand wasted no time in distancing themselves.

Shares of Martha Stewart Living Omnimedia fell 96 cents to close at $9.90 on Monday on the New York Stock Exchange following a near 23% tumble last Friday after the verdicts.

Stewart's syndicated television show, Martha Stewart Living, was taken off the air on Viacom-owned CBS and UPN stations. She also stepped down from the board of cosmetics giant Revlon, a position she had held since 1996.

The New York Times said that two columns its syndicate distributes would be renamed and written by people other than Stewart.

Stewart was convicted on Friday, along with stockbroker Peter Bacanovic, of lying about why she sold 3,298 shares of ImClone Systems stock on December 27, 2001, before it plunged on a negative report from government regulators.

Stewart was convicted of conspiracy, making false statements and obstruction of justice. Bacanovic was convicted of conspiracy, false statements, obstruction and perjury but cleared of falsifying a document.

Both are expected to get 10 to 16 months in prison when they are sentenced on June 17. Both have said they will appeal.

Stewart briefly addressed a horde of camera crews outside a Manhattan courthouse on Monday where she spent about an hour with probation officials who will make a sentencing recommendation.

"I want to thank my readers, my viewers and the internet users," Stewart said. "I just want to thank everyone for their support."