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NEW YORK (CNN/Money) -
Martha Stewart Living Omnimedia has told a judge that limits imposed on its founder's time are hindering a turnaround at the ailing company.
Martha Stewart, the lifestyle expert who is under house arrest until August following her criminal conviction last year, has asked a federal court to spring her early or else relax restrictions limiting the type of work she can do to help rebuild her company.
In a letter sent Monday to U.S. District Court Judge Miriam Goldman Cedarbaum, Martha Stewart Living CEO Susan Lyne says the company needs Stewart's "full energies."
Lyne says the company underestimated the amount of time Stewart would need to spend working on two upcoming television shows and meeting with key advertisers who had fled in the wake of the celebrity's 2003 indictment in a personal stock scandal.
"Instead of having Ms. Stewart five days a week as we expected, we have her services for two or at best three days a week," states Lyne, a former ABC television executive who became Martha Stewart Living's chief late last year.
Stewart, 63, completed in early March a five-month prison sentence following her conviction last year on charges she lied to government investigators about a late 2001 stock sale. Stewart, who maintains she's innocent and has appealed her conviction, is now serving five months under house arrest.
Meanwhile, Stewart's legal woes have caused an advertiser exodus and severely hurt profits at Martha Stewart Living (down $0.82 to $20.85, Research). Stewart decided to go to prison early rather than await the outcome of her appeal, in large part to stop her the downward spiral at her media and merchandising company.
Much to do, little time
While she was behind bars, Martha Stewart Living brokered two major television deals, including a spinoff of "The Apprentice" reality show. According to Lyne, Martha Stewart Living also scheduled five to seven meetings per week with large former advertisers in the hopes of showing them her commitment to revitalizing the company.
Martha Stewart Living plotted its turnaround on the belief that she would be allowed to leave her Bedford, N.Y. estate for up to 48 hours a week for work.
Stewart has since learned, however, that every moment spent outside of her home, including travel time and visits to her doctor and her mother in Connecticut, counts toward the 48-hour limit. As a result, planned trips by Stewart to Kmart stores and the Bernhardt furniture retail outlets, both of which sell Stewart-branded home furnishings, have been cancelled.
And Martha Stewart Living has not been able to send Stewart to personally meet key advertisers that pulled out of the company's flagship Martha Stewart Living and other magazines in the last two years, according to Lyne.
"(T)here is not enough time to fulfill even the basic commitments we've made on Ms. Stewart's behalf," writes Lyne in an unsigned letter to Judge Cedarbaum that Stewart's lawyers released late Monday as part of their bid to free Stewart early.
Lyne's plea comes amid a dustup between Stewart's lawyers and prosecutors over whether the expert homemaker has been punished enough for her role in a well-timed sale of ImClone Systems (Research) stock in late 2001.
The battle erupted last month when an appeals court sent back to Judge Cedarbaum the sentencing portion of Stewart's case, a common practice in the wake of a recent U.S. Supreme Court decision on federal sentencing guidelines. That ruling raised the possibility that criminals around the country could be re-sentenced.
In light of that decision, Stewart's lawyers now argue that Stewart should go free now. Alternatively, they say, Stewart should be allowed to spend 80 hours a week away from home and to travel on business. They also want to remove Stewart's electronic ankle bracelet.
Prosecutors fiercely oppose Stewart's petition on the grounds that her original sentence was both appropriate and lenient.
Judge Cedarbaum is expected to rule as early as next week on Stewart's request for freedom. Meanwhile, a federal appeals court is expected to rule on her appeal in a matter of weeks or months.
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