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Martha ready to do time
Trendsetter wants to start 5-month sentence soon to get this "nightmare" over with.
September 15, 2004: 5:08 PM EDT
By Krysten Crawford, CNN/Money staff writer

NEW YORK (CNN/Money) - Martha Stewart said Wednesday she'll start serving her five-month prison sentence as soon as possible in order to put her "nightmare" behind her.

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The homemaking expert and entrepreneur said the decision was a hard but necessary one for her to get on with her life and her business, and that she was anxious to get back to work as soon as she could.

"The best word to use for this very hard and difficult decision is 'finality,' and my intense desire to put this nightmare behind me, both personally and professionally," Stewart, 63, said at a news conference Wednesday morning at Martha Stewart Living Omnimedia's Manhattan offices.

"I must reclaim my good life and I must return to my good works."

While Stewart will continue to appeal her conviction -- and her lawyers insisted she has a good case -- legal experts said her chances of winning an appeal were actually slim, and that probably figured into her decision as well.

Dressed in khaki garb and at times emotional, Stewart called the prospect of going to prison and giving up her freedom "frightening and difficult."

Stewart was sentenced in July to five months in prison and five months of house arrest after being convicted of obstructing justice and lying to investigators during an insider trading probe into why she sold ImClone Systems Inc. (IMCL: Research, Estimates) stock in late 2001.

The federal judge who oversaw her trial, Miriam Goldman Cedarbaum, ruled when Stewart was sentenced that the home decorating maven could stay out of prison pending her appeal.

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Stewart discussing her decision to do prison time.

But Stewart had said she might serve her time early, before her appeal was heard.

Martha Stewart Living Omnimedia, the lifestyle company she founded and built into a hugely successful media empire, has been bleeding money as advertisers have fled during the nearly three-year ordeal.

The stock (MSO: up $0.12 to $11.26, Research, Estimates) jumped on the announcement, as investors bet Stewart's move would eventually help her company.

Why now?

At the news conference, company officials said they supported her decision and indicated they expect her to return to the company once she's completed her sentence.

Walter Dellinger, Stewart's main appeals lawyer and a former acting solicitor general under President Clinton, said delays in the appeals process prompted Stewart's decision. On Monday the appellate court granted a request by Stewart's co-defendant, ex-Merrill Lynch stockbroker Peter Bacanovic, for a one-month extension to file his appeal.

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Martha Stewart comments on her decision to serve her five-month prison sentence as soon as possible in order to reclaim her life.

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That delay has "eliminated any possibility that this appeal could be argued this year," Dellinger said at the news conference. Unable to speed up the process, lawyers for Stewart said she decided on her own to serve time now.

Dellinger reiterated Wednesday that he considered her case "very strong."

But he added that "any victory that comes more than a year after the conclusion of her trial simply doesn't work for her. She needs to know now when the period of disruption is going to conclude. Initiating her sentence provides that certainty."

Legal experts, however, were skeptical that court delays drove Stewart's decision. They noted that appeals courts rarely overturn jury verdicts. Even with Stewart's claim that her trial was tainted by juror misconduct and a government witness now accused of lying on the stand, the odds of her winning on appeal appear slim, they said.

Ailing company or no, "you don't go to jail (before you have to) unless you think you're going to end up there," said Jacob Frenkel, a former federal prosecutor and Securities and Exchange Commission lawyer now in private practice in Washington, D.C.

Jacob said it's not unheard of for a convict to drop an appeal, knowing the low success rate. What's unusual, he said, is Stewart's decision to pursue an appeal that might not get decided until after she finishes her prison term.

Stewart's announcement came while magazine publishers negotiate advertising contracts for the coming year. Stewart and other company officials didn't say whether ad sales, which have plummeted at the flagship Martha Stewart Living magazine, factored into Stewart's decision.

Although Stewart expects to be locked up before Halloween, there are a few procedural steps that needs to happen first. Along those lines, Stewart said a letter was delivered Wednesday to Cedarbaum, asking the judge to vacate an earlier order allowing her to stay out of prison pending the outcome of an appeal.

Once that order is removed, the federal Bureau of Prisons must designate a prison. Stewart reiterated her desire to do her time at a women's camp in Danbury, Conn., near her home and that of her mother, who turns 90 Thursday.

But David Chesnoff, a Las Vegas lawyer and longtime friend of Stewart's, said the Danbury Federal Correctional Institution is full. If space does not open up shortly, Chesnoff said Stewart has requested an alternate camp in Coleman, Fla.

An uncertain future at a company "I love"

Stewart, who shed her CEO and chairman posts and now serves as "founding editorial director" at Martha Stewart Living Omnimedia, will not be able to work on company matters while in jail. She will be allowed to work while serving the home detention portion of her sentence, however. Stewart remains the company's controlling shareholder.

One key question left unanswered is whether the Securities and Exchange Commission will allow her to work in an official capacity at Martha Stewart Living Omnimedia. Executives convicted of felonies are often barred for life from serving as an officer or director of public companies.

The regulatory agency recently banned Bacanovic, a licensed broker, from working in the securities industry.

Frenkel, the former prosecutor, said Stewart's bid to return to her company may be one reason why she's pursuing her appeal. If she's vindicated by a higher court, that could bolster her chances.

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Howard Davidowitz, a New York retail consultant and banker, praised Stewart for her decision but said she should have put her legal woes behind her a long time ago. And as long as there's ongoing uncertainty about her future role at the company, advertisers and licensing partners will continue to be nervous.

"The company's only chance to move to a new chapter is to have a roadmap of everything that's going to happen with Martha," said Davidowitz. "The company is set up for her to come back. The question is, what role should she come back in?"

Stewart did not shed any light on that question Wednesday. She quickly left the news conference after reading her statement. In closing, however, she said she hoped to be out of jail in time to plant her spring garden in March.

"I know I have a very tough five months ahead of me," she said. "But I understand that I will get through those months knowing that I have the ability to return to my normal and productive life."  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.